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South America

IN THE LATE 20th century and into the early 21st century, organized and white-collar crime became a major issue South America. Much of this criminal activity has revolved around the illegal drug trade and associated money laundering. There have also been concerns that international terrorists will be able to take advantage of the continent's financial systems to launder money. In response to these problems, in 2002 the Inter-American Development Bank approved $1.2 billion to fight money laundering in eight South American countries. Carried out through the Organization of American States, the countries apply the funds to create or strengthen financial intelligence units that will track suspicious transactions of suspected money launders.

Bolivia

Most organized crime in Bolivia is related to the cocoa growing industry. Since the 1960s, Bolivian governments have pledged to eradicate cocoa crops. Despite such promises, cocoa cultivation has expanded and transnational criminal organizations have played a growing role in the country. Often family-based, these organizations have established links to the police, the armed forces, politicians, and international criminal networks. International attention to organized crime related to the drug trade has concentrated on Colombia, allowing Bolivian groups to expand and take a more active role than is often assumed.

Organized crime associated with cocoa and cocaine production in Bolivia dates back to 1940. There was an increase in international criminal activity in the country during the 1950s due to improved communications capabilities, particularly air traffic in and out of Bolivia, which in turn allowed Cuban drug traffickers to import cocoa paste from Bolivia. This criminal activity grew even more during the military governments from 1964 to 1982, as international demand for cocaine grew and Bolivians made connections with Colombian drug cartels.

The Santa Ana cartel, sometimes known simply as La Corporación (The Corporation), dominated organized crime in Bolivia starting in the 1970s. Led by wealthy cattle rancher Roberto Suarez Gómez, the Santa Ana cartel got its start by supplying cocoa paste to Colombian drug traffickers. By the late 1970s, the cartel was monopolizing the production and commercialization of cocaine in Bolivia. Soon, the organization became independent of the Colombians, shipping cocaine to the United States through Mexico and bringing back millions of dollars to launder. La Corporación was also increasingly involved in politics and the armed forces, and was apparently behind the 1980 military coup that brought General Luis García Meza to power. The Santa Ana cartel also has been linked to former Nazi Klaus Barbie, who arrived in Bolivia in the 1950s and was involved in many illicit activities.

Venezuela

During the 1980s, oil revenue in petroleum-rich Venezuela declined sharply. The economy became increasingly affected by the drug trade and money-laundering because Colombian cartels, the Sicilian Mafia, and Venezuelan politicians and bankers all sought to profit. Large amounts of the cocaine shipped to the United States and Europe passed through Venezuela, and those involved earned perhaps $2 billion in narcotics profits.

Much of the illicit activity came to light during the administration of Carlos Andrés Pérez (1989–1993). Pérez appointed Thor Halvorssen as his antidrug czar. Halvorssen also became the special overseas investigator for the Venezuelan Senate's Anti-money Laundering Commission. He began investigating Banco Latino, Venezuela's second largest bank. Halvorssen soon discovered that the president and his mistress had put away $19 million in secret accounts, which led to the impeachment of Pérez in May 1993. Later that year, clear evidence of money-laundering schemes in Venezuelan banks came to light, especially those involving Banco Latino. Banco Latino and numerous other Venezuelan banks had shifted many of their assets to offshore facilities to avoid the country's currency controls. In turn, Colombian drug traffickers used the Venezuelan banking system and its offshore subsidiaries to launder their earnings. Banco Latino and other banks collapsed, Pérez was indicted in the money-laundering operations, and more than 300 bankers and businessmen were arrested, while others fled the country.

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