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U.S. Department of Justice
National Drug Intelligence Center
South Florida HIDTA Drug Market Analysis 2010
May 2010
Abuse of cocaine, marijuana, methamphetamine, and other drugs remained relatively unchanged in 2009 throughout most of the South Florida HIDTA region. The CSPSA reports that cocaine abuse appears to be entering a declining phase in Broward and Miami-Dade Counties. Moreover, treatment providers report that many drug abusers in the area are opportunistic, switching from one drug to another, depending on price and availability.
Some opioid abusers use prescription opioids or heroin, depending on availability and the price of each drug. Treatment providers report that some prescription opioid abusers are switching to heroin because heroin is less costly or more available in some areas than prescription opioids. For example, successful efforts to shut down some pain management clinics in the region made some prescription opioids harder to obtain, causing abusers to switch to heroin. According to CSPSA, an opiate epidemic involving opioid pain relievers and heroin looms on the horizon for the new decade in Broward and Miami-Dade Counties. In addition, Florida medical examiner data indicate that the number of deaths associated with heroin, used alone or with other drugs, increased from 40 in 2007 to 63 in 2008, and that prescription drugs were present or found to be a causal factor in deaths more often than other illicit drugs in 2008 (the latest full year that data are available).
The South Florida HIDTA region is a major venue for laundering and moving billions of dollars in illicit drug proceeds, particularly through the Colombian BMPE and bulk cash smuggling. Colombian DTOs are the primary money launderers in the region. They routinely launder illicit drug proceeds through the BMPE by exploiting businesses such as local financial institutions, money remittance businesses, shell corporations, and computer exporters.
Traffickers and money laundering facilitators use various other methods to launder drug proceeds in the South Florida HIDTA region. Some money laundering facilitators use the black market in Venezuela to launder illicit drug proceeds in a system similar to the Colombian BMPE. Facilitators also launder money through mortgage fraud, unabated despite the decline in the housing market. In addition, traffickers launder illicit proceeds by purchasing real estate and luxury items, using money services businesses, structuring bank deposits, commingling drug proceeds with revenue generated by cash-intensive front businesses such as auto repair shops and dealerships, hair salons, and increasingly, using prepaid (stored value) cards (see text box).
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Prepaid Cards The use of prepaid cards by drug traffickers is a growing concern for law enforcement agencies in the South Florida HIDTA region. According to NDTS 2010 data, 15 out of 40 law enforcement agency respondents in the South Florida HIDTA region report that money laundering occurs by means of prepaid cards in their jurisdictions. Prepaid cards are payment mechanisms that allow cardholders to access global credit and debit payment networks without forming a traditional accountholder relationship with a depository institution, and to obtain the cards using stolen or fraudulent identities. These factors create a functional anonymity that could enable money launderers to engage in transactions that were previously available only to identified customers with traditional banking relationships. South Florida HIDTA investigators report that prepaid cards are used in connection with bulk cash smuggling and suspect that they are used to purchase goods within the BMPE system. Traffickers can also pay workers, members, or associates by loading prepaid cards with money in the name of fictitious employees through front companies, thereby avoiding traditional bank accounts. Absent regulatory requirements for prepaid cards, the true extent of their use in money laundering remains an intelligence gap. |
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