Mexico Drug War - the Money: Money-Laundering Case Illustrates Cross-border Money Flow

The original headline to this article is sensationalist and misleading, highlighting "fears of cross-border spillover". The story is not about "spillover" violence. It actually details a money laundering case that illustrates how dollars from the drug trade are processed in the bi-national money market and used in apparently legitimate cross-border commercial transactions.

NYTimes.com: "... when federal agents raided the stately home of a (Laredo, Texas) perfume salesman in January, (it revealed how the drug trade) is cloaked in the seemingly routine business transactions of the border economy. ... Vikram Datta, a perfume salesman, ... was arrested by federal agents. They accused Mr. Datta, 51, (of being) a major player in the Black Market Peso Exchange, a decades-old system of laundering drug money and reinvesting it back into the economy.

... The Black Market Peso Exchange ... was perfected by Colombian drug lords and later adopted by Mexican drug cartels: When drugs are sold in the United States, the proceeds, in American dollars, are smuggled back into Mexico or Colombia, where they are exchanged for pesos at a discounted rate. The peso-exchange businesses then use the dollars to buy products in the United States — in Mr. Datta’s case, millions of dollars worth of perfume — and have them shipped to purchasers in Mexico or Colombia." read more