$7M in smuggling fees seized - East Valley Tribune: News

$7M in smuggling fees seized

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Posted: Sunday, March 27, 2005 5:57 am | Updated: 9:50 am, Fri Oct 7, 2011.

Seven times every second, someone sends money through Western Union, and hidden among that flow are the riches of coyotes, who charge about $1,600 a head to smuggle illegal immigrants across the Mexican border.

Authorities intercepted at least $7 million intended for such smugglers in the Valley in the past two years — a fraction of the estimated $320 million wired here annually to pay for the illegal services. When it comes to getting paid, many coyotes, or people smugglers, prefer Western Union because of the security it provides, authorities say.

The seizures have reduced crime and violence associated with people smuggling and reduced the level of coyote activity in the Valley, said Andrea Esquer, spokeswoman for Arizona Attorney General Terry Goddard.

But despite those successes, authorities remain low-key about the undercover money-seizing operations. Goddard and other officials in his office would not talk about the operations, saying doing so "could result in the deaths and other criminal abuses of individuals that the operation is designed to protect."

Most documents from the money-seizing operations are sealed by the court, but civil forfeiture documents and seizure warrants reviewed by the Tribune provide a glimpse into the large-scale money laundering operation of human smuggling, tactics smugglers use to avoid detection and tactics for stopping the flow of money.

And while law enforcement officials are mum about the operations, immigrant advocates and immigration and civil forfeiture lawyers warn that money of innocent people has been seized despite steps the attorney general’s office has taken to prevent that from happening.

MONEY PICKUPS

When Roberto Navarez-Vega was arrested Oct. 10, he gave an account of one man’s take in the smuggling racket, according to a seizure warrant affidavit written by Larry Flick, an agent for the Arizona Attorney General’s Office.

Vega was paid $150 for each Western Union money pickup he made, and he had made about 100 in 2004.

During his interrogation, Vega’s cell phone kept ringing and the caller kept inquiring about money sent to pay for people smuggling, Flick wrote.

The caller reportedly said, "We have a big load, where do you want to put these people?"

Agents then arrested Rodolfo Raul Acedo, a suspected coyote, and three illegal immigrants who were waiting for Vega in Phoenix to pick them up so they could get money from Western Union. Neither Acedo nor Vega have been charged with any crime, but their vehicles and money were seized.

Immigrants often prefer to use Western Union instead of conventional banking because of its anonymity, speed and convenience, said Saskia Rietbroek, executive director of Miami, Fla.-based Association of Certified Anti-Money Laundering Specialists.

"Sometimes when people are illegal aliens they prefer not to open a bank account because then the bank will ask for certain identification," said Rietbroek, whose organization certifies professionals who work in the anti-moneylaundering field.

And, according to Flick, smuggling operations use the sheer volume of Western Union transactions to hide themselves.

Western Union, which has 220,000 locations worldwide and can be found in grocery stores, convenience stores, post offices and check-cashing stores, sends money transfers seven times a second every second of the year, according to a 2004 fourth-quarter report of its parent company, First Data Corp.

SEIZING THE MONEY

Since the passage of the Bank Secrecy Act in 1970, the government has gone after the money-laundering operations of organized crime and drug cartels, and now terrorists, Rietbroek said.

Arizona is considered a human-smuggling hub, so a task force of Immigration and Customs Enforcement agents, or ICE, local police, the Arizona Attorney General’s Office and the State Banking Department has gone after the money of the trade.

"When one considers, from the long-term historical perspective, the numbers that have been smuggled through Phoenix, it’s easy to see why the financial incentive is so powerful," said Russell Ahr, Phoenix spokesman for ICE.

Investigators used civil forfeiture laws to siphon off some of the $320 million a year that law enforcement officials estimate is laundered through Western Union to Phoenixarea people smugglers. The $7 million seized since April 2003 came from thousands of money transfers targeted during four month-long undercover operations.

The operations begin with investigators serving Western Union with subpoenas asking for data of senders and receivers with transactions of $750 or more. The nationwide average Western Union wire amount is approximately $300, but the average smuggling fee is $1,600, Flick wrote.

Western Union turns over the transaction data to investigators who then ask for court approval to seize the money. Court documents do not cite any other criteria than dollar amount as a reason for seizing money.

