On Tuesday, August 20, two ex-Major League Baseball (MLB) players, Octavio Dotel and Luis Castillo, and 16 others were accused of being linked to a criminal network in the Dominican Republic to smuggle drugs from South America to the United States. Authorities arrested Dotel and cited Castillo for their involvement.
The authorities who made these arrests are attempting to close in on a notorious drug-trafficking and money-laundering ring lead by kingpin César Emilio Peralta, also known as “César El Abusador.” According to prosecutors, this operation, which involves hundreds of narcotics agents, prosecutors, and other government officials, could be the largest targeting of organized crime in the Dominican Republic’s history. In addition, the country’s attorney general, Jean Alain Rodríguez, labeled the dismantlement of Peralta’s network as “the most important drug trafficking structure in the region.”
The charges of the former MLB players remain unclear, but Rodríguez indicated during a press conference that Peralta utilized them as a means to launder money with a “complicated corporate framework to disguise the origin of his fortune, also using numerous individuals belonging to his family and social circle to hide his assets.” During the press conference, Rodríguez also explained that the players are collaborating with the U.S.’ investigation and are exchanging information with the Federal Bureau of Information (FBI) and the Drug Enforcement Administration (DEA). Coincidentally, their alleged connections were announced two months after another Dominican MLB player, David Ortiz, was accidentally shot.
Prior to their present-day situation, Dotel and Castillo experienced fruitful baseball careers. Dotel earned $41.1 million during a 15-year pitching career for the MLB and, before retiring in 2013, he went to the World Series twice. He set a record for playing on more teams than any other player, at a total of 13 teams. Castillo made $56.8 million during his career as an infielder from 1996-2011 and was a three-time All-Star, acquired three Gold Gloves, and won the 2003 World Series with the Florida Marlins. Citing his success, Castillo denied his involvement on Twitter writing, “The truth is my country no longer works, my God, do you think that after making millions of dollars in Baseball I am going to dirty my hands with drugs?”
Shortly after Dotel’s arrest and Castillo’s alleged involvement was announced, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) got involved by identifying Peralta and his organization as “significant narcotics traffickers” pursuant to the Foreign Narcotics Kingpin Designation Act (the “Kingpin Act”). As a result, all assets in which Peralta’s organization and members have an interest in the U.S. or in the possession of the U.S. will be blocked and must be reported to OFAC. According to the Under Secretary for Terrorism and Financial Intelligence, Sigal Mandelker, “Treasury is targeting these Dominican drug kingpins, their front persons, and the nightclubs they have used to launder money and traffic women…This administration continues to systematically target strategically important drug kingpins and cartels fueling our country’s opioid epidemic.”
Since OFAC issued the Kingpin Act, more than 2,100 entities and individuals—namely the Sinaloa Cartel, previously led by kingpin Joaquín “El Chapo” Guzman—have been named pursuant to the Kingpin Act for their role in international narcotics trafficking. The act became law in December 1999 with the intent to deny international narcotics traffickers access to the U.S. financial system and to prohibit trade between the traffickers and the U.S. As listed in Section 805(b) of the law, this denial is authorized when the President determines that a person or entity plays a significant role in international narcotics trafficking. The law was modeled after Executive Order 12978, which was issued in 1995. This order became an effective sanctions program against the Colombian drug cartels.
In order to implement the Kingpin Act, the U.S. Department of Treasury must identify drug kingpins as “significant narcotics traffickers,” and suggest the President impose sanctions on them. Not only may these sanctions target the kingpins themselves, but they can also include their businesses and, as is seen in the present case of Peralta’s organization, their operatives. Individuals who violate the Kingpin Act may face up to 10 years in prison and/or fines pursuant to Title 18 of the U.S. Code. Furthermore, officers, directors, and agents who knowingly participate in a violation of the act can be penalized up to $5 million in fines and/or up to 30 years in prison.
Since the Kingpin Act became law, there have been outspoken proponents and opponents of the law. The former head of the Office of Financial Operations at the DEA, Donald Semeski Jr., said the act has been “tremendously effective” in protecting the U.S. from the “scourge” of illegal drugs. Contrarily, Eric Olson, the deputy director of the Wilson Center’s Latin American Program, said the use of the Kingpin List, while “powerful and legitimate”, “carries with it the risk of collateral damage that can potentially undermine legitimate sectors of the financial system and ultimately the economy.” Olson cited the case of the Rosenthal family and their money-laundering network in Honduras as support for his claim. The family was sanctioned by the U.S. Department of Treasury in 2015, which undeniably hurt their criminal network but, as a result, created sentiments of uncertainly among the U.S. clients and employees of the family’s legitimate businesses.
Another critique of the Kingpin Act is the lack of due process for the sanctioned entities and individuals. Semesky claimed the process for adding names to the Kingpin List is thorough, but did admit to errors in the past. For example, in 2017, the U.S. had to withdraw more than 20 Latin American entities from the list after they successfully argued they were wrongfully sanctioned. In addition, it can sometimes be difficult for American individuals and organizations to determine if they are dealing with a blocked entity since most small U.S. businesses do not have the resources to uncover this information. Former U.S. federal prosecutor David Hall argued that “placing the burden on these businesses is not fair or practical.”
Now, 17 years after the implementation of the Kingpin Act, suggestions are pouring in over improving evaluation of the act’s effectiveness and commissioning a comprehensive review of the pros and cons of the Kingpin List’s sanctions. It is unknown if OFAC plans to make any amendments to the law, but it is clear that the office will continue to pursue Peralta’s operation and similar drug trafficking organizations.