by Bill Singer
The Bernie Madoff of Colombia Pleads Guilty to Money Laundering. Built Pre-Paid Debit Card Empire at DMG Group.
November 24, 2010
The so-called "Bernie Madoff of Colombia", David Eduardo Helmut Murcia Guzman pled guilty before U.S. District Court Judge William H. Pauley III on November 23, 2010, to conspiring to launder millions of dollars worth of narcotics proceeds through Colombian marketing giant D.M.G. Group
The DMG Organization: the Pre-Paid Debit Card Empire
Guzman created DMG in 2003 as a vehicle for a multi-level marketing scheme, through which customers could buy pre-paid debit cards. DMG sold these pre-paid debit cards to customers in Latin America, who could use them to purchase electronics and other items at retail stores operated by DMG.
By 2008, DMG's customers numbered approximately 400,000. However, by January 2009, DMG ceased operation.
The Money Laundering Conspiracy
Guzman and five co-defendants -- employees and affiliates of DMG -- laundered narcotics proceeds through DMG and DMG's affiliated companies. They used the Colombian Black Market Peso Exchange, an informal value transfer system commonly used to launder illicitly-obtained dollars in the United States, in exchange for pesos taken in for "legitimate" purchases in Colombia.
For example, in the fall of 2007,Guzman and co-defendant Margarita Leonor Pabon Castro approached another individual in Colombia and said that they had cash - apparently in U.S. dollars -- that they could not deposit into the Colombian banking system. Guzman and Castro asked the individual to set up an account in the United States where these funds could be deposited.
The Merrill Lynch "Blackstone Account"
Thereafter, the individual opened an account at Merrill Lynch in the United States, under the name "Blackstone International Development" (the "Blackstone Account"). Neither Guzman nor Castro were listed as owners of the Blackstone Account.
In March 2008,Guzman and Castro told the same individual that they had provided $2.2 million worth of Colombian Pesos to co-defendant German Enrique Serrano-Reyes in Colombia, and, in exchange, Serrano-Reyes had caused the nearly $2.2 million to be wired into the Blackstone Account through eighteen separate wire transfers.
May 2008 US Seizure
In May 2008, the U.S. Government seized about $2.2 million from the Blackstone Account pursuant to a court order. When Guzman was informed of the seizure of the Blackstone Account, Guzman told the individual who set up the account that he should not attempt to retrieve the contents of the account, and should not under any circumstances inform the authorities of Guzman's or Castro's interest in the Blackstone Account.
Co-defendant William Suárez-Suárez headed DMG's Colombian operations, including the attempted bribery of Colombian officials. In addition, Suárez-Suárez assisted Guzman and others in establishing hundreds of subsidiary and affiliated companies linked to DMG in countries including Colombia, Panama, and the United States.
Guzman and three co-defendants affiliated with DMG coordinated the pick-up and transportation of millions of dollars in narcotics proceeds in Mexico. The defendants concealed narcotics proceeds by investing them in legitimate real estate and limited liability companies in the United States.
Guzman pled guilty to conspiracy to launder the proceeds of narcotics trafficking, which carries a maximum sentence of twenty years in prison. He is scheduled for sentencing on February 2, 2011.
Suárez-Suárez, Pabon Castro, Serrano-Reyes, Luis Fernando Cediel Rozo, and Santiago Baranchuk‑Rueda have eachpreviously pled guilty to the same charge.
Read about the March 17, 2009 unsealed Indictment at http://www.justice.gov/usao/nys/pressreleases/March09/murciaguzmanetaldmgindictmentpr.pdf
Read about the October 23, 2009 DEA arrests: http://www.justice.gov/dea/pubs/states/newsrel/2009/nyc102309.html