CONTACT: MELODIE RYDALCH
801-325-3206
801-243-6475 (cell)

GEORGE DOUGHTERY
FBI 801-579-1400

FOR IMMEDIATE RELEASE:
January 05, 2004

PRESS RELEASE
HERNANDEZ SENTENCED TO 87 MONTHS IN PRISON FOR ROLE IN SIGNIFICANT
MONEY LAUNDERING OPERATION

SALT LAKE CITY -- Mario Roberto Hernandez (DOB 12-6-58), a naturalized United States citizen from Bogata, Columbia, and a former resident of Sandy, will spend 87 months in federal prison for his role in running a sophisticated money laundering operation based in Utah.

The money laundering operation involved four individuals in Utah. The four were involved in laundering the proceeds of the sale of illegal narcotics, primarily cocaine and heroin, imported from Colombia and sold in the United States. Most of the cocaine was sold in New York and Texas. The individuals in Utah laundered the cash generated by the sale of cocaine through financial institutions, including banks and credit unions in Utah. More than $5 million was laundered from January 1998 through January 2002. The defendants were arrested following an FBI investigation dubbed "Operation Utah Powder." The Salt Lake City Police Department's Financial Crimes Unit also assisted in the investigation.

Hernandez was sentenced this afternoon by U.S. District Judge Dale Kimball. Hernandez also will serve 36 months of supervised release when he leaves prison and pay a $50,000 fine. Federal sentencing guidelines for the case were 210 to 252 months. Federal prosecutors offered a motion for downward departure in the sentence based on significant cooperation Hernandez has provided the government. Prosecutors asked Judge Kimball to sentence Hernandez to 105 months in prison -- a 50 percent reduction in the low end of the sentencing guideline range. Judge Kimball found the sentencing guideline range in the case to be 87 to 108 months and issued the 87-month sentence. He will self-surrender to begin serving the sentence on Feb. 5, 2004.

Hernandez and his wife, Janeen Beck Hernandez (DOB 2-14-59), were charged in a 146-count indictment returned in January 2002. The charges included one count of money laundering conspiracy, 109 counts of money laundering, 35 counts of structuring financial transactions to evade reporting requirements, and one count of criminal forfeiture. They were arrested by the FBI in California on January 13, 2002. (Editor's note: Structuring financial transactions to evade reporting requirements is essentially an effort by the defendant to conduct a financial transaction at a bank or credit union using what is the proceeds of unlawful activity generally (1) with the intent to promote the carrying on of such specified unlawful activity and (2) knowing that the transaction was designed in whole or in part to conceal or disguise the nature, location, source, ownership, and control of the proceeds of said specified unlawful activity; and (3) knowing that the transaction was designed in part to avoid a transaction reporting requirement under federal law. For example, deposits or transaction over $10,000 trigger federal reporting requirements for the bank -- which those laundering money attempt to evade.)

Hernandez pleaded guilty on June 10, 2002, to one count each of money laundering conspiracy, money laundering, and structuring financial transactions to evade reporting requirements.

Janeen Hernandez pleaded guilty to three counts, money laundering conspiracy, money laundering, and structuring financial transactions to evade reporting requirements, in August 2002. Her sentencing is pending.

FBI investigators believe that Mario and Janeen Hernandez were responsible for laundering more than $3.7 million in illegal drug proceeds.

Another subject of Operation Utah Powder, Jairo Vanegas, also known as Jairo Vanegas-Gomez, age 50, a Columbian national who formerly lived in Draper and Salt Lake City, was arrested by the FBI in January 2002. He was charged in an indictment returned by a federal grand jury on February 6, 2002, with money laundering and money laundering conspiracy. He pleaded guilty on October 10, 2002, to money laundering. As a part of his plea agreement, he admitted laundering $430,000 in illegal drug proceeds. He was sentenced January 6, 2003, to 46 months in prison. It is anticipated he will be deported at the conclusion of his sentence.

The final defendant, Tomas Martinez, also known as Tomas Martinez-Fernandez, 45, was indicted by a federal grand jury on March 15, 2000. Martinez was charged with 28 felony counts, including mail fraud, wire fraud, interstate transportation of victims of fraud, money laundering, bank fraud, and false statements regarding loans. Martinez was arrested by the FBI in Sandy on March 20, 2000. He pleaded guilty in September 2001 to money laundering, money laundering conspiracy, structuring of financial transactions to evade reporting requirements, and wire fraud. These charges related to loan schemes and laundering proceeds of illegal narcotics. Martinez admitted to laundering more than $2 million in drug proceeds. He was sentenced on March 4, 2002, to 52 months in prison and ordered to pay $812,205 in restitution. Martinez was formerly the president of International Business Services (IBS) with offices at Eagle Gate Plaza and other locations in Salt Lake City. Mario Hernandez was the vice president of IBS. It is anticipated that Martinez will be deported at the conclusion of his sentence.

The charges against the four Utah defendants stem from a scheme and conspiracy to launder the proceeds of Colombian cocaine sold in the United States. According to the FBI, the Utah defendants in the case followed the instruction of Colombian drug traffickers and traveled to cities outside of Utah to pick up cash. The cash was given to them during pre-arranged meetings by anonymous couriers, usually in suitcases, on the streets of other cities. The Utah defendants then transported the cash to Utah and elsewhere and used a variety of techniques to launder the money. Some of the techniques included direct cash smuggling via commercial airlines to Columbia; the purchase of cashier's checks and money orders; the direct deposit of cash under $10,000 to avoid the filing of a currency transaction report; the conversion of small denomination bills into $1,000 bills; the purchase of wire transfers via banks, credit unions, and Western Union; the falsification of invoices; and the Columbian Black Market Peso Exchange Mechanism. The Colombian Black Market Peso Exchange is a way for Colombian narcotics traffickers to repatriate the proceeds from their drug sales in the United States.

Money laundering activity in this investigation occurred in Utah, Nevada, California, Texas, Ohio, New York, Georgia, Florida, Columbia, Panama, Cayman Islands, Mexico, Italy, Spain, the United Kingdom, and Latvia.

Over the course of Operation Utah Powder, the FBI has seized and forfeited more than $1.4 million from bank accounts, search warrants, and cash seizures. A substantial amount of money was laundered through the bank accounts of local Utah businesses controlled by the Utah defendants, including Grupo De Empresas Alvarez (GEA) USA, Inc., a dinnerware company operated by Mario and Janeen Hernandez; Ginez Navarro, Inc.; Los Condores; E. Ungarao, Inc.; Energy Marketing and Finance; and Long Investments, controlled by Martinez.

The FBI's investigation began in Utah and three of the four Utah participants in this operation have now been sentenced. The FBI's criminal investigation is continuing in other jurisdictions, both nationally and internationally, with the help of international law enforcement partners. To date, seven other individuals have been charged and five arrested in cases that remain under seal. In addition to the arrests, 13 kilos of heroin have been seized.