National Drug Intelligence Center   South Florida High Intensity Drug Trafficking Area Drug Market Analysis 2009   April 2009

Abuse

Marijuana is the illicit substance most often identified in treatment admissions to publicly funded facilities in Florida; however, the most severe drug-related societal and personal consequences are often associated with powder and crack cocaine (the second most often identified illicit substance in treatment admissions). According to data from the Substance Abuse and Mental Health Services Administration (SAMHSA) Treatment Episode Data Set (TEDS), the number of marijuana-related treatment admissions in Florida from 2003 through 2007 (the latest year for which data are available) exceeded the number of treatment admissions for the abuse of cocaine; other opiates, tranquilizers, and sedatives; heroin; or amphetamines (including methamphetamine).12 (See Table 4.) Moreover, 46.6 percent of marijuana-related treatment admissions in 2007 involved individuals between 12 and 17 years of age at the time of admission.

Table 4. Drug-Related Treatment Admissions to Publicly Funded Facilities in Florida, 2003-2007

Source: Treatment Episode Data Set, as of March 2, 2009.
* Florida changed its methodology for reporting treatment admissions to TEDS between 2004 and 2005; this resulted in a significant decline in the number of reported treatment admissions between these years. (Public health officials believe that significant duplicate admissions were taking place under the prior reporting mechanism.) As such, trend analysis cannot be conducted for years prior to 2005.

CPDs are widely available and frequently abused throughout the South Florida HIDTA region. The most widely available and commonly abused CPDs are methadone, OxyContin, Valium, Vicodin, and Xanax. Law enforcement officials in the South Florida HIDTA region report that the availability and abuse of CPDs are a significant threat because of the associated death rates. Florida Medical Examiner data reveal that the number of deaths associated with the combined class of CPDs, used either alone or with other drugs,13 exceeded the number of deaths associated with cocaine and heroin in the South Florida HIDTA region from January through June 2008 (the latest period for which such data are available). (See Table 5.)

Table 5. Drug Mentions in Deceased Persons in Broward, Dade, Monroe, and Palm Beach Counties, 2004-2008*

Source: Florida Department of Law Enforcement; Florida Medical Examiners.
* January through June 2008.

ODDs, methamphetamine, and heroin are abused at low levels throughout most of the South Florida HIDTA region. ODDs, particularly MDMA, available in the region are generally abused in combination with other substances, including alcohol, cocaine, and marijuana. MDMA is most commonly used by youths. Methamphetamine and heroin availability and abuse are stable at low levels. SA heroin is the principal type available in retail-level heroin markets in Miami.

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Illicit Finance

Colombian DTOs are the primary money launderers in the South Florida HIDTA region. They routinely launder illicit drug proceeds through local financial institutions, money remittance businesses, shell corporations, and the Colombian Black Market Peso Exchange (BMPE).14 According to law enforcement officials, Colombian DTOs launder multibillions of dollars in illicit drug proceeds through the BMPE; a large portion of import and export activity associated with this money laundering scheme takes place in Florida, particularly Miami. For instance, the New York/New Jersey High Intensity Financial Crime Area (HIFCA) analyzed thousands of transactions involving millions of dollars in BMPE activity that were wired through New York banks in the name of a money exchange business located in Uruguay and found that many of the beneficiaries of the outgoing wires were electronic or computer vendors located throughout Florida.

Drug traffickers in the South Florida HIDTA region launder illicit drug proceeds using a variety of methods. The movement of illicit drug proceeds in the region typically involves the transportation of bulk currency from the region to countries in the Caribbean and to South America using couriers aboard maritime and air conveyances; they also transport bulk cash by private and commercial vehicle overland to Mexico. Some DTOs in the region are increasingly using the black market in Venezuela to launder illicit drug proceeds; this system is similar to the Colombian BMPE. The black market is thriving in Venezuela, owing to monetary controls imposed by the Commission of Foreign Exchange Administration.15 It is unclear at this time what effect the use of the Venezuelan system will have on money laundering in the South Florida HIDTA region. Traffickers also launder illicit proceeds by 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 and dealerships and hair salons.

Footnotes

12. Treatment Episode Data Set (TEDS) data are available only at the state level; thus, the number of admissions is not limited to the South Florida HIDTA region but reflects the entire state of Florida.
13. More than one drug type may be associated with each deceased person because of mixed drug toxicities.
14. The Colombian Black Market Peso Exchange (BMPE) system originated in the 1960s, when the Colombian Government banned the U.S. dollar, intending to increase the value of the Colombian peso and boost the Colombian economy. The government also imposed high tariffs on imported U.S. goods, hoping to increase the demand for Colombian-produced goods. However, this situation created a black market for Colombian merchants who were 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.
15. The government of Venezuela created a special agency called the Commission of Foreign Exchange Administration (CADIVI, after the Spanish initials of Comisión de Administración de Divisas) to issue and apply foreign exchange control provisions. The CADIVI has the power to issue general regulations, called providences, on the requirements for the purchase of foreign currency, to issue or deny authorizations to purchase foreign currency, and to verify and control the use of the foreign currency, the purchase of which it has authorized from the Central Bank of Venezuela.

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