These are the 2 classic ways Mexican cartels launder money

Business Insider: Mexico is home to several drug trafficking organizations (DTOs): the Sinaloa cartel, La Familia cartel, Knights Templar cartel, Juarez cartel, and others.

Generally, these organizations buy cocaine processed in South America and smuggle it into the United States to sell. After that, however, they need a way to get the money back to Mexico — and secretly. Read more. 

Attacking the Money-Laundering Problem in Mexico

National Law Review: According to the Los Angeles Times, Mexican officials have estimated the amount of laundered money in the Mexican economy at $50 billion annually—three percent of the legitimate Mexican economy.  The CIA World Fact Book labels Mexico as a “major drug-producing and transit nation”, as well as a “significant money-laundering center”.  Illicit cash flows from cartels have affected nearly every corner of the Mexican economy.

On October 17, 2012, Mexico passed the Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (the “AML Law”), a new federal law aimed at identifying and preventing the use of illegal proceeds and terrorism financing.  The AML Law became effective on July 17, 2013.  The AML Law created an investigative unit within the Mexican Attorney General’s office, tasked with investigating transactions involving illegal proceeds.  It also provides for monetary and administrative sanctions, as well as criminal liability. Read more. 

Castillo Reports Govt. Has Seized Four Hundred Thirty Million Pesos of Templar Leaders Real Estate

Borderland Beat: Los Caballeros Templarios' cartel leaders managed to accumulate a fortune of more than 430 million pesos ($35,000,000USD) in properties,  authorities revealed yesterday.

The current leader of the criminal organization, Servando Gómez "La Tuta", added various properties for 195 million pesos. Read more.

As Mexico cracks down, drug money comes to U.S.

Denver Post: For a company that booked $12 million in annual sales importing snacks such as chile- and lime-flavored chips from Mexico, Baja Distributors Inc.'s offices were oddly quiet.

There were no signs outside. Its small warehouse was almost empty. Phones went unanswered.

Investigators say there was a reason for the anonymity: The business was laundering money from Mexican drug traffickers. Baja Distributors, whose executives denied laundering drug money, brought more than $17 million from Mexico in 18 months.  Read more. 

Laundering Mexico's Drug Money: Washing Up

The Economist:Drug traffickers, like everyone else, only want money because they want what money can buy. But turning dirty cash from drug sales into clean, usable currency has become harder for Mexican drug gangs as a result of tighter banking regulations at home and in the United States, their main market.

The criminals are responding by piggy-backing on cross-border trade to launder their gains. Read more. 

Fake Mexico TV crew jailed in Nicaragua for 30 years

BBC
January 18, 2013

A court in Nicaragua has jailed for 30 years each 18 people who tried to enter the country with $9.2m (£5.8m), posing as Mexican TV journalists.

A judge in Managua found them guilty of money-laundering and organising a drug link between Mexico and Costa Rica.

They were arrested in August after police found the cash and traces of cocaine in six vans, some painted with Mexico's Televisa network logo.

Central America is increasingly a transit route for Mexican drug gangs.

The only woman in the group was named as their leader and sentenced to 20 years for international drug-trafficking, eight-and-a-half years for organised crime and seven years for money-laundering - a total of more than 35 years.

However, 30 years is set by Nicaraguan law as the maximum prison sentence.

"Raquel Alatorre Correa will finish her sentence on 24 August, 2042," said the judge.

The money and the vans have been confiscated by the judge.

The 18 Mexicans had already been found guilty in December but were awaiting their sentences.

At the time of their arrest, the self-proclaimed journalists said they had been sent to cover a high-profile murder for Televisa, Mexico's biggest TV network, but the company quickly denied any link to the group. Read more. 

Mexico considers marijuana legalization after ballot wins in U.S.

Mexico, which has fought a long war against drug cartels that supply U.S. users, is rethinking its marijuana policy after Colorado and Washington approved legalization.

Los Angeles Times: By Richard Fausset, January 4, 2013.
MEXICO CITY

Forgive the Mexicans for trying to get this straight:

So now the United States, which has spent decades battling Mexican marijuana, is on a legalization bender?

