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National Drug Intelligence
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Illicit drug proceeds generated in the NE HIDTA region typically are laundered by traffickers through bulk cash and monetary instrument smuggling, money services businesses (MSBs), depository institutions, front companies, casinos, securities and futures instruments, and the purchase of real property and expensive consumer goods. Wholesale-level traffickers transport drug proceeds in bulk, either in the form of cash (U.S. and foreign currency) or monetary instruments, to Canada or Mexico for eventual repatriation; they generally transport the proceeds in private vehicles or tractor-trailers.
They also transport bulk proceeds to New York City to be combined with other drug proceeds for eventual transport to southwestern states, Mexico, South America, or the Dominican Republic. Traffickers also ship drug proceeds through the mail, via package delivery services, and aboard commercial aircraft. Wholesale-level traffickers operating in the HIDTA region use personal and business accounts to launder drug proceeds through depository institutions, a segment of the New England financial industry that ranked second in the number of Suspicious Activity Reports (SARs) filed from 2003 through 2007. For example, investigators in Rhode Island who were targeting steroid and HGH distributors seized nearly $3.6 million in 2007 from a DTO that used branches of Chinese banks in New York to launder drug proceeds. Wholesale-level traffickers also launder drug proceeds through MSBs, typically by electronic wire transfers of funds to associates outside the HIDTA region or to domestic and international bank accounts owned by the trafficker or money brokers. MSBs ranked first in the number of SARs filed by the New England financial industry from 2003 through 2007.
Midlevel and retail traffickers operating in the region often launder proceeds by commingling them with legitimate funds generated in cash-intensive area businesses such as clothing, music, and convenience stores; restaurants; tanning and nail salons; and travel agencies. Additionally, retail drug distributors often purchase real estate, expensive clothing, jewelry, high-end consumer electronics, and automobiles with the proceeds from illegal drug sales.
Mexican DTOs will most likely further expand their drug distribution operations in the HIDTA region over the next year; they will inevitably serve a greater role in the wholesale distribution of heroin, cocaine, marijuana, and ice methamphetamine in New England. They may capitalize on any future cocaine shortages in New England by introducing larger supplies of ice methamphetamine into the region as an alternative stimulant.
Heroin abuse will remain a primary drug threat to the NE HIDTA region over the next year. SA heroin will remain widely available and abused and may become an even greater threat if street-level prices further decline. Additionally, the availability of Southwest Asian (SWA) heroin in the region may increase if heroin demand escalates. Canadian law enforcement officials report that SWA heroin has replaced Southeast Asian heroin as the primary type of the drug available in Canada. SWA heroin traffickers may be inclined to smuggle a portion of their supplies to the HIDTA region to meet increasing heroin demand, given the region's proximity to Canada.
More prescription narcotics abusers will switch to heroin use, attracted by the drug's lower cost and higher potency; as a result, heroin-related treatment admissions will quite likely increase throughout the region.
Canada-based Asian DTOs that supply distributors operating in the NE HIDTA region will pose a growing threat as they expand their high-potency marijuana and synthetic drug distribution networks. These groups will most likely use well-established marijuana distribution networks to attempt to introduce larger quantities of synthetic drugs into the region.
The level of violence occurring among street gangs competing for drug distribution territory in New England is likely to escalate if gangs continue their recruitment of new members from middle schools and high schools; street gangs in the region will be able to work larger territories with more members.
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