Sunday, August 17, 2008

Major Israeli Newspaper "Maariv" reveals: The Jewish Laundry of Drug Money

Sunday, November 25, 2007

The Jewish Laundry of Drug Money





Foreword by Israel Shahak

In contrast to the lack of any meaningful discussion of the organized American Jews and their power, which in my view is due to their great political influence in general and their predominance in the media in particular, the Hebrew press does not have such inhibitions This is due, among other reasons, also to the fact that the power of the State of Israel depends to a considerable extent on its ability to use the organized American Jews and their power for its own interests The first article translated here describes the power of the Jews at what can be described as Clinton's court The second describes the predominant part which the Haredi [ultrapious] New York Jews play in laundering the drug money. Their ability to do so for quite a long time with relative impunity is connected in my opinion with the great political influence of the Jews described in the first article.

All notes mine

Israel Shahak

Maariv, Tel Aviv, September 2, 1994

The Jewish Laundry of Drug Money
By: Maariv..s New York correspondent Ben Kaspit

Rabbi Yosef Crozer fell because of his big mouth "I launder money, a lot of money", he once told an acquaintance. "Every day I take $300,000 from 47 Street in Manhattan, bring it to the synagogue, give a receipt and then take a commission." The man who heard that story from Crozer was, how sad, an undercover Jewish agent of the US agency for fighting drug use, DEA. A month later, in February 1990, Crozer was arrested by agents on his way from 47 Street to Brooklyn. They found on him prayer books, five passports, and also $280000 dollars in cash in the trunk of his car. He traveled that route every day. He would arrive at the gold trading oflice on 47 Street in the afternoon, and leave shortly later, carrying suitcases and bags loaded with cash. From there he drove to the "Hessed Ve'Tzadaka" ["Mercy and Charity"] synagogue in Brooklyn, which was turned into an instrument for laundering millions of dollars, the revenue from drug sales in the New York area.

That was how Crozer made his living. Assuming that the commission for laundering money ranged in the area of 2-6%, Rabbi Crozer can be presumed not to have suffered from hunger. The investigators who questioned him faced a simple task: A respectable and pious Jew who never imagined that he will be interrogated, a son of a highly respected rabbi who headed a large yeshiva in city of New Square, Crozer broke down and cooperated. But then his lawyer, Stanley Lupkin, argued that his client, a pious Jew, had no idea that he was laundering drug money. Crozer, according to his lawyer, believed that he was laundering money for a Jewish diamond trader "who trades in cash and not for Gentile drug traders", and was using the situation to make some extra money just for his synagogue. It seems that this argument had some effect since Crozer was sentenced to one year and one day imprisonment. In exchange for a lenient sentence, he supplied his interrogators with valuable information which helped them to capture a person whom they had been seeking for a long time: Avraham Sharir, another pious Jew, the owner of a gold trading office on 47 Street, who was really one of the biggest sharks of laundering drug money in New York City. Sharir, an Israeli Jew aged about 45, to whom we will later return, subsequently confessed to having laundered $200 million for the Colombian drug cartel of Kali.

The drug trade is considered to be the most profitable branch of crime in the world. The profit margin ranges in the area of 200% for cocaine and 1,200% for heroin. The amounts of money circulated in the branch are larger than the budgets of many small states. The temptation is great. The main problem of the Colombian drug barons who control a significant part of world drug trade is how to get rid of the money. It is a problem of the rich, but a nagging one. Two major Colombian drug cartels operate in the US: the Kali cartel and the Medellin cartel. The killing of the head of the Medellin cartel, Pablo Escovar, by Colombian authorities in December 1993, greatly weakened this cartel, which had controlled the drug trade in the New York area. The Kali people, in contrast, hold a monopoly over the Los Angeles and Miami area markets. At present, the Kali people distribute about 80% of the world's cocaine and a third of heroin. The Kali drug cartel makes $25 billion each year within the US alone. The money must somehow be shipped out of the US without arousing the attention of the American authorities. Besides, the cash must be given a seal of approval and, one way or another, become legitimized. Around this complex issue a mega-business has sprung up: laundering and smuggling drug money. American customs investigators have found millions of dollars in containers supposed to have contained dried peas, in double-sided gas tanks, in steel boxes attached to freight ships. In 1990 they found $14 million in cash in a shipment of cables, supposed to have been sent from a Long Island warehouse to Colombia. According to records found on the site, that was shipment no234 (multiplied by 14 million, calculate it yourselves). The same year, at Kennedy Airport, in a warehouse, 26 large containers were found which were supposed to have contained bull sperm. The latter was not there, but there were $65 million. In May of this year American investigators raided a bowling ball plant in Long Island. They picked the balls, cut them in half and found within 210,000 dollars, in used $100 bills.

