EL PASO, Texas (AP) — A West Texas lawyer charged with trying to launder $600 million for a Mexican drug cartel was an informant for U.S. Immigrations and Customs Enforcement while he was moving large amounts of cash behind the agency's back, a federal agent testified Wednesday.
The testimony from agent Joshua Fry with the Homeland Security Investigations' Financial Operations and Currency United Strike Force came at a hearing in which U.S. District Judge Norbert Garney denied Marco Antonio Delgado's request to be released on bond.
"We thought he had gone bad on my agents," Fry said in explaining why ICE started an investigation on Delgado after they learned that he had sent someone to Chicago to retrieve $50,000 and bring it to El Paso. The money eventually made it to Delgado's bank account and was later withdrawn.
In denying bail, Garney noted Delgado has an extensive network of acquaintances overseas, might have assets in other countries and faces a "rather extensive exposure to prison time" if the government manages to obtain a conviction.
Delgado's attorney, Ray Velarde, said he will appeal Garney's decision.
Velarde told the judge that Delgado's relatives were prepared to offer all their property, totaling about $800,000, to secure bond. In addition to being an attorney, Delgado also has served as a Carnegie Mellon University and donated money to numerous causes.
Prosecutors say Delgado conspired to launder drug profits from July 2007 through December 2008. They say he's since participated in financial transactions they believe are connected to organized crime.
The investigation into Delgado started in September 2007 after a $1 million seizure was made in Atlanta. The man carrying the money told investigators that he, Delgado and other men had met in Mexico and agreed to transport money for the Milenio Cartel, a drug-trafficking organization based in the Mexican state of Colima and associated with the infamous Sinaloa Cartel. Mexican government information states the cartel was mostly disbanded in 2010.
According to U.S. authorities, Delgado admitted to ICE agents that he had been contacted by people in Mexico about slowing down extradition processes of alleged cartel members and about moving up to $600 million from the U.S. to Mexico. He told the agents the million dollars seized was "a trial run" to see if it was possible, according to the U.S. government.
Velarde questioned why the government waited until this September to indict his client if no money laundering activity was done by Delgado since 2008.
Fry responded by spelling out two financial transactions he said took place after 2008 but that were not listed in the indictment against Delgado.
Velarde said that neither of those two transactions was drug related and said the investigation on the cash moved from Chicago was closed by the end of 2008.
At that point, Fry stated that Delgado went to Cuba to engage in "mass sexual activity with underage women." Fry didn't explain how that was relevant to the money laundering investigation. Calls to the U.S. attorney's office were not immediately replied.
Delgado's arrest Friday surprised those who knew him in El Paso.
"This came totally out of the blue. I still don't believe it," said Ralph Adame, a businessman who has served on the board of the Ysleta Educational Foundation with Delgado. The organization provides scholarships to deserving students in East El Paso.
Adame says he was very close to Delgado about five years ago. "He is a lot of fun, cultured. He knows his liquor, knows his food, he is a great host." Delgado didn't come from a wealthy family, Adame said, "but he did well."
Benita Neumann, executive director of the Ysleta Educational Foundation, said in an email that Delgado has been a member since 2005 and that he serves on "numerous boards and nonprofit organizations."
Richard Barraza, another friend of Delgado and a wine wholesale importer, lamented that the government can release information on a defendant before he is found guilty.
"He is done. The accusation will completely destroy him. People are afraid and embarrassed to say they know him," Barraza said. "They have tarnished him forever."
A profile later removed from Carnegie Mellon University's website says he left his professional duties to work with Mexico's President-elect Enrique Pena Nieto. Pena's team denies knowing Delgado. The university says the biographical information was submitted by Delgado.