FOR IMMEDIATE RELEASE:

February 26, 2002
         
Kesha Handy                           Patrice Warren
P. O. Box 61129                      Phone 713/567-9334
Houston, TX 77208                   Fax 713/718-3389
Phone: 713/567-9335  
Fax: 713/718-3390
E-Mail: usatty.txs@usdoj.gov

LOCAL BUSINESS MAN SENTENCED TO PRISON FOR EVADING IRS REGULATIONS
Kenneth Magidson, Assistant United States Attorney
Phone: 713/567-9546

(HOUSTON) Michael T. Shelby, United States Attorney for the Southern District of Texas, announced today that Diego Velasco, 44, a Houston resident, and owner of Bonito Services, Inc.,was sentenced today by the Honorable Judge Nancy F. Atlas to 30 months in federal prison without parole for arranging the deposits of currency, totaling more than $800,000, in eleven (11) Houston area bank accounts in a manner designed to avoid federal treasury reporting regulations. The currency was proceeds of the drug trafficking of others.

Under federal treasury regulations all persons are required to provide accurate and true information in order for the financial institution to file a report with the Internal Revenue Service of each currency transaction involving more than $10,000. This report is called a "Currency Transaction Report."

Velasco pled guilty on October 4, 2001, to conspiring with others to knowingly conduct financial transactions with domestic banks with the intent to evade reporting requirements (Count 58). Evidence presented at the time of his plea and outlined in the indictment established that between November, 1996 and April, 1997, in multiple transactions, Velasco arranged for the monies to be deposited in separate transactions at various bank accounts in Houston, Texas. Each deposit was less than $10,000, although thousands of dollars in U. S. currency would be deposit each day. Velasco earned a broker's fee of 3 to 5 % for each transaction. The monies were ultimately wire transferred from the Houston accounts to various other accounts in the United States, from which others arranged the ultimate transfer for the benefit of Colombian drug traffickers.

Velasco's prison term is to be followed by a 3 year term of supervised release. Velasco was further ordered to pay a $5,000 fine.

The Internal Revenue Service-Criminal Investigations, the Texas Attorney General's Office-Special Crimes Unit, the Harris County District Attorney's Office, and the Houston Police Department were involved in the investigation. Assistant United States Attorney Kenneth Magidson prosecuted the case.

020226-velasco