Cartels' cash flows across border

U.S. border and customs agents check hundreds of cars a day at the port of entry in Laredo, Tex. But many cars are waved through; 22,000 cars and 6,000 tractor-trailers cross into Mexico here every day.
U.S. border and customs agents check hundreds of cars a day at the port of entry in Laredo, Tex. But many cars are waved through; 22,000 cars and 6,000 tractor-trailers cross into Mexico here every day. (Linda Davidson)
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By William Booth and Nick Miroff
Washington Post Staff Writers
Thursday, August 26, 2010

LAREDO, TEX. -- Stashing cash in spare tires, engine transmissions and truckloads of baby diapers, couriers for Mexican drug cartels are moving tens of billions of dollars in profits south across the border each year, a river of dirty money that has overwhelmed U.S. and Mexican customs agents.

Officials said stemming the flow of this cash is essential if Mexico and the United States hope to disrupt powerful transnational criminal organizations that are using their wealth to corrupt, terrorize and kill.

Despite unprecedented efforts to thwart the traffickers, U.S. and Mexican authorities are seizing no more than 1 percent of the cash, according to an analysis by The Washington Post based on figures provided by the two governments.

The major Mexican drug organizations write that off as the cost of doing business - losing a percentage far smaller than the fees for an ordinary wire transfer or ATM withdrawal, Mexican and U.S. law enforcement officials said.

The Obama administration recently proposed a $600 million surge in spending and personnel, including additional gamma-ray scanners and money-sniffing dogs, as part of an intensifying effort to capture the dollars going from U.S. drug consumers to Mexican mafias.

The drug traffickers and their Colombian suppliers smuggle $20 billion to $25 billion in U.S. bank notes across the southwest border annually as they seek to circumvent banking regulations and the suspicions aroused by large cash deposits, studies by federal officials, regulators and academics show.

"If we fail to curtail these money flows, the confrontation with organized crime will generate more violence and more corruption," Carlos Pascual, the U.S. ambassador to Mexico, said at a border conference in El Paso this month.

Most of the money is smuggled in plastic-wrapped bricks of $20 bills. Often the bank notes retain the sticky residue or fine powder generated by the marijuana, cocaine and methamphetamine sold to the most voracious consumers in the world.

"Cash is the ultimate challenge for us," John Arvanitis, chief of financial operations for the Drug Enforcement Administration, said in an interview. "It moves so rapidly, so fluidly. It crosses borders. It moves in bulk. It is stored in warehouses. It is moved into business. They have multiple, multiple options. They can hide a million dollars in a tractor-trailer, or they can carry it across the border in a handbag."

Working together

Since the two countries pledged to bolster joint operations in March 2009 and began searching more vehicles heading south, customs agents have seized record amounts of cash - not only in vehicles but also hidden in children's toys, loaves of bread and body cavities.

But authorities are barely making a dent in the cartel profits.

U.S. agents captured $85 million in illicit cash along the southwest border last year, according to the Department of Homeland Security. Mexican inspectors have seized $31 million in suspicious cash at all ports of entry into the country over the past three years, according to figures provided by the Mexican customs agency.


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