ZA-09-0007/YAZ1K MARTINETTI, JULIO et al/ OPERATION HEART OF

C O N F I D E N T I A L SECTION 01 OF 03 BUENOS AIRES 000005 NOFORN SIPDIS DEA HQS FOR OG/HARRIGAN, OE/GADDIS, OT/SHROYER, OGL/KOLEN, FRANCO, HOLLMAN, DESANTIS, REICHNER, NC/PLACIDO, NCX/SMITH, NCD/BERTINI, NN/POOLE, NCT/CASTO, NCTS/KROKE, SWANSON, NCI/BORDER, NCIL/TRAVERS, NCW/HOOPER, NCWP/KINNISON, NNC/NEAL, NNCP/MENOSA, NE/DOTY, NEX/ORTEGA, OSL/MUKAI HQ PLEASE PASS TO SOD ATTN: CNTOC/ ASAC HAMLET, SC MASIELLO, SC KELLY, DEA LIMA/SOUTHERN CONE REGION FOR RD STENKAMP, ARD LAMAGNO, FIM WALSH, ASUNCION FOR CA GONZALEZ, GS BANKS, SA BLAKE, NEW YORK FOR GS IM, SA GREENE, SA O???SHEA, SA SHEEHAN, DEA ROANOKE RO FOR RAC CARDEN DEA BRISTOL VA POD FOR SA BREWER E.O. 12958: DECL: 25X1- HUMAN TAGS: STAG DEA SUBJECT: ZA-09-0007/YAZ1K MARTINETTI, JULIO et al/ OPERATION HEART OF STONE CASE COORDINATION MEETING CLASSIFIED BY: Douglas W. Poole, Deputy Chief of Intelligence, Drug Enforcement Administration, Office of National Security Intelligence; REASON: 1.4(B),(D) ZG-08-0001/YAZ1B, HORACIO CARTES C1-07-Z032/QNZ1Q, BANCO AMAMBAY OPERATION HIGHWIRE (SEO-592) GFAN-07-9430/SEO-569 OPERATION CERBERUS GFAN-04-8002/SEO-593 OPERATION KNIGHT MOVES ¶1. (SBU/NF) Reference is made to a classified cable, written under ZA-09-0007/YAZ1K; MARTINETTI, Julio et al/Operation Heart of Stone on October 27, 2009 by Drug Enforcement Administration (DEA) Special Agent (SA) Russell Baer titled: OPERATIONAL DEVELOPMENT OF BANCO AMAMBAY MONEY LAUNDERING INVESTIGATION AND CASE COORDINATION WITH ATF BRISTOL, VA. This referenced cable explains the recent relationship between DEA and the Bureau of Alcohol, Tobacco and Firearms (ATF) and the planned integration of Operation Heart of Stone with the ATF, Bristol VA office's investigation into illicit tobacco sales from Paraguay to the United States. ¶2. (SBU/NF) OPERATION HEART OF STONE is a coordinated, transnational investigation focused on the disruption and dismantlement of a significant drug trafficking and money laundering enterprise operating within the Tri Border Area (TBA) of Argentina, Paraguay, and Brazil, and elsewhere throughout the world. This investigation has established links between and among drug trafficking, money laundering and other criminal organizations and, as such, was approved as a designated Consolidated Priority Organizational Target (CPOT) investigation during April 2009. This investigation, targeting specific TBA financial institutions, their executives, and related money laundering facilitators is being worked jointly by the Asuncion CO, the Buenos Aires Country Office (BACO),the New York FD Organized Crime Drug Enforcement Strike-Force/ Financial Investigations Team (NYOCDESF/FIT),HQ/FO (OPERATION HIGHWIRE-SEO 592),Immigration and Customs Enforcement, the Internal Revenue Service and SOD/CNTOC, and is being supported by the United States Attorneys Office for the Eastern District of New York, the DOJ Asset Forfeiture Money Laundering Section, the Federal Reserve Bank, and the United States Treasury Office of Foreign Assets Control (OFAC). ¶3. (C) The investigative team has implemented strategies and operations aimed at attacking the financial infrastructure of drug trafficking supply networks (DTO's) and other criminal enterprises operating within the TBA. Using a strategic approach to target the international command and control centers of these criminal organizations based in the TBA, agents have successfully focused investigative activity in an effort to develop this investigation with an aim toward a DEA UC introduction to CPOT designee Horacio CARTES. Through the utilization of a DEA BACO cooperating source and other DEA undercover personnel, agents have infiltrated CARTES' money laundering enterprise, an organization believed to launder large quantities of United States currency generated through illegal means, including through the sale of narcotics, from the TBA to the United States. ¶4. (SBU/NF) This cable will summarize a recent effort to develop this investigation as it relates to CPOT designee CARTES and members of his inner circle. The Southern Cone Region (Asuncion and Buenos Aires Country Offices) will