An ICE investigation into a drug 

money laundering scheme resulted 

in the January 25 seizure of an Arizona 

oil company and 43 oil wells in 

northwest Pennsylvania.

A number of the company’s trusts and

bank accounts in Europe were also seized

as a result of the investigation, which

stemmed from the 1981 drug smuggling 

conviction of Paul Hindelang.

“Like no other case in recent memory, this

investigation demonstrates our perseverance

in tracking down the ill-gotten gains of

international crime lords,” said Jesus Torres,

ICE’s Special Agent-in-Charge for Miami.

In the 1970s, Hindelang headed one of the

country’s biggest marijuana smuggling

enterprises, operating out of Florida. He

pled guilty to importing roughly 250 tons

of marijuana into the United States and

conspiring to import an additional

150,000 pounds.

As part of his 1981 plea agreement,

Hindelang agreed to forfeit $640,000 

to U.S. authorities—a sum that he said

then represented the total of his illegally

earned assets.

However, federal investigators

later learned that Hindelang had

squirreled away millions of dollars of his ill-gotten drug funds

in a veritable maze of offshore

accounts and corporations in

Switzerland, Panama, the Cayman

Islands and numerous other locations. Hindelang admitted in

1997 that he had turned over his

drug fortune to a Costa Rican

accomplice who managed his

funds from a Swiss bank account.

ICE’s investigative efforts to

expose Hindelang’s holding

resulted in the seizure of $50

million from his accounts in

1998. An additional $15 million

in illegal drug proceeds was

seized in 1999.

The seized company, Shaboom Oil Inc.,

headquartered in Phoenix, Arizona,

owned numerous operating wells and 

held the mineral rights to approximately

1,100 acres of land in the Allegheny

National Forest in northwest Pennsylvania.

In addition, ICE seized all ownership 

shares of Shaboom Investments Inc.,

a holding company based in Panama 

that owns the oil company.

The oil company and associated assets seized

in January were valued at $6.5 million—

bringing the total seized from Hindelang’s

illicit investments to more than $70 million.The investigation into Hindelang’s

remaining drug funds continues.

ICE worked with the Monroe County (Fla.)

Sheriff’s Office in the effort to locate and

target Hindelang’s assets. $

• Frequent or unusual use of trust funds in

business transactions or financial activity.

• Financial transactions to countries known 

to be tax havens.

• Frequent use of nominee business owners acting

as representatives in transactions.

Red Flag Indicators

Inside this Issue

Safeguarding America Through

Financial And Trade Investigations

www.ice.gov

Toll-Free Tip Line:

1-866-DHS-2ICE

Cornerstone is U.S. Immigration

and Customs Enforcement’s (ICE)

comprehensive investigative

initiative for fighting financial

crime, trade fraud and

intellectual property crime.

The Cornerstone Report is a

quarterly bulletin highlighting

key issues related to ICE financial

and trade investigations.

Cornerstone Investigations Updates:

Selected Recent Cases . . . . . . . . . . . . . . . 2

Industry Alert: Stopping The Flow 

Of Counterfeit Drugs . . . . . . . . . . . . . . . . . 3

ICE Agents Honored For 

Intellectual Property Protection . . . . . . . . 4

ICE Case Updates: 

Intellectual Property Crime and

Telemarketing Fraud . . . . . . . . . . . . . . . . . 4

Cornerstone Calendar . . . . . . . . . . . . . . . . 5

Volume II: No. 1 • February 2005

Oil Wells Seized In 

ICE Money Laundering Case 

An ICE investigation into drug money laundering led to

the seizure of an oil company and 43 oil wells (similar

to the one pictured above) in January.

3
ICE Investigation Leads To Prison

Sentence For Terror Financier

(Washington, D.C.)—A prominent leader of

American-Islamic political and charitable

organizations was sentenced to 23 years in

prison October for his role in a bizarre

scheme to assassinate a prominent member

of the ruling family of Saudi Arabia.

