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Colombian DTOs are the primary money launderers in the South Florida HIDTA region. They routinely launder illicit drug proceeds through local financial institutions, money remittance businesses, shell corporations, and the Colombian Black Market Peso Exchange (BMPE). Law enforcement officials report that Colombian money launderers send an estimated $5 to $15 billion in illicit drug proceeds from the United States to Colombia annually, a large percentage of which passes through Florida. Moreover, DEA Miami Division reports that Mexican DTOs also are increasingly using a version of the BMPE to launder their drug proceeds.
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The Colombian Black Market Peso Exchange (BMPE) system
originated in the 1960s, when the Colombian Government banned the U.S. dollar,
intending to increase the value of the Colombian peso and boost the Colombian
economy. The government also imposed high tariffs on imported U.S. goods, hoping
to increase the demand for Colombian-produced goods. However, this situation
created a black market for Colombian merchants who were seeking U.S. goods and
cheaper U.S. dollars. Those merchants possessed Colombian pesos in Colombia but
wanted cheaper U.S. dollars (purchased under official exchange rates) in the
United States to purchase goods to sell on the black market. Colombian
traffickers had U.S. dollars in the United States--from the sale of illicit
drugs--but needed Colombian pesos in Colombia. Consequently, peso brokers began
to facilitate the transfer of U.S. drug proceeds to Colombian merchants, and
business agreements were forged enabling those Colombian merchants to purchase
U.S. dollars from traffickers in exchange for Colombian pesos. Although the ban
on possession of U.S. dollars was later lifted, the black market system became
ingrained in the Colombian economy, and Colombian drug traffickers continue to
rely on this system to launder their U.S. drug proceeds. |
Law enforcement officials further report that traffickers are increasingly smuggling bulk cash from the South Florida HIDTA region, in part because they fear increased law enforcement scrutiny and detection, particularly under the USA PATRIOT Act.12 Traffickers typically smuggle bulk cash from the region by couriers aboard maritime and air conveyances to countries in the Caribbean and to South America; they also transport bulk cash by private and commercial vehicle overland to Mexico. To this end, DEA Miami Division reports that Mexican DTOs are more frequently transporting bulk currency from the region to southwestern states and Mexico concealed in private vehicles.
Traffickers operating in the South Florida HIDTA region also launder illicit proceeds through other means, including purchasing real estate and luxury items, using money services businesses, structuring bank deposits, and commingling drug proceeds with revenue generated by cash-intensive businesses such as auto repair shops, dealerships, and hair salons. Additionally, some criminal groups and street gangs are investing in startup record labels and recording studios. To illustrate, two Miami residents were sentenced in federal court to 30 years' imprisonment in March 2008 for distributing cocaine and money laundering. These individuals used a variety of methods to launder their illicit drug proceeds, including mortgage fraud, and front businesses such as a coin laundry, a fast food franchise, and a record label.
The distribution and abuse of powder and crack cocaine will remain the primary drug threats in the South Florida HIDTA region. Demand for cocaine is strong, and Colombian DTOs are able to supply sufficient quantities to meet this demand. Stable levels of cocaine distribution and abuse in the region will cause the continued expenditure of limited law enforcement and public health resources to counter the violent and property crime occasioned by cocaine trafficking and to fund cocaine treatment programs.
Indoor cannabis cultivation will increase in the South Florida HIDTA region. Cuban growers will expand their high-potency cannabis cultivation operations to meet increasing demand for the drug in the region and the southeastern United States.
Heroin abuse will probably increase in the South Florida HIDTA region, particularly among Caucasian abusers who switch to the drug from prescription narcotic abuse. As a result, the consequences associated with heroin abuse in the region, including associated crime and treatment costs, will increase in the HIDTA region.
The South Florida HIDTA region will remain a source of diverted pharmaceutical drugs to areas of the eastern United States because of diversion networks established by distributors in South Florida. Pain management clinics and, possibly, Internet pharmacies operating in South Florida will further complicate this situation.
12. Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (commonly known as the USA PATRIOT Act or, simply, the Patriot Act), was signed into law on October 26, 2001.
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