Former Governor Of Mexican State Pleads Guilty In Manhattan Federal Court To Money Laundering Charge In Connection With Narcotics Bribes
FOR IMMEDIATE RELEASE
Thursday August 2, 2012
Defendant Conspired to Launder Approximately $19 Million in Bribe Payments Through U.S. and Foreign Bank Accounts
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MARIO ERNESTO VILLANUEVA MADRID, the former governor of the Mexican state of Quintana Roo, pled guilty today to conspiring to launder millions of dollars in narcotics bribe payments that he received from the Juarez Cartel – one of Mexico’s most notorious and violent cocaine cartels – through accounts at banks in the U.S. and other countries. VILLANUEVA MADRID, 64, was extradited from Mexico in May of 2010. He pled guilty before U.S. District Judge Victor Marrero.
Manhattan U.S. Attorney Preet Bharara said: “Almost immediately after being elected Governor, Mario Ernesto Villanueva Madrid made a deal with the devil – agreeing to turn a blind eye while multi-ton quantities of cocaine were moved through his state on their journey to the U.S. Instead of serving the people who elected him, he focused on accumulating riches, while allowing a violent drug cartel to operate with impunity. With his guilty plea today and the forfeiture of his criminal proceeds, justice has been served and one more corrupt public official has been held to answer.”
According to Indictments previously returned in this case, and statements made during court proceedings:
In the mid-to late-1990s, the Juarez Cartel transported over 200 tons of cocaine into the United States across the Southwest U.S. border. In 1994, the Cartel established operations in the eastern Mexican state of Quintana Roo, where the resort city of Cancun is located.
VILLANUEVA MADRID was elected Governor of Quintana Roo in April 1993. In 1994, he entered into an agreement with the Juarez Cartel that would ensure its cocaine shipments traveled safely through Quintana Roo without interference from law enforcement. Under the agreement, VILLANUEVA MADRID received payments of between $400,000 and $500,000 for each shipment of cocaine that the Cartel transported through his state.
From 1994 through 1999, the Juarez Cartel paid VILLANUEVA MADRID millions of dollars in narcotics proceeds. By late 1995, in an effort to hide the illicit funds, VILLANUEVA MADRID began transferring the money to bank and brokerage accounts in the United States, Switzerland, the Bahamas, Panama and Mexico. Many of the accounts were held in the names of British Virgin Islands shell corporations. In March 1999, after his term as Governor expired, and while he was under investigation by Mexican authorities, VILLANUEVA MADRID fled. He remained a fugitive for over two years.
In connection with his flight, VILLANUEVA MADRID liquidated the millions of dollars in narcotics proceeds he had deposited in a U.S. bank account he held at Lehman Brothers Inc. (“Lehman”), through a series of wire transfers totaling over $11 million. These transfers were made through an account at the Mexican bank, Banamex, that had been secretly opened for VILLANUEVA MADRID in the name of “Lehman Brothers Private Client Services.” A large portion of the illicit proceeds – over $7 million – were then deposited into an account at Lehman that a banker had opened in the names of a non-existent Mexican family.
In May 2001, VILLANUEVA MADRID was arrested and subsequently convicted in Mexico on organized crime and corruption offenses. All of VILLANUEVA MADRID’s illicit funds at Lehman and in other U.S. accounts, totaling over $19 million, were seized and later forfeited by U.S. authorities.
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VILLANUEVA MADRID faces a maximum sentence of 20 years in prison. He is scheduled to be sentenced by Judge Marrero on October 26, 2012 at 2:30 p.m.
Mr. Bharara praised the extraordinary investigative efforts of the Drug Enforcement Administration’s (DEA) New York Organized Crime Drug Enforcement Strike Force – which is comprised of agents and officers of the DEA, the New York City Police Department, the United States Internal Revenue Service Criminal Investigation Division, the Department of Homeland Security United States Immigration and Customs Enforcement, the Federal Bureau of Investigation, and the New York State Police – as well as the DEA’s Mexico City Country Office and Merida, Mexico, Resident Office, which together led the investigation. He also recognized the DEA’s Offices in Houston and Pittsburgh, as well as the United States Attorney’s Office in Houston, and the Mexican PGR, for their invaluable assistance in the investigation. Additionally, Mr. Bharara thanked the United States Marshals Service and the Department of Justice’s Office of International Affairs for their assistance in this matter.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Glen Kopp, Jason Smith, and Anna Skotko are in charge of the prosecution.