Buried loot a mystery for authorities

Discussion in 'General Discussion' started by Quigley_Sharps, Jul 28, 2008.

  1. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    WASHINGTON - The businessman arrived at the Treasury Department carrying a suitcase stuffed with about $5.2 million. The bills were decomposing, nearly unrecognizable, and he asked to swap them for a cashier's check. He said the money came from Mexico.

    Money like this normally arrives in an armored truck or insured shipping container after a bank burns or a vault floods. It doesn't just show up at the visitor's entrance on a Tuesday morning. But the banking habits of Franz Felhaber had stopped making sense to the government long ago.

    For the past few years, authorities say, he and his family have popped in and out of U.S. banks, looking to change about $20 million in buried treasure for clean cash.

    The money is always the same — decaying $100 bills from the 1970s and 1980s.

    It's the story that keeps changing:

    _It was an inheritance.

    _Somebody dug up a tree and there it was.

    _It was found in a suitcase buried in an alfalfa field.

    _A relative found a treasure map.

    No matter where it came from or who found it, that buried treasure stands to make someone rich.

    It could also send someone to jail.


    Felhaber is a customs broker, a middleman.

    His company, F.C. Felhaber & Co., is just minutes away from the bridge between El Paso, Texas, and Ciudad Juarez, Mexico. Tens of billions of dollars of Mexican goods cross that bridge each year, aided by people such as Felhaber who navigate the customs bureaucracy.

    Customs brokers don't own the stuff that comes into the United States. They just make sure it gets here.

    So it is with the $20 million. Felhaber says the money is not his. A Mexican relative, Francisco Javier Ramos Saenz-Pardo, merely sought help exchanging money that had been buried for decades, Felhaber says.

    "To be very clear on this matter: In the beginning, I was not told what it was," Felhaber said in one of several telephone interviews with The Associated Press.

    Money petrifies after sitting underground that long and Felhaber said it looked like a brick of adobe. The Treasury will exchange even badly damaged money, but Felhaber said Saenz-Pardo did not want to handle the process himself.

    "Imagine a Mexican family bringing money that is damaged and the government calling it a drug deal," Felhaber said.

    If the goal were to avoid unwarranted attention, he went about it all wrong. Rather than making a simple — albeit large — exchange at the Treasury, Felhaber allegedly began trying to exchange smaller amounts at El Paso-area banks, raising suspicion every time.

    The first stop was the Federal Reserve Bank in El Paso, where authorities say Felhaber appeared with an uncle, Jose, and an aunt, Esther. In her purse, Esther carried $120,000. She told bank officials there were millions more, discovered while digging to expand a building in Juarez, according to U.S. court records filed by U.S. Immigration and Customs Enforcement.

    Banks normally refer such requests to the Bureau of Engraving and Printing, an arm of the Treasury. But employees worried that with so much cash, the three might be robbed on their way home. So, the bank accepted the money and wired $120,000 to an account in his uncle's name, Jose Carrillo-Valles, according to a government affidavit.

    Felhaber was back at it again weeks later, this time at a Bank of America branch. Customs officials say he unsuccessfully tried to persuade a bank vice president to dispatch an armored truck to the Mexican border to pick up millions of dollars.

    Felhaber denies that conversation took place. But he is tough to pin down on details. At times he seems specific on a point ("There is a $20 million inheritance,") only to contradict himself minutes later, saying the amount is "nowhere near that" and he has no idea where the money came from.

    Soon after the Bank of America visit, a man bearing a striking resemblance to Felhaber walked into a Bank of the West branch. This time, however, authorities say the customer identified himself as Ken Motley and said he discovered millions while excavating a tree in Chihuahua, Mexico.

    Bank employees refused to exchange any money, despite two follow-up phone calls — once with a Spanish accent, once without — to try to set up an exchange.

    The mysterious Ken Motley also appeared at the First National Bank, telling employees that a friend had discovered $20 million buried in an alfalfa field, investigators say.

    Felhaber says he is not Ken Motley.

    Customs investigators say a Bank of the West employee identified Felhaber's picture as that of Ken Motley.

    "That's an absolute lie," Felhaber said. "That would be a horrendous miscarriage of justice."

    It's unclear which transaction caught investigators' attention. Most of the tens of thousands of exchanges of mutilated money each year are routine. Natural disasters create a lot of inquiries. Children of the Depression have kept money out of banks, only to see it eaten by rodents in their attics or destroyed in fires. A surprising number of people accidentally shred greeting cards with money inside.

    But authorities say there are warning signs that trigger investigations. Making a series of small exchanges is one. Bringing mutilated money from abroad is another.

    "That is one of the things we are extra concerned about: This process being used to launder money from illegal activities," said Leonard R. Olijar, the chief financial officer of the Bureau of Engraving and Printing. "That's one of our factors that we use to make a case suspicious."