Abdurahman Alamoudi, a naturalized

American citizen originally born in Eritrea,

pleaded guilty to charges that he had violated U.S. terrorism-related sanctions when he

traveled to and engaged in unlicensed commerce with Libya. In addition, Alamoudi

was charged for his role in helping to

transfer hundreds of thousands of dollars

from Libya to finance the assassination plot

and for making false statements on his naturalization application.

According to court documents, Alamoudi,

the founder of the American Muslim

Council and the American Muslim

Foundation, had made at least 10 illegal

trips to Libya since 1995. In several of

these trips, Alamoudi had met with officials of the Libyan government to discuss a

plot to assassinate Crown Prince Abdullah,

the de facto ruler of Saudi Arabia, by

financing and supporting two Saudi dissidents living in London.

ICE investigators worked with the Internal

Revenue Service, the FBI and other components of the Department of Justice to

investigate Alamoudi’s dealings and to

bring the case to conclusion.

Six Indicted In

Scheme to Steal

Tribal Casino Funds

(San Antonio,Texas)—Six people, including

a Texas state representative and a former tribal leader, were indicted for their alleged roles

in a scheme to steal a total of more than

$900,000 from the Kickapoo Indian Tribe.

The individuals named in the Dec. 9, 2004,

federal indictment face various charges of

conspiracy, theft, money laundering and tax

violations in a scheme to defraud the tribe

of hundreds of thousands of dollars.

The indictment alleges that Isidro Garza, a

tribal gaming representative, used the operating accounts of his tribe’s Lucky Eagle

Casino in Eagle Pass,Texas, for his own

benefit, even using a corporate credit card

to fund approximately $40,000 in expenses

for an unsuccessful political campaign.

Also named in the indictment is Raul Garza,

a former leader of the Kickapoo tribe, who

is alleged to have taken $213,000 in cash

withdrawals from the casino and used the

casino’s credit cards to purchase two all-terrain vehicles, furniture and household appliances for his personal use. Raul Garza is also

alleged to have stolen money from the

Kickapoo Community Health Services, the

tribe’s health care provider.

Isidro Garza’s son Timeo, a member of the

Texas legislature, was also charged in the

indictment, as were other members of the

Garza family and a local attorney.

The investigation was conducted by ICE in

cooperation with the Internal Revenue

Service, the FBI, and the Inspector General’s

office of the Department of Interior.

Page 2 of 5

Volume II: No. 1

February 2005

Cornerstone Investigations Update:

Selected Recent Cases 

• Use of multiple accounts to transfer funds to

same foreign beneficiaries.

• Wire transfers from companies or individuals

located in countries known to be bank or 

tax havens.

• Moving money between business and personal

accounts.

3Red Flag Indicators

ICE Cracks Massive Drug Trafficking,

Money Laundering Scheme (Norfolk,

Va.)—A large-scale ICE investigation of

drug and money laundering in the U.S.

southeast resulted in the dismantling of a

massive drug trafficking organization in

January—with over 30 arrests in Virginia,

Maryland,Texas, Georgia, Kentucky and

other states.

The results of “Operation Blowfish,”

announced January 26, capped a lengthy

investigation into an international trafficking ring that moved marijuana, cocaine,

and crack cocaine from Mexico through

Texas to the southeastern United States.

In addition to the indictments of 36 people for a wide range of offenses including

drug trafficking, money laundering and

firearms violations, agents seized $2.3

million in cash and 16 pieces of property.

The investigation was an interagency

effort that included ICE, the DEA, the IRS

and the Peninsula Narcotics Enforcement

Task Force. $

A major ICE investigation into drug trafficking and money laundering in the southest

United States led to cash seizures of $2.3

million and more than 30 arrests.

$2 Million

Seized
Driving a silver

Porsche 911 and

dining on $1,000 dinners with his girlfriend, Mark Kolowich of San Diego presented himself as a savvy businessman who

had made a fortune selling Viagra and

other prescription drugs over the Internet.

