Ajoint investigation by U.S.

Immigration and Customs

Enforcement (ICE) and the Drug

Enforcement Administration (DEA)

into drug trafficking at the Southwest border revealed a multimillion dollar money laundering

organization, utilizing multiple

companies, and numerous bank

accounts, to launder narcotic proceeds.This case study demonstrates

methodologies used for laundering

criminal proceeds.

In 2004, ICE agents in Brownsville,

Texas, received information that

Oscar Oropeza, along with his wife

Tina, daughter Paulina and son

Juan, were using various businesses

they owned to launder proceeds

derived from narcotic sales.The

Oropeza family owned substantial

assets in both Brownsville and 

Harlingen,Texas, including a car

wash, landscaping business, trucking company, a large house, and

numerous vehicles valued between

$60,000–$120,000 each.

One of the first developments linking the Oropeza family to narcotics

occurred in April 2004. Juan Hernandez and other defendants were

arrested by local police in Harlingen,Texas, after they were linked to

a narcotic smuggling operation utilizing truck lines to ship marijuana

out of the Rio Grande Valley, to

Florida. As a result of this arrest,

Hernandez received more than

three years in a state penitentiary.

DEA agents in West Palm Beach,

Florida, learned of Hernandez's

arrest and asked ICE for additional

information about his drug operation.This information linked Milton

Oquendo to the narcotic smuggling

in Florida. DEA subsequently

arrested and charged him in Florida

for his role in the organization.

Hernandez and Oquendo were each

sentenced to ten years as a result of

this indictment.The money laundering activities being conducted by

the Oropeza family were directly

linked to Hernandez and Oquendo.

In July 2006, investigators caught a

break in the case when Tina

Oropeza was stopped and questioned by Harlingen police officers

while riding on a north-bound 

bus headed out of the city. Officer's

discovered she was carrying approximately $90,000 in cash, which

they seized.

Subsequent financial records checks

showed that the Oropeza family 

had more than 20 accounts with

several banks. Personal bank

accounts connected to the money

laundering activity were held by all

four Oropeza's. Account statements

from these personal accounts

reflected cash deposits continued

A Study in Money Laundering

The Oropeza Family and Drug Smuggling at the Southwest Border

stoneReport

TheCorner

Inside This Issue

Safeguarding America through

Financial Investigations

www.ice.gov/cornerstone

Toll-Free Tip Line:

1-866-DHS-2-ICE

Cornerstone is U.S. Immigration 

and Customs Enforcement’s (ICE)

comprehensive investigative initiative

for fighting financial crime.

The Cornerstone Report is a quarterly

bulletin highlighting key issues

related to ICE financial, narcotics and

public safety investigations.

Financial Fraud 

and Cross-Border 

Crimes . . . . . . . . . . . . . . . . . 3

2nd Annual 

European Serious 

Organised Crime 

Conference . . . . . . . . . . . . . 4

Volume VI: No. 3 • Summer 2009 U.S. currency discovered in safe deposit box

and seized by ICE.
well in excess of 

$1 million in just

over two years. Of

these cash deposits,

the vast majority

consisted of cash

deposits of less than $10,000, and

often involved multiple cash

deposits on the same date.

Statements for the multiple business

accounts reflected cash deposits

well in excess of $2 million in just

over two years.The business

accounts had over $3.6 million in

deposits for 2006 alone. A large

portion of the cash deposits also

consisted of amounts less than

$10,000, and often involved multiple cash deposits on the same date.

These numerous cash deposits were

conducted by all four Oropeza family members.

Prior to opening an investigation,

ICE learned that Oscar Oropeza 

paid for a building connected to 

his landscaping business with two

cash payments.The first payment

was $221,000, and the second was

for approximately $120,000, both

of which consisted of primarily 

$20 bills.

The case saw another critical development on May 31, 2007, when

Oscar and Tina Oropeza were

stopped for traffic violations by

local police in Mobile, Alabama.

Oscar Oropeza gave verbal consent

to search their van, which revealed

a hidden compartment in the floor

area.The officers discovered four

aluminum containers concealed

within the compartment containing

84 packages wrapped in plastic

wrap and duct tape.The packages

contained a white powdery substance that field tested positive for

cocaine; Oscar and Tina Oropeza

were arrested on state charges for

transporting cocaine.

