Cartels use legit trade to launder money

Dec. 19, 2011 at 10:00 AM
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MEXICO CITY, Dec. 19 (UPI) -- Mexican drug cartels are using fruit, fabric and toys bought in the United States and exported to Mexico to launder money from drug-trafficking, officials say.

The scheme comes amid new restrictions on use of U.S. cash in Mexico and is growing among Mexican cartels, the Los Angeles Times reports.

Money has traditionally been transported across the Mexican border in bags and trucks. But some teams of money launderers working for cartels now use dollars to buy a commodity, then export it to Mexico, creating paperwork and making drug money appear to be proceeds from a legitimate trade transaction. The scheme had long been used by Colombian cartels, the Times said.

"It's such a great scheme," said an undercover agent with U.S. Immigration and Customs Enforcement. "You could hide dirty money in so much legitimate business, and they do. You can audit their books all day long and all you see is goods being imported and exported."

The money laundering enables cartels to transfer earnings to Mexico while converting dollars to pesos in a transaction that can be explained to authorities.

For years, cartels have used dollars to purchase luxury goods and pay their suppliers and dealers. However, they now need pesos and have turned to trade-based money laundering, authorities say.

"It's a better way to conceal proceeds," said Raymond Villanueva, head of an ICE unit that investigates international money laundering. "It's not going to raise so many flags."

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