Attorney General Dick Thornburgh Wednesday announced the arrest of 127 people in an investigation he said smashed a billion-dollar international money-laundering ring with links to the Medellin drug cartel of Colombia.

Thornburgh called it "the largest money-laundering crackdown ever carried out by the federal government."Authorities seized a half-ton of cocaine and $45 million in cash, jewelry and real estate, and have identified more assets for potential seizure, he said.

"There is no more effective way to deal with the business of drug trafficking than to take the profit out of it. That's what has happened with Operation Polar Cap," Thornburgh said at a news conference.

Federal authorities also obtained conspiracy indictments against two South American banks, Banco de Occidente of Panama and Banco de Occidente of Colombia, on charges they were involved in laundering more than $1 billion in drug proceeds generated in the United States.

Appearing with Thornburgh was FBI Director William Sessions, Drug Enforcement Administrator John Lawn and other federal authorities. Lawn said the sophisticated and complicated money-laundering operation laundered $1.2 billion in two years.

Thornburgh called it "a very hostile takeover of a major money-laundering operation."

Lawn said federal investigators in Atlanta were told by drug-world leaders that the money-laundering scheme they were operating undercover was processing the money too slowly and described a faster Los Angeles-based operation that could launder their money in 48 hours.

He said it was called "La Mina," or "The Mine," and that authorities began investigating that operation. He said it involved transfers of drug proceeds and laundered money through several cities and Panama, Colombia and Uruguay.

Federal agents were seizing accounts at banks in Atlanta, Miami, New York and San Francisco, and additional arrests were expected in New York, Los Angeles and Miami, the department said.