how buttery it is, how chocolaty, how, how...'
'And all the while,” laughed John, “they're drinking the cheapest crap in the world, only they can't tell the difference.'
'And obviously,” said Nelson, “neither could
And off they went again. This was certainly a new Nelson. It was the first time since they'd been children that they'd laughed together this way, and it felt good. Good God, if it kept up, he was liable to wind up actually liking the guy.
'Do you know what?” Nelson said when they quieted down. “You haven't called me Nel in thirty years. No one has.'
John couldn't think of anything to say. “Yeah, well.” This was followed by a somewhat awkward pause.
'In any event,” said Nelson, “the reason I wanted to talk to you was to ask if this has the earmarks of something... something illegal. I don't mean on the part of Java Green Mountain and Calvo Hermanos, I mean on our part—that is, on the part of... of someone at Paradise.'
'Yeah, it does,” John said. “It sounds like money-laundering.'
Nelson winced. “That's what I was afraid you'd say.” He began to reach for the ballpoint pen again but at a guttural rumble from John he pulled his hand back and laid it in his lap. “But look, I'm not clear on what this money- laundering business is about. I thought I was, but I'm not. It has to do with drugs, doesn't it?'
'Usually, yeah.'
'But where would drugs enter into this? We pay ten times as much as we should for green beans and we sell the finished product for ten times what it's worth. The growers do very well indeed, the consumers pay through the nose, and we make an innocent, modest profit. It's hardly a model of keen business practice, but where do drugs come into it? Where does money-laundering come into it?'
'It's pretty complicated, Nelson. I'd rather—'
'I think I can manage to hang in there,” Nelson said. Definitely a new Nelson.
All right, then, John said. The Colombian drug cartels had a long-established system of working with their American dealers. The American dealers—importers, they were called in the trade—didn't pay for the dope up front, they maintained open “accounts” with their Colombian sources and settled only after the stuff had been sold on the streets.
'Sound business practice,” said Nelson with something close to approval. “Receipts first, then payments. It's a question of cash flow. Any sensible businessman would prefer to handle it that way.'
But these “businessmen” had a problem unique to international drug-trafficking, John explained. Most of the money that was collected was in great armloads of small-and medium-denomination bills—truckloads, really, amounting to many millions of dollars. The question was: How did you get it out of the country and into Colombia? And the problem was that you couldn't carry more than $10,000 out of the United States unless you declared it with Customs, something these guys were not eager to do. And you couldn't put all that cash in a bank checking account and draw a check on it either, because banks had to report deposits of $10,000 or more.
One way of getting around this involved smurfing, which—
'Ah...smurfing?” Nelson said.
Smurfing, said John. Multiple bank transactions of seven, or eight, or nine thousand dollars—anything under ten. A van holding maybe fifteen runners shows up in the financial district of a big city in the morning just as the banks open. The runners pile out, head for the banks, and buy cashier's checks (which can be made out to any name you want, and which usually don't require identification). Then they run off to the next bank with another load of cash, and the next, and the next. A single runner can convert $150,000 in a day. And the following day they're in another city doing it all over again.
'But why is it called smurfing?” Nelson wanted to know.
'Because of the way they all scoot off from the delivery van like a bunch of little Smurfs. You know.'
Nelson didn't know. “In any case, I fail to see what this has to do with us,” he said irritably.
Patience, John counseled. Once the cash was smurfed into checks it would be “layered,” that is, electronically transferred from Account A in Bank I to Account B in Bank 2, splitting it up and recombining it until its origins were lost somewhere in cyberspace. Once you had a dozen banks and twenty accounts involved, the money was virtually untraceable. At that point, it could safely find its way into the accounts of an international importer such as Paradise Coffee.
And from there it was an easy matter to move it out of the country in the form of inflated payments for purchased goods. You paid $10 for $1 worth of goods and sold the finished product for ten times what it was worth. You made out, the books balanced—and $9 had been laundered and was on its way back to Colombia. It was done in the gem trade, it was done in the metals trade...and, so it seemed, it was done in the coffee trade.
'Are you telling me,” Nelson asked slowly, “that in the past five years, we've been responsible for supplying thirty million dollars to...to drug lords in Colombia?'
'I'm ready to bet on it,” John said. “That Colombian coffee grower, Calvo Hermanos they wouldn't happen to be in Medellin, would they?'
Nelson's face was all the answer that was needed.
'And the other one, the one in Java, they're probably backed by some of the Colombian drug biggies. It's an old story, Nelson.'
'It's horrible,” Nelson said. He looked grim, almost sick.
John understood what he meant. “For money, probably. The dealers typically pay legit firms ten percent for this kind of service. So somebody here was collecting...oh, around...'
'Six hundred thousand dollars a year,” Nelson said.
