Caymanian arrested in U.S. drug probe

U.S. Homeland Security investigators arrested Caymanian businessman Bryce Gilroy Merren earlier this month in connection with what U.S. federal court records allege was an attempt to set up a money laundering operation to cover up planned drug smuggling activities.

The arrest was reported in U.S. court records on March 5. Mr. Merren was expected to appear in a Puerto Rican court Friday, charged in connection with a criminal complaint with conspiracy to distribute narcotics and money laundering under U.S. criminal code sections 21 and 18, respectively. Puerto Rico is an unincorporated territory of the U.S.

A probable cause affidavit, filed by Homeland Security Special Agent Harry Schmidt, alleges that Mr. Merren met at different times with two undercover federal agents who posed as accomplices in setting up a drug smuggling operation in Puerto Rico. The records allege that Mr. Merren intended to use certain business interests in the Cayman Islands and the southern Caribbean island of Curacao to help launder the money. 

The criminal complaint is not an indictment in federal court and is not proof of any wrongdoing. U.S. federal investigators are required to file such affidavits prior to arresting someone suspected of criminal offenses. 

Mr. Merren’s brother, Randy, was contacted Friday for comment. Randy Merren confirmed he was in Puerto Rico trying to sort out attorney arrangements for his brother. He declined to make any statements on Bryce Merren’s behalf. 

According to Special Agent Schmidt’s probable cause affidavit, U.S. federal investigators in San Juan, Puerto Rico, received confidential information in July 2013 that Bryce Merren was “seeking to purchase approximately 3,000 kilograms of cocaine and establish a U.S. bank account in order to deposit drug proceeds and make an initial payment for the transportation of narcotics.”

The records did not state from where the alleged narcotics were to be transported. 

The first meeting between Mr. Merren and an undercover U.S. agent, referred to as UCA1 in the court documents, was held on July 20, 2013. During the meeting, investigators said Mr. Merren “suggested” conducting a narcotics sea transfer in September after returning to the Cayman Islands from a boat show in Florida. 

“It was agreed that an initial 1,000 kilograms of cocaine would be transferred in the first smuggling venture and subsequently smuggling ventures of 2,000 and 3,000 kilograms of cocaine,” the probable cause affidavit states. 

On Aug. 27, 2013, court records reveal that UCA1, Mr. Merren and a second undercover agent [identified as UCA2] posing as a “financial facilitator” met in San Juan. This meeting was held to set up a U.S. account that would assist in the money laundering scheme, investigators said. 

“[Mr.] Merren stated that he intended to deposit US$400,000 a day into the accounts through the use of commercial merchant machines,” court records state. “The accounts would be used as a guarantee for the narcotics smuggling venture and {Mr.] Merren agreed to coordinate for the narcotics sea transfer to take place on or about November 2013.” 

Further discussions regarding the bank accounts occurred in September between Mr. Merren, the two undercover agents and a man identified in the court records as an associate of Mr. Merren’s. Arrangements were also made for the planned cocaine transfer around this time. 

A third meeting was held on Nov. 6, 2013, between Mr. Merren and the two undercover agents, court records state, in order to discuss details of the alleged money laundering scheme. 

“[Mr.] Merren explained to UCA2 that he has legitimate businesses in the Cayman Islands and Curacao where he receives funds from customers from all over the world that conduct credit card transactions utilizing his businesses’ merchant machines in order to convert foreign currency into U.S. currency,” the probable cause affidavit states. “[Mr.] Merren charges a percentage for the exchange and then wire transfers the bulk amount of the currency back to its correspondent owner.

“[Mr.] Merren also prepares purchase receipts for the customers in order to make it seem as if they are purchasing or paying for services,” the court records stated.

Court records said it was agreed in December 2013 that Mr. Merren would make an initial down payment to cover “transportation fees for the smuggling venture” and deposit the payment into a personal bank account he established, with the help of UCA2, in Puerto Rico. 

“It would serve as a guarantee in order to conduct the smuggling venture,” the court records noted. 

On March 3, 2014, a wire transfer of US$200,000 was made from a Cayman Islands bank account to the U.S. bank account located in Puerto Rico, court records state. “[Mr.] Merren advised UCA2 via BBM [Blackberry] that the US$200,000 would serve as a down payment to facilitate the narcotics smuggling venture.”