But in reality, he was the organizer of one of

the nation’s largest criminal operations for

trafficking in counterfeit pharmaceuticals.

On January 21, 2005, a federal judge 

in San Diego sentenced Kolowich to serve

51 months in prison and to forfeit substantial cash proceeds associated with his

criminal enterprise.

A total of 16 defendants from California,

Florida, Mexico and the Bahamas were

charged as the result of a cooperative

investigation involving ICE and a number

of other federal and local agencies.

This case illustrates that counterfeit pharmaceuticals have emerged as a big

business—and one which criminal organizations are prepared to exploit for profit.

These sales represent a serious liability for

the pharmaceutical industry and its

investors, as well as to the American people,

who contribute millions of tax dollars each

year to research, develop and test new drugs.

Furthermore, patients also are potential

victims of this dangerous form of counterfeiting crime, since fake drugs don’t adhere

to standards for safety and effectiveness.

The quality and potency of these fake

drugs—often produced in overseas facilities that aren’t regulated by U.S. health and

safety standards—isn’t guaranteed.

The bottom line is that while the U.S.

pharmaceutical supply remains the safest in

the world, the infusion of counterfeit

drugs into the supply line could serve to

compromise consumer safety. Consumers,

health care professionals and business leaders should be aware of the threats posed by

fake drugs.

For more on ICE intellectual property investigations, visit us online at www.ice.gov.

$

Page 3 of 5

Volume II: No. 1

February 2005

Industry Alert: 

Stopping The Flow Of Counterfeit Drugs

I

n previous editions of “The Cornerstone

Report,” we’ve written about ICE’s efforts

to combat telemarketing scams through

investigative efforts like “Project COLT’ and

“Operation Roaming Charge.”

As telemarketing scams have grown increasingly sophisticated in recent years, more vulnerable victims have lost untold millions of

dollars to these financial predators.Worse yet,

even in cases where the scammers are identified and put out of business, it’s often difficult

to recover funds that victims have lost.

However, two recent telemarketing

fraud cases resulted in happy endings

for the victims, thanks to the work of

ICE investigators. In October 2004, ICE

agents returned $8,200 to a man in

Lincoln, Neb., who had lost $8,200 to

telemarketing con artists operating out

of Canada. In a separate case, ICE

recovered and returned $3,800 to an

elderly Chicago man who had fallen prey to a

phony “lottery winnings” scheme.

Frequently, those who have been defrauded

in telemarketing scams don’t report their

losses to the authorities because they’re

ashamed at having been taken. But as these

cases illustrate, reporting the scheme could

be the first step toward identifying the perpetrators, recovering your losses and, ultimately, ensuring that these scammers don’t

exploit other victims. $

Telemarketing Fraud Case Update

ICE Returns Recovered Funds To Telemarketing Scam Victims

J

ose Alvarez-Tostado, the accused financial

manager for one of Mexico’s largest drug

cartels, was arrested in Mexico City in late

January on charges related to organized

crime and money laundering. His criminal

activities made him one of ICE’s top targets.

In 1998, Alvarez-Tostado was indicted in Los

Angeles for his criminal activities. He was

alleged to have collected more than $40 million from drug sales and to have transferred

the funds from the United States to Mexico

on behalf of Amado Carrillo Fuentes, head of

the Juarez drug cartel until his death in 1997.

The 49-year-old Alvarez-Tostado, designated

by President Bush as a “foreign narcotics

kingpin” in 2001, has been one of ICE’s Ten

Most Wanted fugitives for seven years.The

U.S. Attorney’s office in Los Angeles is

expected to request his extradition to the

United States. $

Major Drug Money Launderer

Nabbed In Mexico

U.S. Prosecutors Seek Extradition

• Frequent and unusual use of money orders in

business transactions.

• Commingling of business and personal funds in

bank accounts.

3Red Flag Indicators

Predators

• Frequent unexplained movement of funds between U.S.

and Canadian bank accounts. 

• Use of nominees as bank account owners or signatories.