Despite their active imagination, the drug barons find it hard to keep up. $25 billion is a lot of money and it must fill a lot of space, since most of the money gained in drug deals comes in bills of $l0-20. And that is how the match was made between the drug cartels and the 47 Street in Manhattan. That street is the world center for trading diamonds, gold, jewels and precious stones. Hundreds of businesses are crowded in there, between Fifth and Sixth Avenue - shops, businesses, display halls. In the back rooms and on the top floors, far from public access, the action takes place. That is where the major traders sit, that is where the deals are made. Diamonds, gold and jewels pass from hand to hand, with a handshake. The frantic activity there offers an ideal cover for illegal transfers of money. "In fact, even legitimate business appears, on 47 Street, to be dark and mysterious", said a customs official. "Merchandise arrives constantly, boxes, suitcases and packages are constantly opened, everything arrives in armored cars, under heavy security and a shield of secrecy. Now, go find the black money."

"The match between the drug barons and 47 Street", an American customs investigator told "Maariv", " is ideal." The gold and diamonds industry circulates large amounts of cash. The diamond traders are accustomed to transporting large amounts of money in cash, from one state to another, efficiently and without leaving a trace. Large amounts of money pass from hand to hand on 47 Street, without arousing suspicion. A diamond trader might launder $5 million every day, without arousing special attention. It is difficult to monitor the deals, to locate the sources of the money and it is very difficult to infiltrate that closed field, which is based on personal acquaintance and trust. Added to it is the fact that in the course of the past five years, the diamond industry on 47 Street has been in a deep slump, which led many traders into bankruptcy. "A trader like that", said an investigator, "faces the choice of bankruptcy or making easy, quick and relatively safe money Not everyone is strong enough to withstand the temptation."

All of that would not have been of interest to us if not for the massive Israeli or Jewish presence on 47 Street. "At least 50% of the diamond traders there are Israelis", so an Israeli diamond merchant who wishes to remain anonymous, told "Maariv": 'Not a few Israelis also operate in the field of jewels, precious stones and gold. All of them came to New York to make fast money, conquer the market, get their big break. Not all of them succeeded, especially not recently." But Jewish presence on 47 Street is much greater than that. Experts in the field estimate that 75-80% of the active traders on the street are Jews. A large part of them are very talous Orthodox Jews, mainly Hassids. There is also a respectable representation of Jews from Iran and Syria, usually also very pious. One can get along fine in Hebrew on 47 Street. There are many more kosher restaurants in the area than in the entire city of Tel-Aviv. The place is also the biggest laundry for drug money in the US.

The expansion of the phenomenon of laundering drug money in the US in general and on 47 Street in particular, led to the establishment of a special American task force, to combat the phenomenon. The unit is called Eldorado, after the mythical South American city of gold. It is staffed with 200 agents, officials of the US customs and internal revenue agencies. Eldorado, established in April 1990, investigates money laundering in general. Fifty of its agents dedicate their time just to 47 Street. "It is work that demands tremendous manpower," said Robert Van Attan, an Eldorado officer, "since the money has to be monitored along the length and breadth of the continent, sometimes also abroad." The target of the Eldorado agents is money, and money alone. They are not interested in drug imports, drug deals or drug dealers. "We want to put our hands on the money - to hit their pockets", say members of the unit.

