National Drug Intelligence Center   California Border Alliance Group Drug Market Analysis 2009   March 2009

Abuse

Illicit drug abuse is prevalent throughout the CBAG region because of the area's sizeable abuser population and steady supply of illicit drugs from Mexico. According to the San Diego Association of Governments (SANDAG) Substance Abuse Monitoring (SAM) program, marijuana is the most abused and readily available drug in the region; approximately four out of every five arrestees in San Diego County report having used marijuana at some time in their life.7 In 2007 (the latest year for which data are available), 54 percent of male arrestees and 63 percent of female arrestees reported that they had used methamphetamine at least once in their lifetime, making it the second most commonly used illicit drug among San Diego County arrestees. According to SAM data, the typical abuser smokes methamphetamine (77% of all abusers), as opposed to snorting it (14%) or injecting it (9%). SAM data further reveal that heroin and cocaine abuse are stable at high levels. Abuse of ODDs and diverted CPDs, although significant, poses a less significant threat than the abuse of other illicit drugs. SAM data also indicate that age is a factor in the drug choice of arrestees; for example, arrestees 18 to 24 years of age were significantly more likely to test positive for marijuana, those 25 to 39 were more likely to test positive for methamphetamine, and those 40 and older were more likely to test positive for cocaine, compared with the other age groups. (See Figure 2.)

Figure 2. Positive Drug Test Results Among Arrestees in San Diego County, by Age, 2007

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Source: San Diego Association of Governments, Criminal Justice Research Division, Substance Abuse Monitoring Program, August 2008.

Treatment admission data indicate that methamphetamine abuse is a significant problem in San Diego County, accounting for 49 percent of all primary drug treatment admissions (excluding those for alcohol), followed by heroin (22%) and marijuana (17%). The San Diego County Health and Human Services Agency reports that opiates (including heroin) account for the largest number of emergency room and hospital visits involving drug dependence.

Young adults in the CBAG region are increasingly abusing OxyContin. They are ingesting the drug through an unusual method in which the OxyContin tablet is placed in the mouth until the coating is dissolved; the tablet is then removed from the mouth, crushed, and placed on folded aluminum foil, which is heated, creating smoke vapors that are inhaled. Once addicted to OxyContin, many of these young adults begin abusing heroin because it is typically cheaper and easier to obtain and provides a more intense high.

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Illicit Finance

Bulk cash smuggling to Mexico is the primary method used by traffickers to move drug proceeds from the CBAG region to Mexico, largely because of the area's proximity to the U.S.-Mexico border, limited inspections of southbound traffic by U.S. and Mexican law enforcement officers, and the relative ease with which cash can be placed into Mexican financial systems. Traffickers, predominantly Mexican DTOs, typically smuggle bulk currency through the San Ysidro and Calexico POEs in hidden compartments within vehicles; however, some traffickers also smuggle bulk currency in commercial and private aircraft, by couriers on passenger bus lines, and by parcel carriers and express mail services.

Mexican DTOs also use the CBAG region as a consolidation point for illicit drug proceeds generated at drug markets throughout the country. Mexican traffickers either transport currency in bulk to the region or use money services businesses (MSBs) to wire funds to the area. The illicit funds are typically consolidated at stash sites in the region and eventually transported in bulk to Mexico. Once in Mexico, the funds are often deposited into a Mexican bank and/or a casa de cambio8 and then repatriated to the United States through electronic wire transfers or bulk cash transportation by armored car or courier services. Once in the United States, the illicit funds appear to be proceeds from a Mexican financial institution and are documented with a Currency or Monetary Instruments Report (CMIR),9 giving the funds the appearance of legitimacy.

Mexican DTOs also launder illicit drug proceeds in the CBAG region through money services businesses (MSBs) and wire remitters. The number of MSBs and wire transfer businesses along the border has increased noticeably in the last several years. These businesses commonly are located within grocery stores and gas stations; they accommodate the Hispanic community's personal and financial dealings with family, friends, and businesses in Mexico and Central America, but are commonly exploited by traffickers. Additionally, ICE officials report that an increasing number of traffickers in the CBAG region use illegal drug proceeds to purchase prepaid stored value cards (PSVCs) as a means of laundering drug proceeds. Traffickers purchase PSVCs in the region and openly carry them across the U.S.-Mexico border in California without fear of seizure. PSVCs provide a unique and simple money laundering method that DTOs use to smuggle profits from the United States to Mexico and also to send instant cross-border remittances.

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 to launder illicit drug proceeds. Additionally, DTOs launder their drug proceeds through the many gambling establishments controlled by Native American tribes throughout San Diego County.

Footnotes

7. Representatives from the San Diego Association of Governments (SANDAG) Substance Abuse Monitoring (SAM) program approach arrestees within 48 hours of their arrest or incarceration and ask them to answer a series of questions regarding their drug-use history.
8. Casas de cambio located in Mexico are nonbank financial institutions (currency exchangers) that provide a variety of financial services and are highly regulated by the Mexican Government.
9. Currency or Monetary Instruments Reports (CMIRs) must be filed by (a) each person who physically transports, mails, or ships or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in an aggregate amount exceeding $10,000 at one time from the United States to any place outside the United States or into the United States from any place outside the United States, and (b) Each person in the United States who receives currency or other monetary instruments in an aggregate amount exceeding $10,000 at one time that have been transported, mailed, or shipped to the person from any place outside the United States.

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