In May and June 2007, ICE agents

served search warrants on seven

properties owned by the Oropeza

family in Brownsville,Texas.The

search warrants resulted in the

seizure of several vehicles, luxury

jewelry items, and currency. ICE

agents also served seizure warrants

on 13 bank accounts and three

safety deposit boxes connected to

the Oropeza family, resulting in the

seizure of more than $310,000.

The amount of currency, funds,

property, and vehicles seized by ICE

agents in Brownsville totaled more

than $2.1 million. Five real properties valued in excess of $1 million

were also forfeited.

In March 2008,Tina Oropeza pled

guilty to federal charges related to

narcotics smuggling and to money

laundering conspiracy. Paulina

Oropeza pled guilty to federal

charges because of her knowledge

of the money laundering activities.

In November 2009,Tina Oropeza

was sentenced to 10 months prison,

five years probation, and a $25,000

fine. Paulina Oropeza was sentenced

to five months in prison, five years

probation, and a $5,000 fine.

Oscar Oropeza was sentenced to

180 months in the federal penitentiary for conspiracy to possess more

that 1,000 kilograms of marijuana,

and 180 months for conspiracy to

posses more that five kilograms of

cocaine. Oropeza was also sentenced to 180 months for conspiracy to possess with intent to

distribute approximately ninety

kilograms of cocaine. All of the sentences are to run concurrently for a

total of 180 months. Oropeza was

also ordered to serve five years of

supervised release and to be

deported to Mexico. $

Oropeza Family et al., Investigation, continued

stoneReport

TheCorner

Page 2 of 4

Volume VI: No. 3

Summer 2009

• Various reported occupations (attorney, owner 

of Green Wealth Group, financial analyst, etc.)

by the same individual on BSA filings.

• The acquisition or purchase of high-value ticket

items (real estate) with cash.

• Large number of business and personal

accounts at different financial institutions.

• Numerous structured cash deposits into both

personal and business bank accounts.

• Deposits made in different bank branches 

on the same day, and deposited into the 

same account.

Red Flag Indicators

Vehicles seized by ICE that were purchased

with illicit proceeds from narcotics smuggling.

Seized luxury jewelry discovered during execution of search warrants.
I

n 2006, the ICE

Special Agent in

Charge Office in

Buffalo, N.Y., initiated an investigation into Integrated

Check Technologies Inc. (ICT), a

payment processor linked to a previous financial fraud investigation

involving telemarketing activities.

The investigation revealed ICT had

knowledge that the telemarketers

for whom they provided payment

processing services had been committing fraud and were involved in

a complex money laundering

scheme exploiting the U.S. financial

system through telemarketing.

ICE learned the state of Ohio's

Attorney General's Office had an

on-going civil investigation of ICT

for processing payments for fraudulent telemarketing companies, and

other states were pursuing or had

pursued action against the company.

A review of 57 telemarketing companies that ICT processed payments

for revealed that each had a high

return rate for unauthorized debit

transactions, and the majority of

those companies had complaints

filed against them for fraud.

The international telemarketing

fraud ring included Thomas J. Cimicato from Columbus, Ohio. Cimicato was the president, secretary,

treasurer, director and primary

shareholder of Check Free Recovery,

Inc. d/b/a ICT.This financial fraud

scheme involved the use of U.S.

bank accounts to launder millions

of dollars in fraudulently obtained

wire transfers and was designed to

extract money from victims' bank

accounts on false pretenses or without authorization.

Individuals located in

Canada and the United

States, opened U.S.

bank accounts in order

to debit unsuspecting

U.S. bank account

holders' checking

accounts by either

Automated Clearing

House (ACH) transactions or by depositing

fraudulent draft checks

through demand drafts.

ICT, in business since

1998, began processing payments for telemarketing companies in March

2005. A review of the bank records

indicated that the deposits by ICT

substantially increased after ICT

began processing payments for telemarketing companies.

Between March 2005, and January

2006, ICT deposits totaled more

than $54.3 million.The bank where

the deposits were made contacted a

number of the account holders who

were listed on the draft checks and

inquired whether the debits on the

draft checks were authorized. All

the account holders who were contacted informed bank representatives that they did not authorize the

withdrawals and the majority of the

account holders who were contacted were elderly, living on limited incomes. In addition, some of

the account holders were debited

more than once, via draft checks,

without their authorization by ICT

and by other payment processors.

Through a variety of fees for services rendered, ICT retained approximately $19.9 million of the $54.3

million total.

