Money launderers constantly evolving
The schemes used by cartel financiers are constantly evolving as authorities find new money-laundering methods and take steps to shut them down.
When Congress passed the Patriot Act in 2001, it put in place reporting requirements for cash deposits that forced money launderers, including those for Mexican cartels, to change their tactics, said Jim Dowling, managing director of the Dowling Advisory Group and former Anti-Money Laundering Advisor to the White House Drug Policy Office.
Billions of dollars that was being deposited in U.S. banks started going to Mexico before slipping into the U.S. economy, Dowling said.
“The U.S. Patriot Act made it difficult for these guys to put cash into bank accounts,” Dowling said. “So the U.S. government wasn’t looking at what was going out of the country, and the Mexican government certainly wasn’t looking at what was coming in.”
Such operations use three stages, Dowling said: placement, layering and integration.
In the placement stage, defendants in the San Antonio cases are accused of smuggling cash from drug sales in such cities as Atlanta, Houston and Las Vegas into Mexico, where it was deposited in bank accounts.
In the layering stage, prosecutors allege, the money was transferred from Mexico to bank accounts in the U.S. controlled by the accused money launderers.
And in the final stage, integration, the money was used to purchase land and open restaurants. Once the launderers have businesses, they can wash money through them, Dowling said.
“Now you don’t have to ship the money down to Mexico,” he said. “You have to pay a tax on it, but that’s a small fee for laundering money that’s clean. Now you’re at the full integration.”
Dowling, who’s worked undercover investigating money-laundering cases, said the money side of the operation is incredibly high-stakes. A mule losing a load of drugs is rarely punished. Losing a load of cash could cost a smuggler his life.
Neither the U.S. nor Mexico is doing a sufficient job of attacking the cartels’ finances, said a former U.S. law enforcement official who asked to remain anonymous for safety reasons.
“The truth is, neither government can get into those networks, so progress is slow,” he said. “Interdicting bulk cash is not attacking money laundering and getting a cash load is happenstance. Money laundering is a black hole, in large part. There are good cases, but they are far and few, compared to the amount of drug-related proceeds that are being generated.”
*Mysanantonio.com (reprinted from antimoneylaundering.us)