The task is difficult. In America there is no law that prohibits possessing money. On the other hand, when a large amount of cash is found in the possession of a launderer, the agents confiscate the money. If the person can prove that the source of the money was legitimate, he gets it back. That does not happen. The launderers are experienced: When one of them is caught and several million dollars are found in his possession, he willingly hands over the money, but asks for a receipt. "The money is not mine, I want you to confirm that you took it," is the common request. Incidently, their lives depend on that receipt. It is not a simple matter to trail them. The eyes of a typical launderer are glued to his rear-view mirror. He makes sudden stops, moves from one lane to another, chooses long and twisted routes from one place to another. Eldorado has an answer: The investigators follow their targets with eight, ten, sometimes 12 vehicles. If necessary they use one or two helicopters. There is also sophisticated equipment, the wonders of American technology in the fields of tapping surveillance and code-breaking. In the first two years of its operations, Eldorado captured 60 million dollars and arrested 120 launderers. Compared to the scope of overall laundering, that is peanuts. "That is not the point," say the Eldorado agents "Obviously, it is impossible, with the existing legal restrictions, to put an end to the phenomenon. Our warfare is psychological." Incidentally, Eldorado is not the only agency combating money laundering The DEA, the American Drug Enforcement Agency, and the FBI, also conduct lively activity in that field. Not always is that activity coordinated.

In recent months the Eldorado agents discovered a new center of operations. It is termed The Cocaine Triangle. Its sides are: Colombian drug barons, Israeli-Jewish money launderers, and Jewish-Russian mafiosi. The Colombians funnel the money, the Israelis launder it, the Russian mafiosi (who have recently overrun New York in droves), provide the security and the muscle. A New York journalist recently told "Ma'ariv"; "The Israeli Jews are gaining notoriety in the money laundering market. You need only look at the list of arrests and the indictments of the past 3 years, in order to grasp the enormous scope of Israeli involvement in that field."

One reason for the growing power of the Jews in the drug money laundering business is the Law of Return with its easy possibility of escape to Israel. In May 1993, five members of Jewish international laundering which had worked with the Kali cartel were arrested. The ring was exposed following an FBI 'sting' operation, in the framework of which it established a dummy corporation called Prism, which served the gang for laundering money. In the course of less than one year, $225 million were laundered through the company. The head of the ring was an Israeli named Zion Ya'akov Evenheim, known as 'Zero'. Evenheim, who had a dual Israeli and Colombian citizenship, stayed in Kali, from where he coordinated the activity and supervised the transfers of money. Most of the ring's members were arrested in May 1993. Evenheim was arrested by Interpol in Switzerland and extradited to the US. He is cooperating with the FBI. Additional Israeli detainees: Raymond Shoshana, 38, Daniella Levi, 30, Binyamin Hazon, Meir Ochayon, 33, Alex Ajami, 34. Many other suspects, to whom we will later return, escaped to Israel, and there are difficulties in extraditing them to the US. In the course of the investigation, FBI agents recorded hundreds of hours of conversations in Hebrew among the Israeli suspects. For the purpose of translating the material, they employed, among others, Neil Elefant, a Jewish resident of New Jersey who had lived in Israel for some time and who spoke fluent Hebrew. Elefant translated and translated, until one day in May 1992 he was amazed to discover among the speakers a friend, Jack Zbeida, a Jewish antique dealer from Brooklyn. Elefant was in a difficult dilemma. He approached his rabbi, Elazar Teitz, who told him that his religious duty is to warn Zbeida. Elefant then secretly met Zbeida and told him that he was targeted by the FBI. Alex Ajami, an Israeli Jew who was one the heads of the gang, was also present. Zbeida and Ajami hurried to the FBI offering to cooperate, turning in Elefant, who was arrested and charged with interfering with legal procedures. He argued that one of the reasons for his decision to warn Zbeida was the zealousness, almost approaching anti-Semitism, which he found among the FBI agents trying to involve State of Israel in drug affairs. Judge Kevin Duffy sentenced Elefant to 18 months imprisonment. In the meantime the FBI was forced to hurriedly arrest all those involved in the affair. In spite of the hurry, many involved Israeli Jews fled to Israel. Some few of the tens of Israeli and American Jews who fled on this occasion to Israel are: Raymond Shoshana, Adi Tal, David Va'anunu, his nephew Yishai Vanunu, Ya'akov Cohen. Most of them came out of the affair with a lot of money which they also took to Israel. The Americans know that the chances of any one of them being extradited to the US are close to nil.