continue to work jointly with all other interested offices to aggressively develop this investigation. ¶5. (C) From December 6, 2009 to December 9, 2009, ATF Bristol, VA hosted an information exchange/coordination meeting at the Rainforest Resort, Panama City, Panama in an attempt to share information between the above listed agencies and businesses and coordinate a future plan of attack amongst all members involved. ¶6. (C) The following individuals were present: Tom Lesnak (ATF Bristol VA),Bruce Lambert, RAC (ATF Bristol VA),Dan Whittemore (ATF Bristol, VA),Joe Fox (ATF HQ),Eric Flagg (ATF Winchester VA),Brian Damiani (ATF Winchester VA),Mike Schneider, RAC (ATF Winchester VA),Darnell Blake (DEA Asuncion),Charles Banks, GS (DEA Asuncion),Jarrod Sumner (DEA Buenos Aires),Dirk Lamagno, ARD (DEA Lima),Michael O'Shea (DEA NY),Don Im, GS (DEA NY),Orville Greene (DEA NY),Robert Capers (USAO, EDNY),Andrea Goldbarg (USAO, EDNY),Monica Morales (Treasury-OFAC NY),Ewan Duncan (British American Tobacco),Terry Hobbs (British American Tobacco),Richard Pandohie (British American Tobacco),Russell See (RAI-Reynolds), Derek Ogden (Imperial Tobacco),Dave Zimmerman (Altria-Formerly Phillip Morris USA),Mike Grogan (Altria-Formerly Phillip Morris USA.) ¶7. (C) During the meetings, three approaches were decided upon. First, agents involved in the investigation are going to talk to William Cloherty, a Washington area lobbyist who is a director of Tobaccos USA, INC. It is believed that Cloherty will have a historical perspective of tobacco operations between Paraguay and the United States and, more directly, information regarding tobacco production and sales and the movement of money obtained from the businesses of CARTES. Second, it has been decided to introduce a second undercover (UC) agent to CARTES and/or his lieutenants, Osvaldo Gane SALUM and Juan Carlos Lopez Moriera in Paraguay. In order to accomplish this task, UC documents need to be obtained. This will be accomplished over the next few weeks by members involved in the investigation. Third, many basic investigative techniques such as interviews, debriefings, records checks and possible UC meets will be used in an attempt to successfully disrupt and dismantle the CARTES DTO. ¶8. (SBU/NF) The Southern Cone Region would like to extend its appreciation to ATF Bristol, Virginia for providing the opportunity and venue to conduct these meetings. ¶9. (U) Pursuant to section 6242.11 of the DEA agent's manual, this teletype is in lieu of a DEA-6, report of investigation. ¶10. (SBU/NF) Inquiries may be directed to Buenos Aires Country AttachC) John Cohen or SA Jarrod Sumner at (301) 985-9361. Indexing Section: ¶1. TABACOS USA, INC.- NADDIS 6926970 & 6967177 SARI: Please consolidate these records; LKA: 3815 Bethman Road, Easton, PA 18045; formerly located at 1155 Mid Valley Dr, Olyphant, PA; REMARKS: Cigarette wholesale business associated with Horacio CARTES; Directors include: Horacio CARTES, Sarah CARTES, and William Cloherty ¶2. CARTES, Horacio- NADDIS 2749184 REMARKS: CPOT designee and head of TBA money laundering organization ¶3. SALUM, Osvaldo Gane- NADDIS negative Paraguayan male, DOB 07/04/1974; REMARKS: Direct associate of Horacio CARTES and member of criminal organization involved in importation of counterfeit cigarettes into the CONUS from South America ¶4. MOREIRA, Juan Carlos Lopez- NADDIS 6926973 Paraguayan male, a/k/a Juanca, DOB: 12/27/1968; LKA: Concepcion Leyes de Chaves and Calle 4, Parque Industrial Alberto Barrail e Hijos,, Asuncion, Paraguay (595-21224411),cellular (595-981424072),email jlopezzm@palermo.com.py; REMARKS: Direct associate of Horacio CARTES and member of criminal organization involved in importation of counterfeit cigarettes into the CONUS from South America; President of Habacorp, S.R.L. ¶5. CLOHERTY, William Martin- NADDIS 6967114 Associated address: 1155 Mid-Valley Drive, Olyphant, Pennsylvania 18447 T/N (570) 487-1117, fax (570) 487-1137, direct (301) 320-1775, car phone (202) 309-6683, cellular phone (202) 294-8993; email wmcloherty@verizon.net; REMARKS: Director and lobbyist of TABACOS USA, INC (see #1); associate of Horacio Cartes (see #2) MARTINEZ