The Cornerstone Report: Volume 2, Issue 1

Oil Wells Seized In
ICE Money Laundering Case

An ICE investigation into drug money laundering led to the seizure of an oil company and 43 oil wells (similar to the one pictured above) in January.

Red Flag Indicators Frequent or unusual use of trust funds in business transactions or financial activity. Financial transactions to countries known to be tax havens. Frequent use of nominee business owners acting as representatives in transactions.

An ICE investigation into a drug money laundering scheme resulted in the January 25 seizure of an Arizona oil company and 43 oil wells in northwest Pennsylvania.

A number of the company’s trusts and bank accounts in Europe were also seized as a result of the investigation, which stemmed from the 1981 drug smuggling conviction of Paul Hindelang.

“Like no other case in recent memory, this investigation demonstrates our perseverance in tracking down the ill-gotten gains of international crime lords,” said Jesus Torres, ICE’s Special Agent-in-Charge for Miami.

In the 1970s, Hindelang headed one of the country’s biggest marijuana smuggling enterprises, operating out of Florida. He pled guilty to importing roughly 250 tons of marijuana into the United States and conspiring to import an additional 150,000 pounds.

As part of his 1981 plea agreement, Hindelang agreed to forfeit $640,000 to U.S. authorities—a sum that he said then represented the total of his illegally earned assets.

However, federal investigators later learned that Hindelang had squirreled away millions of dollars of his ill-gotten drug funds in a veritable maze of offshore accounts and corporations in Switzerland, Panama, the Cayman Islands and numerous other locations. Hindelang admitted in 1997 that he had turned over his drug fortune to a Costa Rican accomplice who managed his funds from a Swiss bank account.

ICE’s investigative efforts to expose Hindelang’s holding resulted in the seizure of $50 million from his accounts in 1998. An additional $15 million in illegal drug proceeds was seized in 1999.

The seized company, Shaboom Oil Inc., headquartered in Phoenix, Arizona, owned numerous operating wells and held the mineral rights to approximately 1,100 acres of land in the Allegheny National Forest in northwest Pennsylvania. In addition, ICE seized all ownership shares of Shaboom Investments Inc., a holding company based in Panama that owns the oil company.

The oil company and associated assets seized in January were valued at $6.5 million— bringing the total seized from Hindelang’s illicit investments to more than $70 million. The investigation into Hindelang’s remaining drug funds continues.

ICE worked with the Monroe County (Fla.) Sheriff’s Office in the effort to locate and target Hindelang’s assets.

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Cornerstone Calendar

Cornerstone is U.S. Immigration and Customs Enforcement's (ICE) comprehensive investigative initiative for fighting financial crime, trade fraud and intellectual property crime.

The Cornerstone Report is a quarterly bulletin highlighting key issues related to ICE financial and trade investigations.

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