The story of Adi Tal is worthy of elaboration. He is an impressive youth, handsome, with a good record in the army, a son of a fine Israeli family, formerly a security guard at El-Al. All that did not hinder Tal from becoming involved in laundering drug money. In March 1988 the American authorities arrested 11 members of the laundering ring, including Tal and his good friend, also an Israeli, Nir Goldstein. The investigators at the time said that Tal and his friends had operated cautiously, used aliases and codes and lived in constant fear. They would receive large amounts of money from Colombian couriers, divide the money into sums of less than 10,000 dollars (any amount over 10,000 dollars that is deposited in an American bank requires a report), deposit the sums in banks and convert them into travelers checks which they sent, by means of international couriers, to a dummy corporation in Panama. The most popular code which Tal's gang used was taken from the diamond industry. When information was transmitted about the transfer of a diamond of 304 carats, it meant the sum of $30,400. Tal worked for the money launderer of the Kali cartel, Jose Satro. The Colombians constantly pressured him to increase the scope of the laundering. Tal was afraid "He lived in constant fear, his bags were always packed and he was prepared to flee at any minute to Israel", one investigator said.

An important member of Tal's laundering ring was Rabbi Shalom Leviatan, a Lubavitch Hassid, head of the branch in Seattle. It is assumed that all the considerable political power of these Hassids and of their rebbe (then alive), were exerted in favor of that laundering ring. "My intentions were good," Leviatan said after he was captured. "A person learns from experience", he added. According to him, he did not know that he was laundering drug money, and he was certain that he helps Iranian Jews trying to smuggle their money out of Iran. Leviatan got out cheaply and was sentenced to 30 days community service. Tal, who confessed to laundering $10 million, was sentenced to 52 months imprisonment. He served his sentence at Danbury jail in Connecticut, but did not learn his lesson. When he was released, he joined a gang which was captured in the FBI's 'sting' operation. This time he managed to flee to Israel where he apparently remains to this day.

The gold and diamond industry has recently become the favorite of the drug barons, due to the numerous possibilities for laundering which it contains. One of the popular methods is laundering by means of trading in gold. This is how it works: the drug money is converted into gold, which is smuggled to Colombia, from where it is exported to Milano and used to make jewelry which then legitimately returns to 47 Street. "The funniest thing in this business", say the investigators, "is that the jewelry comes here under favored import conditions because the gold seemingly originates from Colombia, and that state has favored trade conditions with the US." There are also other methods: Drug money is deposited in the accounts of diamond merchants as though it were their profits and is later transferred to Colombia. Sophisticated diamond deals are made between various parties with the aim of 'releasing' large amounts of money on the side. Sums of less than $10,000 are deposited in various bank accounts, converted into travelers' checks and are then transported to their final destination. But in spite of the ingenuity, undoubtedly one of the most popular and successful ways to launder money is through Jewish religious institutions, such as yeshivas and synagogues. Since the majority of the 47 Street gold and diamond merchants are religious Jews the process is made easier. The Jewish religious institutions badly need funds. The Colombian drug traders can be generous. They transfer their drug money "US donations", which go to the Jewish religious institutions one way and come out the other way back to the donors. On the way, the synagogue or yeshiva obtains a respectable percentage for its pious uses. Everyone is happy: the drug barons who launder their money quickly and efficiently and the synagogue or yeshiva which makes easy money.

The first laundering operation in which a Jewish institute in New York was involved was exposed already in 1984. A ring which laundered about $23 million while making a profit of $2 million operated at the oldest yeshiva in the city, "Tifereth Yerushalayim", located in Manhattan. The laundering was performed for the Kali cartel. The contact man was David Va'anunu, mentioned in the context of the Prism affair, who worked with the cartel's major launderer, Jose Sairo. The yeshiva's representative was a very pious Hassid, Mendel Goldenberger who daily received cash from Va'anunu and deposited the money in the yeshiva's accounts. Goldenberger, who claimed not to have known the source of the money, was convicted of forging bank documents and given five years suspended imprisonment. Vanunu was convicted, sentenced to eight years imprisonment but released much earlier after he became an informer for the DEA. Later, as was stated, he ran into trouble again and fled the US. Nine persons were convicted in that affair, including Rabbi Israel Eidelman, Vice President of the yeshiva, and some of its dignitaries. Tiferet Yerushalayim faced financial difficulties at that time. Its leaders attempted to maintain the number of students by paying them from the laundered drug profits.

