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Chicago High Intensity Drug Trafficking Area Drug Market Analysis
May 2007

Illicit Finance

Mexican DTOs and criminal groups generate hundreds of millions of dollars from the wholesale distribution of illicit drugs in the HIDTA region; Colombian DTOs and criminal groups also generate vast sums of drug money in the area. These traffickers typically transport their proceeds in bulk from Chicago to southwestern states by private and commercial vehicles and trains and, to a much lesser extent, package delivery services. They also use the Chicago area as a consolidation point for bulk currency derived from their drug distribution activities in other markets throughout the country.

Mexican and Colombian DTOs and criminal groups launder illicit proceeds through the use of money services businesses (MSBs), wire remitters, and front companies. Additionally, Colombian DTOs and criminal groups launder portions of their proceeds through the Black Market Peso Exchange (BMPE). Some Nigerian traffickers use the purchase and export of vehicles to Nigeria to launder their illicit drug proceeds.

Street gangs rarely engage in the bulk transport of drug proceeds from the HIDTA region. They typically launder drug proceeds locally through retail businesses and by purchasing real estate, automobiles, and other luxury goods. Additionally, street gang members travel to a number of different casinos in the Chicago area, gamble for short periods of time, and thereafter convert illicit funds into legitimate gambling receipts. More sophisticated gang members also engage in various mortgage fraud schemes. For example, "mortgage flipping" is a common scheme by which a gang member uses a straw purchaser in cooperation with an unscrupulous mortgage broker and appraiser to purchase property at a minimal cost and sell it at a higher value to a third party. Investigators report that millions of dollars of illicit proceeds have been laundered through this process.

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