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Thai Crackdown on Money Laundering by Drug Smugglers - 2002-01-12

Thailand's crackdown in the past few months on money laundering by drug smugglers may help close the net on a suspected drug lord, Wei Hseuh-kang. The United States is cooperating with Thailand in the fight against illegal narcotics.

Thailand is focusing on the money trail as it cracks down on drug syndicates.

In late December, Thai authorities searched eight premises in Bangkok and the northern cities of Chiang Rai and Chiang Mai. The raids yielded banking documents and safes that link reputed drug lord Wei Hseuh-kang to more than two million dollars in suspected drug money, spread among a hundred bank accounts. Police say the accounts apparently were used to launder the money transferring drug cash into legal businesses to hide its source.

Wei and his brothers, Wei Hsueh-long and Wei Hsueh-yin, are linked to drug trafficking operations involving Burma's ethnic minority Wa people. The Wa live near Burma's border with Thailand, and the Wei Hsueh-kang is thought to be in the same vicinity.

According to police reports, the Wa are the dominant heroin trafficking group in Southeast Asia. But since the raids in Bangkok and the northern cities last month, Thai media say Wa leaders have called for Wei Hseuh-Kang and his followers to leave the northern Burmese town of Mong Yawn by the end of February. In 1994, Wei was sentenced to life in prison after a Thai court convicted him of exporting heroin to the United States. He fled to Burma, however, when he was granted bail to await an appeal of his conviction.

The Chinese-born Wei brothers once had close links with Chinese Nationalists who fled to Laos and northern Thailand after the communists took over China in 1949. The Weis allegedly began smuggling drugs in the 1960's, near Burma's border with China. Burmese Communists drove them south toward Thailand in the early 1970's.

Since the 1980's, the gang may have exported up to nine-thousand kilograms of heroin, largely to the United States and Europe. Much of the money they earned may have been laundered through Thai banks.

Hiding their cash is getting harder. Over the past few years, Thailand has toughened its money-laundering laws. Now, banks must report large transactions of suspicious funds to the Anti-Money Laundering Office. The agency can freeze accounts until it verifies the source of the funds.

The head of the anti-money laundering agency, Police Colonel Preephan Prempooti, says drug syndicates may change tactics to conceal the cash they process. "They are going to turn to the old style method - hiding money under the ground, buried, or hiding in the secret safe house to keep the money away from being seized," he says. Col. Preephan thinks the syndicates will try to smuggle their money into Burma. But that may become more difficult because of new efforts by the Thai police to secure the border.

Thailand is not the only country hunting Wei Hseuh-kang. Col. Preephan says he is wanted by the United States for trafficking in heroin. The United States is offering a $2 million reward for his capture. "He has been known as the drug lord. Especially, he is wanted by the U.S. Department of Justice in Eastern New York District for conspiracy and the importing and smuggling of the white powder into the United States," he says. This week, agents from the U.S. Drug Enforcement Agency are arriving to help Thai investigators track down Wei and his drug money.

Even as the Thai government closes in on the finances of drug gangs, it finds new challenges in its war on smugglers. Wednesday, the government said opium production has risen in the so-called Golden Triangle where the borders of Thailand, Burma and Laos meet.

Afghanistan had been the world's largest source of opium, which is used to make heroin, but production there has fallen in the past few years. The Thai police says farmers in the Golden Triangle increased their crops as world opium prices rose.