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Laundering drug proceeds in the North Florida HIDTA region typically involves the transportation of bulk currency from the region to the Southwest Border and southern Florida. Mexican DTOs and Hispanic criminal groups are the primary transporters of bulk currency, typically using the same private and commercial vehicles used to transport drugs into the area. Colombian DTOs use Colombian and Dominican criminal groups to transport bulk currency to money laundering cells in southern Florida that use financial institutions and other methods, such as the Colombian Black Market Peso Exchange (BMPE), to launder drug proceeds.17
Traffickers operating in the North Florida HIDTA region also launder money 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, auto dealerships, and hair salons. For instance, Cuban DTOs frequently reinvest drug profits in real estate in order to expand their production of high-potency indoor marijuana in the region. Retail-level distributors in the HIDTA region typically use their drug proceeds to purchase tangible items such as real estate, vehicles, and jewelry. Moreover, some criminal groups and street gangs are investing in upstart record labels and recording studios.
The distribution and abuse of powder and crack cocaine will remain the primary drug threat in the North Florida HIDTA region. Demand for cocaine is strong, and Mexican DTOs are able to supply sufficient quantities to meet this demand. Levels of cocaine distribution and abuse in the region will most likely remain high or will increase, resulting in additional expenditures of law enforcement and public health resources to mitigate the associated violent and property crime and to pay for publicly funded treatment programs for cocaine abuse.
The dominance that Mexican DTOs exert over wholesale cocaine, heroin, marijuana, and ice methamphetamine distribution in the North Florida HIDTA region is unlikely to be challenged by other DTOs in the near term. As the Hispanic population in the region expands, Mexican traffickers will assimilate into these communities and easily mask their drug distribution operations. In fact, Mexican DTOs may become more entrenched in the North Florida HIDTA region, and these traffickers may continue to expand their distribution operations into Florida as they gain additional market exposure.
The number and size of indoor cannabis grows will quite likely increase during the next year as Cuban DTOs and other local producers seek to profit from the rising demand for high-potency marijuana in the North Florida HIDTA region. Moreover, an abundance of low-cost real estate available in the region as a result of declining economic factors will quite likely provide marijuana producers with increased potential for expansion of their indoor grow operations.
17. The Colombian Black Market Peso Exchange (BMPE) system originated in the 1960s, when the Colombian Government banned the U.S. dollar with the intention of increasing the value of the Colombian peso and boosting the Colombian economy. The government also imposed high tariffs on imported U.S. goods, hoping to increase the demand for Colombia-produced goods. However, this situation created a black market for Colombian merchants 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.
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