Victims

• Sudden or unexplained depletion of savings accounts,

especially by elderly account holders. 

• Statements by bank customer indicating possible

victimization by telemarketing scheme.

3 Red Flag Indicators
Visit us on the web at

www.ice.gov/cornerstone

Learn more about money laundering, trade

fraud, intellectual property crime and other

financial crimes.

Find out how you and your industry can

participate in the Cornerstone partnership.

Learn how to spot common “red flag”

indicators of criminal financial activity.

File an online complaint about copyright

infringement, counterfeiting and other

intellectual property violations.

Access more resources related to ICE 

financial and trade investigations.

I

n recent months,

seven ICE agents

have been recognized

for their leadership

and commitment to protecting intellectual

property rights through aggressive investigation of counterfeiting and piracy.

• In January 2005, ICE Special Agent Yong

Chin was awarded the “Intellectual

Property Excellence Award” by the

Pharmaceutical Research and

Manufacturers of American (PhRMA), a

leading industry association. Shin was

honored for his role spearheading investigations in Los Angeles that led to the

seizure of more than 30,000 counterfeit

Viagra tablets, as well as the arrest and

conviction of several key figures associated with counterfeit pharmaceutical trafficking. Shin now represents ICE at the

National Intellectual Property Rights

Center in Washington, D.C.

• In November 2004, six ICE employees

were recognized by the Department of

Justice for their work in “Operation

Buccaneer,” an investigation targeting a

global network of cyberspace gangs

responsible for pirating billions of dollars worth of pirated software over the

Internet. “Operation Buccaneer” was one

of the largest investigations into

Internet-based copyright crime ever conducted, and the first federal investigation

of Internet software piracy to extend

across international borders. ICE’s James

Plitt, Phillip Reed, Michael Godfrey,

Thomas Kim, Dawn Gabel and David

Collins were honored for their roles in

the 15-month-long investigation.

These cases represent only a fraction of the

numerous ICE investigations into intellectual property crime around the world. In

Fiscal Year (FY) 2004, ICE arrested 218

intellectual property rights violators (up

from 132 the previous fiscal year) and

brought 140 indictments (twice the number of FY 2003). In addition, ICE, along

with U.S. Customs and Border Protection,

seized more than $138 million worth of

counterfeit goods in FY 2004. $

Page 4 of 5

Volume II: No. 1

February 2005

From 2001 to 2003, Mohammed KhalilGhali oversaw an organized criminal

ring that moved and sold millions of dollars worth of goods stolen from retail

stores in the Dallas-Fort Worth area. A federal judge closed the book on Ghali’s criminal activities on February 2, when Ghali

was sentenced to 14 years in prison following his April 2004 conviction.

Ghali’s criminal ring orchestrated a major

organized theft operation under which

thieves were paid cash for items shoplifted

or otherwise stolen from convenience stores,

supermarkets and other retail establishments.

The goods included baby formula, pharmaceuticals, cigarettes, health and beauty aids,

nicotine gum and other items. Upon receiving the stolen property, Ghali’s organization

would pay the thieves up to 50 percent of

the average retail price for the items.The

stolen goods were then delivered to warehouses, from which they were shipped and

sold throughout the United States under the

name of “Sunshine Wholesale.”

In addition, during the course of the investigation, it was learned that Ghali had

made inquiries as to how much it would

cost to have the prosecutor and case agent

killed by gang members.

A joint investigation that included ICE, the

Fort Worth Police Department, the IRS, the

Food and Drug Administration and others

led to Ghali’s arrest and conviction on

charges that included theft, money laundering and criminal conspiracy. In addition, six members of his organization pled

guilty, receiving sentences from probation

to 30 months in prison. $

Spotlight On ICE Investigators

ICE Agents Honored For Intellectual Property Protection

ICE Case Update

Ringleader In Organized Retail Theft Scheme Gets Jail Time

ICE Special Agent Yong Chin received the

“Intellectual Property Excellence Award” in

January.

Want To Find Out More 

About ICE And 

Cornerstone

?

