Law enforcement agents arrested 88 people and seized nine tons of cocaine and $52 million in cash and assets during a five-nation investigation that they said successfully penetrated the money-laundering operations of the Cali drug cartel in Colombia.

With approval from the British government, U.S. Drug Enforcement Administration and Internal Revenue Service agents for the first time created an offshore private bank ostensibly serving wealthy individuals.Drug Enforcement Administrator Thomas Constantine said Friday that Cali drug lords ultimately trusted the bank, which was actually an electronic facility for moving money rather than a physical location, to launder their profits from drug trafficking.

Begun in January 1992, "Operation Dinero" was described by a dozen U.S. and foreign officials Friday at a news conference at drug enforcement headquarters in suburban Virginia. The agency showed a color videotape with some highlights of agents in action during the undercover operation.

Constantine said the investigation "demonstrates concretely that an international organization, including Italian organized crime figures, of people trafficking in cocaine is directed out of Cali, Colombia.

"This is the first time we've ever gotten to the level of operating a secret offshore bank that they felt very comfortable with," he added.

IRS agents were used to manage the bank's complicated electronic transfers of money and IRS Commissioner Margaret M. Richardson said, "Operating the bank gave us a glimpse at the magnitude of international money laundering."

In the future, she said, money launderers operating in tax-haven countries will have to ask themselves whether they are dealing with "a bank or the IRS. If it's the IRS, we are offering terms of 20 years - and with no interest."

Constantine said the drug traffickers discussed laundering as much as $500 million through the bank, which was ostensibly located in Anguilla, British West Indies, but only came through with a small portion of that before arrests and seizures began.

DEA officials said in two years they laundered $39 million in drug profits through a variety of means for the cartel and more than $8 million in additional cash through the bank.

Among the $52 million in cash and asset seizures were three original paintings, which were seized in the United States. They were Picasso's "Head of a Beggar," Ruben's "St. Paul" and a Reynolds portrait of a man whose identity drug agents did not know.