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California Border Alliance Group Drug Market Analysis
June 2007

Illicit Finance

Mexican DTOs launder illicit drug proceeds generated in the CBAG region primarily through bulk cash smuggling across the U.S.-Mexico border, typically through the San Ysidro and Calexico POEs. Mexican DTOs routinely transport cash into Mexico using the same vehicles that were used to smuggle drugs into the United States, concealing the currency in the same hidden compartments used for smuggling the drugs. These traffickers easily blend with the high volume of traffic along I-5 to transport illicit proceeds undetected. Additionally, Mexican DTOs in other areas of California and in cities throughout the country, such as Chicago, Detroit, and New York, transport illicit bulk proceeds into and through the CBAG region en route to Mexico.

Mexican DTOs also launder illicit drug proceeds in the CBAG region through money services businesses (MSBs) by electronically wiring proceeds into Mexico. Most traffickers use money exchange houses located throughout the San Ysidro and Calexico border areas, but some have begun to use the growing number of wire transfer businesses established in the region over the past several years. These businesses commonly are located in grocery stores and gas stations and accommodate the local Hispanic community's need to remit cash to Mexico and Central America.

DTOs, gangs, and independent dealers operating in the CBAG region also launder illicit proceeds through a variety of other methods. They commonly commingle illicit proceeds with funds from legitimate businesses such as automobile dealerships, retail stores, real estate companies, and restaurants. These groups or individuals also purchase high-value assets with proceeds or use underground banking services and gaming casinos to launder illicit drug proceeds.

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