To
Contents
To Previous Page
To Next Page
To Publications Page
To Home Page
National Drug Intelligence
Center |
DTOs in the PC HIDTA use various money laundering methods to conceal and move illicit funds. Common methods employed by traffickers to launder their illicit proceeds include smuggling bulk cash; using money services businesses (MSBs); conducting electronic wire transfers; structuring bank deposits and money order purchases; commingling drug proceeds with funds generated through legitimate businesses; purchasing real estate and vehicles; operating front businesses; and using smart cards, automated teller machines (ATMs), and prepaid stored value cards. Bulk cash smuggling is the money laundering method most often cited by law enforcement in the PC HIDTA. Law enforcement reporting indicates a decrease in the use of traditional financial institutions by traffickers to launder illicit drug proceeds because the traffickers have become aware that banking officials are readily identifying illicit financial activity through Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs). Additionally, some DTOs are beginning to launder drug proceeds through newly established casinos in Pennsylvania.
Colombian, Dominican, and Mexican DTOs and criminal groups typically transport drug proceeds in bulk from the PC HIDTA region to New York City, the Southwest Border area, Mexico, or other drug source locations. They often conceal bulk quantities of cash in hidden compartments of vehicles or in shipments of commodities such as furniture, car parts, electronics, or produce. These traffickers also use freight transportation companies, motor carriers, and shipping containers to transport bulk currency.
Colombian, Dominican, and Mexican DTOs also use U.S.-based MSBs--particularly money transmittal and check-cashing businesses--to launder proceeds, frequently in conjunction with bulk cash smuggling. Mexican DTOs often wire structured amounts to collection points along the Southwest Border, where the electronic wires are cashed and the money is smuggled to Mexico. These DTOs also send significant amounts of money through MSBs to Colombia, the Dominican Republic, and various locations in Central and South America.
Colombian DTOs use prepaid credit cards to launder drug proceeds in the HIDTA region. They use illicit funds to purchase prepaid credit cards that are generally redeemed in Colombia for pesos. Some DTOs consider this method to be preferable to the Black Market Peso Exchange (BMPE)3 because it involves a lower exchange rate.
Many DTOs in the HIDTA region, particularly Dominican and Asian organizations, transport drug proceeds to Atlantic City, New Jersey, where they launder the funds through casinos. Some DTOs are increasingly transporting drug proceeds to Pennsylvania's new casinos in Bensalem and Chester. These DTOs purchase betting chips with large amounts of drug proceeds, pass some time in the casino, and then exchange their chips for cash.
Some traffickers in the region, particularly Asian DTOs and criminal groups, also use cash-intensive businesses to launder illicit drug proceeds in the region. Businesses such as auto repair shops, beauty and nail salons, car washes, construction companies, tattoo parlors, and travel agencies are used by traffickers to conceal illicit drug funds among seemingly legitimate daily cash transactions.
Retail-level drug dealers in the PC HIDTA region often launder drug proceeds through the purchase of consumer goods, such as expensive jewelry and luxury vehicles, and through the purchase of real estate.
3. The Black Market Peso Exchange (BMPE) is a system in which Colombian traffickers receive Colombian pesos in Colombia in exchange for U.S. dollars in the United States. Peso brokers facilitate this process by selling Colombian trafficker-owned U.S. dollars located in the United States at a discount to Colombian merchants, who use the funds to purchase U.S. goods.
To Top To Contents To Previous Page To Next Page
To Publications Page To Home Page
End of page.