That phenomenon, incidentally, is very common among the New York Jews. Many Jewish congregations are dying out because their members are leaving the city or their former neighborhoods. Thus, they are losing their sources of income and facing large debts. In that situation the road is short for the synagogue or yeshiva to launder drug money as a pious duty, since it means easy money, and lots of it. "Laundering money is extremely beneficial to the yeshivas and other Jewish religious institutions", said a source close to the investigation. "They are in a difficult situation and therefore they turn a blind eye to the drug problem. They don't ask what the source of the money is as long as it keeps coming in." The attitude of the pious Jewish community, according to the same source, is: "Drugs are sold anyway. As long as it does not harm our own community and only does good for it, it doesn't matter if we benefit from drug trade." The role of Israel is, in many cases, to make the connection between the religious Jewish communities of New York and the Colombians.

The Colombians are more satisfied with this method of laundering than with any other because, for political reasons, it is a relatively secure way which could be assumed initially not to be forcibly investigated by the US authorities. Only in July 1990 the situation began to change. The Federal authorities renewed an investigation of some of Williamsburg's Hassids, owners of jewelry shops on 47 Street, who were suspected of laundering drug money. The investigation focused on brothers Naftali, Miklosh and Yitzhak Shlesinger, and on Ya'akov Shlesinger (Naftali's son) and Milon Jakoby his nephew. The investigators found evidence of close connections between the Shlesingers and the Andonian brothers, members of a Colombian family accused of laundering almost one billion dollars. The Shlesingers were suspected of laundering money by means of a subsidiary called Bali, through checks drawn from the account of "Camp Yereim" ["Camp of the Pious"] - a Hassidic summer camp in the Catskills. Camp Yereim denies any connection with those checks. On April 7 of this year, Rabbi Abraham Lau, a prominent Hassid from "Magen Abraham" synagogue in Los Angeles was convicted of conspiring to launder drug money. Lau is married to the niece of the Satmar Rebbe, Moshe Teitlebaum who wields enormous political influence in New York State. Unfortunately, Lau told an undercover FBI agent about a "sacred network" of Satmar Hassids in which other Orthodox Jews had also participated. The "sacred network", whose membership was strictly limited to pious Jews, operated in the 47 Street area in New York and was capable of laundering up to $5 million weekly, thanks to its widespread contacts with Jewish charitable institutions.

Unfortunately, law enforcement agents in New York do not believe that the "sacred network" and the many other Jewish laundering rings have any sanctity. In the past year the Federal activity concerning Israelis and Jews on 47 Street has greatly increased. The investigators now employ the services of many Hebrew translators since the rings, even if composed of native American Jews, employ only "the sacred language" (i.e. Hebrew] for their operations. Aharon Sharir is, undoubtedly, the major Israeli launderer. He was born in Iraq about 45 years ago, immigrated to Israel with his family at the age of one year, graduated from an Israeli high school, served with distinction in the army and became an expert in fixing delicate mechanical instruments used to mend gold jewelry. In 1979, Sharir came to New York on a tourist visa with $6,000 in his pocket. He went into the gold business, established a small plant for manufacturing gold jewelry and did well. Then, through another Israeli diamond trader, he discovered the laundering business. Sharir reached a laundering scope of about $160,000 per day, six days per week (laundering is not done on the Sabbath), but in 1985 his wings were clipped when he was accused of having swindled a New York bank to the tune of $3 million. He quickly returned the money and was sentenced to a fine and a suspended prison sentence. In 1988 Sharir's laundering activities reached amazing heights. His gold shop on 47 Street became one of the greatest laundering centers in the entire US. "Three times a week", Sharir told the court at one of the many trials in which he is now testifying, "we received the cash. It used to arrive in canvas sacks, in cardboard boxes, or in suitcases. Sometimes there were a million dollars in one shipment." Ruy Lopez, representing the Colombian cartels would arrive from Miami equipped with a document sent from Colombia which contained detailed coded instructions about where to send the money. "Even with automatic money counting machines it was difficult to count the money"; Sharir testified. "It arrived in bills of 5, 10 and 20 dollars. The bills, most of which had been used to sniff cocaine, had a strong odor of coke - a real stink. My employees could not stand it. Every 2-3 hours they had to take a break, go out for some fresh air, so as not to get high."

