US Prosecutors Change Course on Money Laundering Charges Against Prominent Attorney

John Pacenti
Daily Business Review
August 8, 2008

In a surprising turnabout, federal prosecutors who indicted prominent Miami attorney Ben Kuehne on money laundering charges now say they plan to offer no trial evidence directly linking him to drug profits.

Instead, the government will offer testimony to show that millions of dollars used to pay Colombian druglord Fabio Ochoa's high-powered defense team was tainted by the family's legendary cocaine smuggling network.

"It's a remarkable document," former U.S. Attorney Kendall Coffey, who is not involved in the case, said Thursday. "It's an astonishing acknowledgement of what appears to be a roadmap to a negligence case rather than intentional criminality."

Kuehne faces seven indictments charging him with money laundering concealment and conspiracy for vetting the money paid to celebrity Miami attorney Roy Black to defend Ochoa. Prosecutors offered a shrunken view of the case in court filings July 31 as they presented a bill of particulars to support the indictment, which had been winnowed once before.

Testimony will show Ochoa family cattle and horse concerns used for $5.1 million in defense fees were tainted by Ochoa's $300 million drug operation, wrote the lead prosecutor, Assistant U.S. Attorney Robert Feitel in Washington. He did not return a call for comment by deadline.

Kuehne's defense attorneys, John W. Nields of the Howrey law firm in Washington, and Jane Moscowitz of Moscowitz & Moscowitz in Miami, had no comment on the new documents.

Kuehne, who was paid nearly $200,000 by Black, concluded the money was clear of any criminal taint.

Prosecutors say they plan to offer evidence from a New York money laundering sting operation and the black market peso exchange system, which converts U.S. drug profits to Colombian pesos. This section of the government's court filing comes with no mention of Kuehne.

"With respect to the remaining wire transactions, the government represents that it does not currently intend to introduce evidence directly tracing narcotic sales to specific assets that resulted in wire transfers to defendant Kuehne's attorney trust account," the bill of particulars said.

Exhibits released with the bill of particulars list alleged false statements Kuehne made to Black in four opinion letters on the state of the Ochoa money. Kuehne, in the opinion letters, maintained the Ochoa cattle and livestock were separate from drug activities of Ochoa and his brothers. Kuehne concluded Ochoa properties, a cattle ranch, a horse farm and a chain of restaurants known as Las Margaritas were independent from drug trafficking and existed well before Ochoa and his brothers became involved in the Medellin drug cartel."The history of the Ochoa family in Colombia is a storied one in which the Ochoas have earned a position of respect and prominence and a reputation for honesty and integrity," Kuehne wrote.

He said Ochoa's father was well-regarded for raising Paso Fino horses, achieving sales of $500,000 to $1 million and stud fees up to $10,000 each.

"Witness testimony will also establish that the Ochoa family used phony sales of Paso Fino horses to launder drug proceeds to the United States," according to the bill of particulars.

Kuehne was charged in May in a third superseding indictment along with Colombian attorney Oscar Saldarriaga Ochoa and Colombian accountant Gloria Florez Velez.

Government filings list 16 alleged co-conspirators, including money broker Hernando Saravia and Ochoa relatives.

Prosecutors say they intend to show how pesos were turned into dollars by a money broker using $1.8 million cash from undercover drug stings.

Saravia appears to have started working for the government in 2002 after he was caught trying to move $400,000 in drug profits from New York to Colombia, according to court documents. Kuehne depicted Saravia in the letters as a well-established Bogota flower exporter and jeweler and said Velez used Saravia to convert Ochoa's pesos to dollars for Black.

"Ms. Florez Velez personally confirmed that Colombia bank officials have refused to authorize wire transfers to the United States on behalf of or for the benefit of Fabio Ochoa Vasquez, notwithstanding compelling proof of the legitimacy of the funds," Kuehne wrote.

Kuehne, a respected lawyer in South Florida, represented Vice President Al Gore in the 2000 presidential recount and handled other high-profile civil rights and election cases.

The case against him has been criticized by criminal defense attorneys as the latest government effort to scare lawyers away from defending such clients as Ochoa. An obstruction of justice charge against Kuehne was dismissed after protests from the criminal defense bar. His attorneys point to a 1988 exception in the federal anti-money laundering statutes that exempts attorneys from criminal liability for accepting defense fees.

Coffey said the government must do more than just show Kuehne may have been negligent in the difficult task of sorting out the good, the bad and the ugly in the Ochoa family fortune. To gain a conviction, Coffey said prosecutors must prove Kuehne intended to convert illegal drug profits on the black market peso exchange.

The government has no audiotapes that would bolster its case against Kuehne, according to a source close to the investigation.

"Unless they got tapes or some kind of red-hot smoking gun, this case may not get past a dismissal motion," said Coffey, a name partner with Coffey Burlington in Miami.

He said a good example of giving a negligent but not criminal opinion was former Secretary of State Colin Powell's testimony to the United Nations that Iraq had weapons of mass destruction.

"You can be wrong giving an opinion, even tragically wrong," Coffey said. The attorney said it is ironic that the clearest traceable illegal funds are the government's own money from the drug stings. He said it's not illegal to be fooled by your own government.

"The government is going to be talking out of both sides of its mouth because it was doing everything it could to create this scam," Coffey said.

Source: Law.Com