Court documents include lists of thousands of names of people whose money has been seized, mostly in amounts ranging from $800 to $2,000. Investigators believe that many of the names are aliases for those in a small group of coyotes who receive the money in Phoenix.

These people pick up the money from Western Union and get it to their associates in southern Arizona or Mexico, documents state.

An April 2003 seizure warrant listed 142 names of people who received thousands of dollars in dozens of wire transfers in 2002, some of them collecting as much as from $400,000 to $883,000.

Assistant attorney general Cameron Holmes wrote that some of the "pickup" people work "in concert with agents of the money transmitter, Western Union."

Investigations in 2001 put two men out of business who owned check-cashing stores in Phoenix and Mesa that had Western Union affiliates, according to court documents.

In those cases, employees of the stores and even one of the owners, transferred money they knew was dirty or took bribes from undercover agents to either not file required reports on high dollar transactions or falsified them, according to documents.

Western Union did not return messages seeking comment, but Rietbroek said Western Union has cleaned up its act since New York fined it $8 million in 2003 for lax antimoney-laundering controls.

"Everybody’s watching them very, very closely," Rietbroek said.

TAKING PRECAUTIONS

Once money is seized, law enforcement officials take measures to make sure anyone who isn’t involved in illegal dealings gets his or her money back.

The attorney general set up a phone room staffed 24 hours a day, seven days a week with Spanish-speaking detectives who would determine whether people whose money was seized should get it back.

Sometimes an innocent person might have the same name as a targeted person and would get the money back immediately. Other people who got their money back would have to take extra steps to prove their identities.

According to court documents, people often hung up upon being questioned, and some even admitted the money was for coyotes.

The state also had a detective whose job it was to make sure that each person named received formal notice their money was being seized.

Many people used different addresses for each transaction and most attempts at service through certified mail were returned because the addresses didn’t exist or the named person didn’t live at the address.

Despite intentions to return money to innocent people caught in the operation, some people say that it happens anyway.

INNOCENT VICTIMS?

Elias Bermudez, director of Centro de Ayuda, an immigrant advocacy organization in Phoenix, said he’s taken about four people to see agents to get their money back, but they lost it anyway.

"They grill them like they’re criminals," Bermudez said. "We’re turning like Mexico."

Monika Sud-Devaraj, an immigration attorney, said she has had several consultations from people who claimed their money was wrongfully seized, but they couldn’t pay for her services.

And there is Marco A. Contreras, a 48-year-old legal assistant for an immigration attorney, who said a few Western Union wires of money to him from families of jailed illegal immigrants, including one for $8,000 a few years ago, were seized.

Contreras said the money was for bail for the immigrants and for his legal services, and since he didn’t get the money, he couldn’t help the clients.

The wired money also prompted an investigator to question Contreras and his boss, attorney Christopher Stender, but he departed after presumably being satisfied with their explanation.

Of the thousands of people named in forfeiture cases reviewed by the Tribune, only Sandra Sousa of Tucson had a lawyer attempt to get her money back.

The state seized the $950 she borrowed from a friend to send to Mexico for her sick mother-in-law, but all it took was to fax the attorney general a copy of loan paperwork to have the money released, attorney Dan Montgomery said.

Montgomery said he helped Sousa as a favor to a friend, and she probably wouldn’t have been able to afford his services.

Defense attorney Marty Lieberman, who has represented clients in civil forfeitures for 20 years, said a person whose few thousand dollars was wrongfully seized probably would take the loss because civil forfeiture laws are complicated and it is not cost effective to hire a lawyer.

The money that is seized goes into the state’s Anti-Racketeering Revolving Fund and later divvied up among agencies that were part of the investigation in which the seizure took place.

Smuggling transactions

Money used to smuggle illegals into the United States is usually sent via electronic transfers to coyotes, or people smugglers.

Estimated annual $320 Phoenix amount wired area coyotes to million

in Western Arizona Union as of branches Jan. 2004 1,500

substantial Weekly take coyote for a $40,000

smuggling Average fee from for Mexico $1,600

Average fee for smuggling from $6,400 south of Mexico

SOURCES: Arizona Attorney General; Bureau of Immigration and Customs Enforcement; Maricopa County Superior Court records

TRIBUNE

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