Using victims' bank account information, ICT printed (or caused to

be printed) demand drafts, drawn

from victims' accounts. ICT

deposited the demand drafts into

their bank account, causing debits

to victims' bank accounts, and corresponding credits to ICT's bank

account. Based upon a review of

multiple telemarketing companies

that ICT processed transactions for,

ICE learned that more than half of

the transactions processed were

reversed or returned due to various

reasons, including insufficient

funds, account closed, stopped payments and unauthorized/fraudulent

transactions. ICT willfully ignored

countless complaints lodged against

ICT and/or its clients by victims of

telemarketing fraud.

ICT generated fees from this type of

activity by generally charging a

business the following recurring

fees: a monthly minimum charge

per account, a monthly administrative fee, a debit item origination

fee, a credit item origination fee, a

return fee for all items that did not

clear, charge back fees, continued

Financial Fraud and Cross-Border Crimes

Automated Clearing House Transactions

stoneReport

TheCorner

Page 3 of 4

Volume VI: No. 3

Summer 2009

An ICE investigation into questionable practices at a payment processing company uncovered a multimillion dollar

telemarketing scheme.
an item upfront

decline fee, a 

reversal file created

fee, a reversal file

item origination

fee, wire fees, and

other fees, including a discount 

rate based on underwriting criteria

and a risk management fee for 

settlement reserve.

The fraudulent telemarketing

schemes, included unsolicited telephone calls, commonly known as

"cold calls", made by foreign and

domestic telemarketers to vulnerable consumers residing throughout

the United States. During the cold

calls, victims were induced, through

misrepresentations and false promises of goods and services of value,

to provide the telemarketer with

personal bank account information.

The telemarketer then transmitted

the personal bank account information, using the United States mail

and/or wires, to ICT.

Fraudulent telemarketers and their

accomplices often trade in lists of

prospective victims, including

repeat victims who are likely to

become a victim of another fraudulent scheme.These telemarketers

also have been known to use these

lists in order to debit victims' financial accounts without ever contacting the individual or offering a

service or product.This is commonly known as "slamming a list"

or "running a database".

ICE was able to obtain seizure warrants for monies in two third party

payment companies' bank accounts,

resulting in the seizure of eight U.S.

bank accounts totaling approximately $3.1 million dollars, more

than $2 million of which was from

ICT. Only after Cimicato was contacted by law enforcement and consumer protection agencies did he

take action against some of the telemarketing companies his company

had processed payments for.To date,

numerous State Attorney Generals

have filed civil actions against various companies previously identified

by ICE to impede these businesses

from doing business within their

respective jurisdictions. $

Financial Fraud and Cross-Border Crimes, continued

stoneReport

TheCorner

Page 4 of 4

Volume VI: No. 3

Summer 2009

• The bank of initial deposit for draft checks

shows many draft checks deposited followed by

wire transfers out of the account to both foreign

and domestic bank accounts, with a large

number of the transactions returned as

unauthorized or fraudulent.

• Accounts set up to receive wire transfers from

the payment processor have many wires for large

amounts of money that are deposited and

subsequently wired out in a relatively short

period of time.

• Wire transfer of funds to commercial accounts

with no logical relationship or connection to the

sender of the funds.

• Third-party service providers have a history of

violating Automated Clearing House (ACH)

network rules, generating illegal transactions, or

processing manipulated or fraudulent

transactions on behalf of their customers.

• ACH transactions for larger amounts of 

money often originate from non-bank customers

for which the bank has no or insufficient 

due diligence. 

Red Flag Indicators

I

n March 2009, Deputy

Assistant Director Janice

Ayala, of the ICE Financial,

Narcotics and Public Safety

Division, delivered the

international keynote

address at the 2nd Annual

European Serious Organised Crime Conference,

sponsored by the Merseyside Police and Merseyside

Police Authority in the

United Kingdom.

The conference focused in

part on the link between

terrorism and organised

crime and looked at harm

reduction measures. Additionally, the conference

also showcased major successes in the fight against

organized crime and

encouraged the facilitation

of partnerships between

police forces, border control services, immigration

enforcement agencies and

other key stakeholders.

Unit Chief David Eoff

from the Asset Forfeiture

Section at ICE headquarters, also participated in a

group panel discussion

about the use of forensic

accountants during asset

forfeiture investigations. $

Second Annual European Serious Organised Crime Conference