After the mega-bank HSBC was caught laundering $881 million in narco-cash, the Sinaloa cartel began funneling a big chunk of its profits through a cash-for-gold-for-cash scheme whose alleged ringleaders include a fretful fellow with the alias “Walt Disney.”
Also known more familiarly as Don Walt, Carlos Parra-Pedroza and 31 others are said to have laundered more than $101 million in cartel bucks, in what the U.S. Attorney in Chicago terms a money-laundering organization (MLO).
And, unlike HSBC, Don Walt and his codefendants are most definitely not considered too big to jail.
Where HSBC got off with a fine, the MLO members face up to 20 years for laundering one-eighth the amount.
And, to compound the inequity, the cartel itself treats bankers far more gingerly than it does the likes of Don Walt.
The cartel is not known to have caused anybody in HSBC to fear being murdered or maimed even as the bank caused the drug lords to lose millions.
But just the prospect in being a day late in a transaction or causing the cartel to lose a paltry few thousand dollars caused Don Walt to quake.
“And if I tell them we always pay them on Tuesday [but] it’s not going to be until Wednesday, they’ll truly kill me,” Don Walt was recorded telling a confidential informant.
Don Walt complained that cartel kings who lack even a grammar-school education had difficulty understanding complications that arose in the MOL’s generally simple scheme: Drug proceeds were used to purchase 24K scrap gold and gold jewelry, which was Fed Ex-ed to a refinery where it was melted down. The refinery then paid the prevailing price per ounce to the supposed suppliers in Mexico.
“The bad thing is that these guys don’t even know the word ‘school,’ only know how to shoot,” Don Walt said on the recording.
He explained that the cartel was liable to hold you responsible if law enforcement seized the cash—even if the dough had not yet come into your possession and you were in no way to blame.
“The reason why I’m scared is because then they’re going to cut our balls off without it being our fault,” Don Walt said. “They’re good at beating everyone up…And they’re good at saying, ‘It was you.’”
The cartel has a telling vernacular for coming under investigation by law enforcement, a twist on the title of a popular TV series.
And an MLO boss such as Don Walt could not blame his underlings if the truth proved to be other than it was presented.
“You lie to me, I relay the lies and I’m the one who gets it,” Don Walt said.
A drug lord sent the MLO a BBM saying, “Stop fucking around. I made the deal with you and I’m holding you accountable.”
Don Walt spoke of one unfortunate courier who had been convinced by the cartel to accept full responsibility for what he could not possibly have prevented.
“I think they even cut his fingers off,” Don Walt reported. “Even I would’ve agreed.” At last report, nobody at HSBC was missing any digits.
And HSBC was able to operate so brazenly that its bankers were spared such hassles as having to memorize codes for their transactions, as did the members of the MLO. Don Walt emailed one code key to the confidential informant.
0=62 1= 83 2=71 3=49 4=57 5=66 6=35 7=21 8=18 9=96 Make an appointment = let’s go to the beach Appointment was made = it’s warm I am on my way = the beers are cold I am on my way back = I’m with my wife I am verifying = I have diarrhea Ticket is complete (money all there) = Mercedes Is missing/short = Hamburger It’s fucked up = I like your sister They are following me and I have money with me = Let’s go to the movie theater Monday = Red Tuesday = Yellow Wednesday = Green Thursday = White Friday = Blue Saturday = Black Sunday = Purple
On August 21, 2014, Don Walt employed the code in a message to the confidential informant: “The red one [Monday] will start with two orders…One of 66 62 62 [$500,000] and the other one of 96 62 62 [$900,000]…Let’s see if we can work all the colors [handle drug cash every day]…Go to the beach [make an appointment] the whole week.”
The confidential informant responded: “Okay.”
Prior to a cash delivery, the MLO required the intended recipient to take a random dollar bill from his pocket and read off the unique serial number. The bill served to confirm his identity when the courier arrived. The courier would then retain the bill as a receipt.
An alleged courier named Alma Lorena Ortiz De Rosa Vera apparently hoped that a more official receipt would save her after police pulled her over and found her with a bag full of cash. “Ortiz stated that the money was not hers and she did not want it,” court papers say. “Ortiz agreed to abandon the money. When agents asked her if her abandonment of the money would create a safety concern for her upon her return to Mexico, Ortiz stated that approximately $59,452 was not a significant amount of money and all she would need was a receipt showing that law enforcement had seized money.”
Another worry that HSBC does not share with the MLO is a dire shortage of craftspeople who are both able and willing to build hidden traps in vehicles where drug cash can be stored in transit.
“No one wants to do that,” an MLO member was recorded lamenting. “It’s not easy. But, damn, they’re so necessary.”
The charges against Don Walt and the 31 others are summarized in a 331-page criminal complaint, which is 301 pages longer than the statement of facts filed against HSBC for laundering eight times the amount of drug cash as well as violating sanctions against such outlaw countries as Iran and North Korea.
The bank’s washing of all that blood-soaked cartel-cash somehow did not shock people as much as recent revelations that HSBC abetted tax evasion, in truth a minor transgression in comparison. The bankers of HSBC got not an instant in jail for the much bigger crime.
Had it been offered, Don Walt would almost certainly have accepted an HSBC-style deferred prosecution agreement that carried only a fine.
He and his codefendants were instead arraigned on an indictment in Chicago federal court. He pled not guilty and could spend 20 years behind bars because he is not too big to jail.