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Midwest High Intensity Drug Trafficking Area Drug Market Analysis
May 2007

Illicit Finance

Mexican DTOs and criminal groups are the Midwest HIDTA region's principal drug money launderers. These traffickers transport cash and monetary instruments in bulk from the HIDTA to destinations in the Southwest, including El Paso, Houston, Phoenix, and Tucson, as well as to Mexico. Additionally, illicit proceeds generated in drug markets outside the HIDTA region are transported to the area, consolidated, and shipped in bulk to the southwestern United States and Mexico. Traffickers primarily transport bulk cash by private and commercial vehicles that often are equipped with hidden compartments. Mexican DTOs and criminal groups also use money services businesses (MSBs) such as money remitters and check-cashing firms to launder drug proceeds. These traffickers also purchase expensive items, including jewelry and luxury vehicles, and acquire cash-intensive businesses such as bars, jewelry stores, restaurants, and used car lots that they use to mask illicit proceeds by commingling them with funds generated at the businesses. Retail-level traffickers also use small, cash-intensive front businesses to commingle illicit proceeds with legitimate funds; they also purchase vehicles, luxury items, and businesses with drug proceeds.

A money laundering trend involving the acquisition of real estate is developing among local retail-level traffickers in Missouri and Kansas. The local traffickers purchase dilapidated private homes with drug proceeds, make cosmetic improvements, and then claim that extensive repairs were made to the homes in order to resell them at inflated prices to unsuspecting purchasers. The drug proceeds are hidden in the fictitious repairs and commingled with the profits from the sale.


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