Sharir's role was to see to it that the money would be transported out of the US and arrive in the bank accounts of the Colombian cartels in Panama and Colombia. For that purpose he deposited money into his bank accounts, as though it was his profits from the shop, purchased assets for the use of the drug cartels, bought and sold gold at inflated prices from merchants who were part of the conspiracy, and concealed money through various manipulations. Finally, all the money was turned into checks drawn on the accounts of Jewish religious institutions. Sharir received from the Colombians for his labors 6% of the turnover. Within a short period of time he moved with his family to a luxurious house in Woodmere, on Long Island. He purchased a luxury Jaguar car, showered his wife, Miryam, with expensive jewels, and donated lavishly to Jewish charities.

His troubles began in late 1988. In December his shop was raided by American customs and internal revenue agents, after they received notice from his banks concerning the volume of his deposits. They brought dogs to sniff out drugs, carried out a meticulous search of the offices and took away cars full of documents. Sharir did not lose his cool. While the agents were milling around his offices, he managed to conceal $600,000 which were in his bank account at the time, and transfer the money to a safe place. Simultaneously, Sharir fell out with his Colombian operators who claimed that he stole from them $26 million of drug money. Sharir, who denied the accusation, hired an Israeli professional investigator, Lihu Ichilov, to solve the mystery. Ichilov soon became Sharir's partner. He flew to Panama, established two dummy corporations there, opened bank accounts and improved the laundering routes.

Following the Federal agents' raid on his offices, Sharir did not give up. Within two weeks he opened two other offices on 47 Street and resumed work. When asked by one of his lawyers how he had expected to escape the attention of the law, Sharir replied: "I changed my system and believe that now, with God's help, I would never be caught." Sharir's new system included Rabbi Yosef Crozer whom we discussed earlier. Crozer's big mouth brought Sharir down, and he was arrested in March 1990. Crozer also led to Sharir confessing to having laundered $200 million. His wife, Miryam, was arrested together with him. Sharir, under the pressure of the interrogation agreed to cooperate in exchange for his wife's release and for the cancellation of the charges against her. The prosecution agreed.

It was an extremely good deal as far as the prosecution was concerned. For three months Sharir fed the Federal investigators with most valuable information concerning the Jewish laundering industry. The information included names, methods of operation, codes, and bank accounts. Sharir led them to the exposure of what is termed the new "cocaine triangle". He led to the incrimination of more than 35 Jewish launderers, the capture of $10 million and the break-up of numerous Jewish laundry rings. Among others, Sharir incriminated the biggest laundering shark in the history of the US, Stephan Scorkia Sharir, who testified at his trial, which directly led to his conviction. Scorkia was charged with laundering $300 million, and was sentenced to 660 years imprisonment.

Sharir is now enrolled in the US witness protection program. He lives under an assumed identity, released on bail, travels under heavy security between New York, Rhode Island, Arizona and other states, testifies in criminal trials and goes on. His wife, Miryam divorced him shortly after the affair erupted She refuses to comment on the matter and told Daily News; "I have no intention of talking. I divorced Aharon in order to distance myself from him and from his friends, and that is exactly what I am doing." Sharir was directly responsible for the flight of at least 35 Colombians from the US back to Colombia. One of the escapees was Duvan Arbolda, one of the Kali cartel's major launderers. Arbolda was charged in a Manhattan court of laundering on a vast scale, following Sharir's testimony. When he completes testifying, Sharir himself will stand trial. The prosecution will agree to a very low sentence, but this does not improve his chances of survival. "At present, Aharon Sharir heads the Kali cartel's wanted list" said an American customs official. Charges have also been served against Lihu Ichilov, Sharir's partner. However, Ichilov fled to Israel on the eve of his trial, in January 1991. That was the period of the Gulf War, and the judge, Richard Owen, who tried Ichilov in absentia, said: "Mr Ichilov apparently prefers to face the horror of Scud missiles falling on Israel than the American justice system."

Note 1 The Satmar Hassidic sect fiercely opposes Zionism. The present rabbi's uncle and predecessor (the position of a rabbi among the Hassids is limited to the members of "the sacred family"), Yoel Taitelbaum, had published learned books in which Zionism was described as an invention of Satan. Israeli victories (especially the one in the Six Day War) were attributed solely to the direct Satanic help given to the Israeli army, while the Holocaust was being "justified" as the Divine punishment of the Jews for the sin of some of them becoming Zionists. The present rabbi, although formally continuing the teachings of his uncle, has the most amicable relations with the Israeli government.

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