    Immigration and Customs Enforcement agents questioned Felhaber in October 2005. According to a government summary of that interview, Felhaber said he believed the money was the result of a 1970s Mexican land deal. The money was buried in a coffin, he said, until Saenz-Pardo — the relative who brought him the money in the first place — discovered a map leading him to the buried treasure.

    Felhaber said he didn't want to do anything illegal and was merely getting a cut of whatever he exchanged.

    He now says he was mistaken in his interviews with investigators.

    "I told them, 'I suspect this is where it's from but I didn't know,'" he said. "They take you to your word like you're supposed to remember every single thing every single time."


    Maybe it was the visit from investigators or maybe someone realized the bank visits weren't working, but Felhaber apparently changed strategies.

    In January 2006, the Bureau of Engraving and Printing received a package containing about $136,000 from Jose Carrillo-Valles, Felhaber's uncle. Felhaber's business was listed as the return address. The letter explained the money had been stored in a basement for 22 years.

    Though customs officials were suspicious by then, there was no clear evidence of a crime, just a lot of unanswered questions. So, two months later, the Treasury mailed a check, which was deposited into Carrillo-Valles' account.

    Following the money, investigators interviewed Carrillo-Valles and his wife. Each denied ever sending or receiving the money, according to a government affidavit.

    As for the $120,000 wired to Jose's account from the Federal Reserve a year earlier, they allegedly said it was an inheritance. Esther said Jose's mother had recently died.

    Authorities don't believe the inheritance story. For starters, they say Jose's mother was still alive when the $120,000 was exchanged. They also traced a wire transfer from Jose's account to someone named Saenz-Pardo shortly after it was deposited.

    Customs investigators now believed Carrillo-Valles was acting as an intermediary, taking a cut of the money and sending the rest to Saenz-Pardo or someone else in Mexico.

    Twice, reporters called Carrillo-Valles on his cell phone to ask about the arrangement and confirm his discussions with investigators. First, he said he did not speak English. When a Spanish-speaking reporter called back, he said he could not hear her, and hung up.

    In April 2007, the case moved from being suspicious to becoming a criminal investigation. Immigration and Customs Enforcement officials called the Justice Department, saying Felhaber had just arrived in person at the Bureau of Engraving and Printing with about $1.2 million.

    It's not illegal to find money. Depending on where it's found, there might be a bureaucratic process to follow or taxes to be paid, but the discovery itself is not a crime.

    There are strict rules, however, about bringing money into the United States. Import documents identified the $1.2 million as belonging to Jose Carrillo-Valles. Based on their investigation so far, authorities believe that was a lie — a violation that carries up to five years in prison.

    But Washington federal prosecutor William Cowden decided to wait. Maybe Felhaber would return with even more.

    It paid off. This April, Felhaber was back at the Treasury, this time with a suitcase containing $5.2 million. Investigators say they have found no import documents filed for this deal, a violation of cash smuggling laws that also carries up to five years in prison.

    Prosecutors moved in. Felhaber's two Treasury visits gave them probable cause to seize the money — both the $1.2 million and the $5.2 million.

    They told a federal magistrate in June that they suspected it was all drug money that had been buried or hidden inside a wall for decades.

    "Given that the money is coming north from Mexico, that both conflicting and cockamamie stories have been told about its origins, and that all the stories of how it got to be found are fantastical, I strongly suspect that the Felhaber currency is the proceeds of illegal bulk narcotics sales," ICE investigator Stephen A. Schneider told the magistrate.


    Felhaber says he's still not sure what all the fuss is about. At times he says he has no idea where the money came from, but he is always certain it has nothing to do with drugs.

    None of the documents filed in federal court accuses Felhaber or his relatives of being involved in drugs. They leave open the possibility that somebody merely came across a cache of drug money, forgotten or abandoned in the Mexican desert.

    In the coming weeks, the Justice Department plans to seek forfeiture of the seized $6.4 million. That means Felhaber and his family will have the opportunity to come to Washington to ask for their money back.

    If they do, they'll have to explain where it came from. And they'll have to sort through some of the inconsistent stories for a federal judge. Felhaber bristles at the suggestion there have been inconsistencies.

    "The story has never changed," he said. "I don't know how it's changed."

    Reached by telephone Monday, he said he was aware of the looming forefeiture action but could not discuss whether his family planned to challenge it. But he said "the truth will come out" about the money eventually.

    Cowden, the federal prosecutor, said he doesn't know what to expect.

    "Some of these cases, nobody ever comes forward," he said.

    If so, the buried treasure will become government property.

    Or at least some of it. Perhaps there is another $14 million out there, muddy and waiting to be exchanged.

    Does Felhaber know if there's any money left?

    On that, it's hard to get a straight answer.

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