Operation Casablanca: Unmasking Florida’s Role in One of the Largest Money Laundering Stings in U.S. History

By Joe Marzo

In the waning years of the 20th century, as the U.S. government intensified its decades-long War on Drugs, it launched a covert operation that would become one of the most successful — and diplomatically controversial — financial investigations in American history. Operation Casablanca, which unfolded from 1994 to 1998, revealed a staggering system of corruption and cartel-linked laundering that reached deep into U.S. banking institutions. At the heart of the scheme? Florida’s complex and often overlooked role as a laundering hotspot.

The Origins of Operation Casablanca

The mission was simple in theory but dangerous in practice: federal agents would go undercover as money launderers and offer their services to Mexican and Colombian drug cartels. Through fake companies and staged transactions, they would track how drug money flowed through banks, front businesses, and international transfers. But this wasn’t just a domestic sting — U.S. Customs agents embedded themselves into the global financial underworld, including taking part in operations on foreign soil.

Operation Casablanca eventually led to 63 arrests, the indictment of three major Mexican banks, and the exposure of a financial web used to clean nearly $100 million in cartel profits. The operation shook the foundations of trust in cross-border banking — and exposed the uncomfortable truth that major banks were actively participating in illegal laundering practices.

Florida: The Money Launderer's Playground

While California and Texas garnered headlines due to their proximity to the border, it was Florida — especially Miami, Tampa, and Orlando — that proved to be a critical laundering corridor. Florida’s long-standing ties to Latin America, booming real estate sector, and history of financial secrecy made it fertile ground for criminal enterprises looking to hide their money in plain sight.

Florida banks, currency exchanges, and real estate agents were used to move and disguise millions in drug proceeds. Federal agents identified Florida-based shell companies that had no employees, no physical offices, and no real business operations — but were mysteriously handling vast amounts of wire transfers and high-value property purchases.

In many cases, the cash deposits were structured below the $10,000 reporting threshold, a technique known as "smurfing" to avoid detection. Investigators traced numerous deposits made in branches of banks like Wells Fargo, Bank of America, and smaller regional banks, where oversight was lax and questions weren’t asked.

The Role of Real Estate and Tourism

South Florida’s red-hot real estate market became a favored avenue for laundering funds. Investigators noted how drug money was funneled into luxury condos, hotels, and beachfront homes, often purchased in cash or through layered transactions involving offshore entities.

Florida’s tourism economy also provided cover. Hotels, nightclubs, and travel agencies in Miami and Orlando were used as fronts for cartel operations. Some launderers even posed as legitimate tour operators or hospitality investors, further blurring the line between legitimate enterprise and criminal enterprise.

A Diplomatic Firestorm

After the public announcement of the operation in 1998, Mexico responded with fury. The Mexican government was not consulted about the operation being conducted — in part — on its soil. Some of the indicted bankers were high-ranking executives in Mexico’s most powerful financial institutions. Their arrests and public exposure strained U.S.-Mexico diplomatic ties.

U.S. officials defended the operation as necessary, citing the indispensable cooperation of undercover agents and whistleblowers. However, the international tension over sovereignty and undercover jurisdiction cast a long shadow. Few of the Mexican nationals indicted in the case ever stood trial in the United States.

Florida's Banking Wake-Up Call

In Florida, Operation Casablanca triggered a wave of reforms and increased scrutiny. Banks began tightening anti-money laundering protocols. The Bank Secrecy Act and Know Your Customer (KYC) regulations became central to financial compliance, especially in South Florida institutions.

Yet, even after Casablanca, the state remained vulnerable. In the 2000s and beyond, Florida would be cited in cases involving laundering tied to Russian oligarchs, Venezuelan officials, and international fraudsters. The state’s unique combination of international clientele, cash-based businesses, and luxury real estate continues to attract those looking to clean dirty money.

The Legacy of Operation Casablanca

While not as widely known today as other DEA or FBI operations, Operation Casablanca left an indelible mark. It served as a blueprint for future international money laundering stings and revealed the extent to which banks — some with household names — could be co-opted by cartels.

For Florida, the sting was both a warning and a mirror. It exposed a dual identity: a state known for beaches, retirees, and tourism — but also a financial frontier where global criminal networks could thrive if left unchecked.

Conclusion

Florida’s role in Operation Casablanca was not incidental. It was integral. From Miami’s financial corridors to Tampa’s shell companies and the sprawling real estate deals in Orlando, the state was a key artery in the cartel money laundering pipeline. Though the operation ended over two decades ago, the vulnerabilities it exposed — weak oversight, complicit institutions, and the seduction of quick profits — still haunt Florida’s financial and real estate sectors today.

The lesson? Money doesn’t just talk — it moves. And Florida was one of its favorite destinations.

Sources:

• U.S. Customs Service, Operation Casablanca Official Report, 1998

• New York Times, “U.S. Sting Nets Mexican Bankers in Drug Inquiry,” May 1998

• Miami Herald archives, 1998–1999

• U.S. Government Accountability Office, Money Laundering: Overview of Federal Enforcement Efforts, 1999

• FinCEN Historical AML Documentation

• Congressional Testimony on Drug Money Laundering, 1999