R Is for Ricochet

earnings. For the past five years, he's been 'rehabilitating' funds for a man named Salustio Castillo, a Los Angeles jewelry wholesaler who also deals in scrap silver and gold. The business is just a cover for what he really does, which is to import cocaine from South America. Castillo bought a large property in Montebello through Mr. Beckwith's real estate firm. Mr. Beckwith brokered the deal, which is how they became acquainted. Mr. Castillo needed someone of Mr. Beckwith's professional reputation. His company is diverse and his financial dealings of sufficient magnitude to camouflage the funds Castillo was so eager to place. Mr. Beckwith saw the possibilities and agreed to help.
    "At first, he employed the standard laundering techniques – structuring transactions, consolidating the deposits, and using wire transfers to move the money out of the country. By the time the money was routed through his company books and back to Castillo, the sources appeared to be legitimate. After six months, Mr. Beckwith got tired of paying his smurfs or maybe he got tired of keeping track of the myriad accounts he'd opened across Santa Teresa County. He began to make big deposits – two and three hundred thousand dollars at a clip, claiming these were the proceeds of commercial real estate ventures. This time he was the model of compliance, making sure all the appropriate CTRs were filed. In truth, he was counting on the fact that the IRS has to process so many millions of CTRs that his were in little or no danger of being flagged for scrutiny. Soon he was running a million a week through the system, taking one percent off the top as his service fee.
    "Finally, deposits reached a level where the risks outweighed the benefits of doing business so close to home. Mr. Beckwith got nervous and decided to bypass the local banks and eliminate the paper trail. He acquired a Panamanian bank and an unrestricted banking license in Antigua, putting up the requisite one million in U.S. dollars as paid-in capital. He invested an additional five hundred thousand dollars for a second international banking license in the Netherlands Antilles, which doesn't have a tax treaty with the U.S. at this point."
    I raised my hand. "A million and a half? Is it really worth that to him?"
    "Absolutely. With his offshore banks, he can make deposits. He can write his own references, issue letters of credit to himself, all of this protected by complete privacy and with very little interference from the host countries. He doesn't even have to be there to handle management. Keep in mind, too, when people hear you own a bank, they tend to be impressed."
    I said, "I'll bet." Cheney caught my eye fleetingly, probably thinking, as I was, about the banks his father owned.
    Vince Turner paused and looked from Cheney to me.
    I said, "Sorry. Go on."
    He shrugged and continued as though his commentary had been recorded in advance. "By law, an American citizen is required to declare all foreign bank accounts on their yearly tax returns, but these guys aren't any more scrupulous about that than any other aspect of their business. Mr. Beckwith, under the auspices of the banks he'd bought, established an international business corporation, an IBC, in Panama, with shares being held in a Panama Private Interest Foundation, allowing him to avoid both U.S. and Panamanian taxation. With the shell company in place, he began to move currency
physically
from the States to his offshore havens. You move cash, Customs requires a CMIR – a Currency and Monetary Instrument Report – but Mr. Beckwith doesn't much care for filling out these pesky little government forms. No forms means no more violations, at least to his skewed way of thinking. Once deposited in one of his offshore banks, monies are returned to Mr. Castillo in the form of business loans with a twenty-year balloon.
    "Of course, the transport of currency generates difficulties of a different sort. Bills are not only bulky, but weigh more than you'd think. The foreign markets prefer the smaller denominations – twenties and fifties. A million dollars in twenty-dollar bills tops out at over one hundred twenty-five pounds. Try toting that through an airport. Not a problem for our boy. The ever resourceful Mr. Beckwith leased a Lear-jet and now he flies suitcases full of cash to Panama every couple of months. Panama's currency is the U.S. dollar, so he doesn't even have to worry about the exchange rate. Between plane trips,