▲▲

▲▲

▲▲

▲▲

▲▲
To develop the

Cornerstone partnership between ICE and

the private sector,

Cornerstone is conducting aggressive outreach to industry groups throughout the

United States.

Recent and upcoming events include 

the following:

•Dec. 6, 2004—ICE’s Kevin Delli-Colli,

Deputy Assistant Director for Financial

and Trade Investigations, offered a presentation at the Financial Action Task

Force (FATF) Meeting of Experts on the

Typologies of Money Laundering and

Terrorist Financing in Moscow, Russia.

•Dec. 13–17, 2004—Senior Special

Agents Armando Astorga and Aristedes

Jimenez hosted a seminar on financial

investigations and money laundering 

for South American law enforcement

officials in Lima, Peru, sponsored 

by the Organization of American 

States (OAS).

• February 3–4, 2005—Senior Special

Agent Martin Reyes, ICE Cornerstone

Liaison for San Juan, Puerto Rico, offered

a presentation on ICE financial and trade

investigations at the 2nd Annual Puerto

Rican Symposium of Anti-Money

Laundering, hosted by the Association of

Puerto Rican Bankers.

• Feb. 7–11, 2005—Kevin Delli-Colli 

and Brock Nicholson, Deputy Section

Chief of the Terrorist Financing

Operations Section, represented

DHS/ICE on the U.S. delegation at 

the Financial Action Task Force (FATF)

conference in Paris, France.

• Feb. 9–20, 2005—ICE Commercial and

Fraud Unit Chief F. Gary White and Trade

Transparency Unit Section Chief David

Eoff attended the World Customs

Organization (WCO) meeting in

Brussels, Belgium.They will attempt to

establish a Commercial Fraud Working

Group to address issues that adversely

impact government revenues and security.

• Feb. 10–13, 2005—Cornerstone Section

Chief Joseph Gallion attended the annual

International Association of Financial

Crime Investigators executive board

meeting in Las Vegas, Nev.

• Feb. 24, 2005—Kevin Delli-Colli spoke

at the Investment Company Institute’s

(ICI) Anti-Money Laundering Workshop

in Boston, Mass.

•March 17, 2005—ICE Director of

Investigations Marcy M. Forman will

speak at the Anti-Money Laundering

Compliance Conference hosted by the

Security Industries Association (SIA)

in New York City. $

Page 5 of 5

Volume II: No. 1

February 2005

In Fiscal Year 2004,

ICE’s Cornerstone unit

conducted more than

950 outreach presentations

on financial and trade crime

to more than 11,600

industry representatives.

?

U.S. Immigration and Customs Enforcement (ICE) is the largest investigative arm of the Department of Homeland Security (DHS).

ICE’s mission is to secure the homeland by enforcing immigration and

customs laws and by protecting U.S. commercial aviation and federal

facilities. Cornerstone, ICE’s comprehensive enforcement initiative

focusing on financial and trade fraud investigations, is a key component of that mission.

In addition to financial and money laundering investigations, Cornerstone targets commercial fraud, smuggling and trafficking, export and trade violations and intellectual property

crimes. ICE’s global reach allows the agency to investigate these crimes around the world.

The Secretary of Homeland Security has determined that the publication of this newsletter

is necessary in the transaction of business required by law of U.S. Immigration and

Customs Enforcement (ICE).

The Official Newsletter of Cornerstone

Cornerstone Calendar 

Invitation For Cornerstone

Report Article Submissions

The Cornerstone Report covers a

broad range of topics related to

financial investigations and potential

vulnerabilities in the financial and

trade sectors.

We strive to present clear thinking 

by knowledgeable observers that 

can be read with ease and pleasure

by both professionals and a general

audience, and we’re happy to review

unsolicited submissions for potential

publication in the newsletter.

If you would like to submit an article

for publication or simply find out

more about how you can participate

in the Cornerstone initiative, drop 

us an e-mail at tripwire@dhs.gov.

Did

You

Know