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Financial Freedom

An Interview With the Agent Who Infiltrated Escobar’s Cartel

A Note From the Managing Editor: We’re doing something a little different with today’s issue…

About a year ago, Marc had the opportunity to interview Robert Mazur for his weekly Oxford Club Radio show. In case you don’t know, Robert is a former U.S. federal agent who helped bring down one of the largest money laundering operations in history.

His story inspired the new movie The Infiltrator starring Bryan Cranston (in theaters now).

Marc’s interview with Robert was so fascinating that we wanted to share it with Investment U readers. You can listen to the audio (interview starts approximately 1/3 of the way in) and check out the full transcript below.

If you’d like to be notified when each new episode of Oxford Club Radio is released, head over to OxfordClubRadio.com and subscribe.


Marc Lichtenfeld: Very, very pleased to welcome to the show Robert Mazur. He’s a former DEA undercover agent and the author of the book The Infiltrator: My Secret Life Inside the Dirty Banks Behind Pablo Escobar’s Medellín Cartel.

Robert, thanks so much for joining us. And, by the way, congratulations that they’re turning your book into a movie next year. I understand Bryan Cranston is playing you.

Robert Mazur: Yeah, that’s true. We actually shot the movie in April and May of this year in London for a couple of months and then in Florida for a few weeks. It’s now in the editing process and the music is being developed. We should actually see something at the American Film Festival. It’s going to be shown for the first time this November, but it will actually come out in the second quarter of 2016. It’s pretty exciting.

ML: Yeah, very exciting. Congratulations. And it’s too bad you couldn’t get a halfway decent actor to play the leading role.

RM: [Laughs] Well, I was pretty impressed with Benjamin Bratt, too. He plays the lead bad guy in the movie, and John Leguizamo plays Bryan Cranston’s – or my – partner. And there’s a number of other actors who are internationally known.

ML: So, let’s talk about the book. If I understand it correctly, you were really involved in the money laundering aspect of the business. Can you very briefly explain how money laundering works for people who may not be familiar with or don’t know the details?

RM: Yeah. Well, to put it simply, it’s a process by which moneys from an illicit source are transformed to appear as though they come from a legitimate source. And generally speaking, that’s done through transnational transactions and transporter transactions.

In this particular case, I had a leg up and some help from what was then the seventh-largest privately held bank in the world. I became a conduit between the Medellín Cartel, my clients – who were the biggest drug dealers in the world – and the seventh-largest bank in the world, the Bank of Credit and Commerce International with an insatiable appetite for underground deposits.

And so the inner circle of the bank that I was put with… we’re talking about a bank with a presence in 72 countries and nearly 19,000 employees in more than 500 branches. So it’s not a little bank by any means.

And I was dealing with people, some of whom were on the board of the bank. So this was an institutional plan and they used just about every trick you can think of in the book to launder money. And not just for drug traffickers – but for terrorists, for illegal arms dealers, for people pilfering Treasurys, for people who wanted to evade income taxes, those who wanted to bust sanctions and deal with nations that were various countries we’re prohibited from dealing with due to the sanctions.

So they really provided a very large menu of money laundering techniques for people who possessed money like that, which really is money seeking secrecy from governments.

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ML: And I assume the banks knew exactly what they were doing, correct?

RM: Precisely. Over a period of about two years, my partner and I recorded roughly 1,200 conversations between the drug traffickers and the dirty bankers. And those recordings were the cornerstone of the prosecution of senior management of the bank as well as the bank itself, and, ultimately, the bank collapsed and no longer exists.

It’s a little bit different from the way our dirty banks seem to be dealt with today. Right now, it’s kind of a “hands off Wall Street’s biggest” and those banks that have admitted to criminal offenses in the last five or six years and… they’re doing very similar things to what BCCI did.

ML: How prevalent do you think this is today? Have banks started policing themselves a little more carefully or are they just as greedy and dirty as they used to be? 

RM: They’re just as greedy and dirty as they used to be. There’s roughly $400 billion a year generated from the sale of illegal drugs every year. But when you add to that the money seeking secrecy from other sources that I mentioned earlier…

Studies have been done by bodies such as the United Nations on drugs and crime that suggest that that figure rises to about $2 trillion a year of money seeking secrecy from governments… $2 trillion can get a lot of good people to do a lot of bad things and, unfortunately, we have circumstances similar to what I was dealing with.

The most recent one I can think of was roughly two years ago with HSBC,The Hongkong and Shanghai Bank Corporation. Which sounds like a faraway bank, but it had more than 400 branches in the United States and considers itself to be the world’s bank.

In this particular case, it admitted to a criminal offense in connection with its movement of at least – and this is a small end of the spectrum – at least $881 million of drug proceeds moved on behalf of the Sinderella Cartel in Mexico and the Norte del Valle Cartel, which is based in Colombia.

So, unfortunately, it’s business as usual. And frankly, in my view, I’m waiting until we go back to the approach that we had at one time of causing people to be personally responsible for their acts and not allowing a deep-pocket employee to pay a fine and then enable the person who committed the crime to never see a jail. If we continue that, it will never stop. If we do go back to the idea that bankers who commit crimes should be treated like anybody else and will go to prison for extended periods of time, maybe we have a chance.

But we really need to recognize that this is a multilayered problem. There’s just as much of a problem and a need on the demand side for education and treatment as there is for attacking the supply side. We have to continue to attack the supply side because these cartels have become transnational criminal organizations that specialize not just in drugs, but in corruption. And they undermine democracies.

Unfortunately, we’ve got to fight the fight to cut the heads of the snakes off and try to destabilize their leadership – otherwise they will become so heavily entrenched in nations, there’ll be no justice.

You don’t have to think too hard as to how bad it could get. Some estimates are that as many as 100,000 or more Mexicans have been killed since 2006 when their then-President Calderón claimed the beginning of their war on drugs.

Of those 100,000, plus another roughly 20,000 that have just gone missing since that period of time, are a lot of people who tried to fight the cartels. A lot of honest cops and a lot of honest military, a lot of honest judges and prosecutors who stood up and wound up being killed. We see it in our headlines all the time.

In September of 2014 we saw the kidnapping of 43 students who were trying to demonstrate about a lack of government funds being provided to the poor. And they wound up in Iguala, Mexico. After appealing to the military for help because they knew they were in danger, they were turned over to the cartel. All 43 were shot, thrown into a bonfire for about a day, and then their ashes and bones were spread into a river.

That type of thing is unfortunately a far-too-frequent occurrence in Mexico and in other neighboring nations.

And anybody who thinks it was an accident that El Chapo Guzmán, the head of the Sinderella Cartel, was able to have a one-mile tunnel drilled from the prison where he was located that enabled him to escape… If they think that was not done in concert with some people within the government to help him, then they’re awfully naïve.

ML: Unfortunately, we’re up against the clock, but fascinating stuff. Thank you for joining us. I can’t wait to read the book and then see the movie next year. And maybe when the movie comes out we’ll have you back.

RM: I’d love to. Thank you.

ML: Thanks so much. That’s Robert Mazur, author of The Infiltrator: My Secret Life Inside the Dirty Banks Behind Pablo Escobar’s Medellín Cartel. You can get more information at robertmazur.com.


About

A master of the steady, reliable science of income investing, Marc’s commentary has appeared in The Wall Street Journal, Barron’s and U.S. News & World Report. He has also appeared on CNBC, Fox Business and Yahoo Finance. His book Get Rich With Dividends: A Proven System for Double-Digit Returns achieved best-seller status shortly after its release in 2012. He captures the hearts and minds of readers approaching their golden years in his daily e-letter, Wealthy Retirement.

 

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