The same United States that long viewed cannabis as a menace, funding crop-poisoning programs, tearing up auto bodies at the border, and deploying sniffer dogs, fiber-optic scopes and backscatter X-ray machines to detect the lowly weed?

The success of legalization initiatives in Colorado and Washington in November has sparked a new conversation in a nation that is one of the world's top marijuana growers: Should Mexico, which has suffered mightily in its war against the deadly drug cartels, follow the Western states' lead?

Mexico's new president, Enrique Peña Nieto, opposes legalization, but he also told CNN recently that the news from Washington and Colorado "could bring us to rethinking the strategy." Read more. 

Mexico’s Narco Televisa Scandal: The Impunity of the Elite

MadCow Morning News posted on October 29, 2012 by Daniel Hopsicker

Even as he prepares to take office in a month, a mushrooming scandal in Mexico threatens that country’s new President, Enrique Pena Nieto.

Some call it Mexico’s Watergate; the comparison might even be apt.

Like Watergate—which picked up momentum only after Richard Nixon had won the ’72 Presidential election—the Narco Televisa Scandal is heating up just before Pena Nieto takes office.

Watergate had a largely unexplored Mexican connection. The Narco Televisa Scandal has an American angle. Both scandals involve drug money.

And therein lies the rub, explaining why reaction in the U.S.—despite billions of US taxpayer dollars pouring into the black hole of  Mexico's drug war—has been a studied and exceedingly mild indifference.

“It has become known as the case of the fake journalists, read the lead in a recent wire report about the case distributed to American newspapers.

But this is untrue. No one in Mexico—where Televisa’s guilty involvement is almost a given—is calling it that. It is the Narco-Televisa Scandal. Read more. 

Mexico's Senate approves bill to fight money-laundering epidemic

LA Times: October 11. By Richard Fausset and Cecilia Sanchez. 

MEXICO CITY -- Mexico’s Senate on Thursday unanimously approved an anti-money laundering bill in hope of stemming a multibillion-dollar tide of illicit cash that flows from the nation’s powerful drug cartels and has seeped into nearly every corner of the Mexican economy.

The bill, which was approved this year by the lower chamber, has been under consideration for more than two years in the Mexican Congress and could help the struggling nation in its fight against the narco gangs. Although the outgoing administration of Felipe Calderon has managed to kill or capture more than two-thirds of the country’s most-wanted drug capos, it has struggled to hit them in their bank accounts.

Calderon, who leaves office in December, has long supported a stronger anti-laundering statute, and on Thursday -- a day when Amnesty International was criticizing him for failing to have taken more effective action to stem human-rights abuses committed in his six-year fight against the narcos -- the president sent a tweet congratulating the legislators. Read more.

Former Mexico PRI governor pleads guilty in drug-trafficking case

LA Times Blogs: MEXICO CITY -- In one of the most high-profile drug prosecutions of a Mexican politician, a former state governor has pleaded guilty in a U.S. court to charges that he helped launder millions of dollars for cocaine traffickers.

The plea was entered Thursday by Mario Villanueva, former governor of Quintana Roo state, home to the posh resort town of Cancun.

Villanueva was extradited to the United States in 2010 and could face a sentence of up to 20 years. Read more.

How the US Government, Banks, Prison-Industrial Complex, Corrupt Officials, Businesses, Law Enforcement, Racists and the CIA Profit From Illegal Drugs

This article is broad and brings together many strands of the story. The resulting image is of a war on drugs that for reasons of its own leaves in tact the financial empire built on illegal flows through powerful "legitimate" financial institutions and targets foreign countries, the poor and people of color. The links are also useful.

Truthout: A recent article in The Guardian UK offers evidence that "while cocaine production ravages countries in Central America, consumers in the US and Europe are helping developed economies grow rich from the profits." According to The Guardian UK story, the study by two Colombian professors found that "2.6% of the total street value of cocaine produced remains within the country [Columbia], while a staggering 97.4% of profits are reaped by criminal syndicates and laundered by banks, in first-world consuming countries."

One of the researchers, Alejandro Gaviria said: "We know that authorities in the US and UK know far more than they act upon. The authorities realize things about certain people they think are moving money for the drug trade - but the DEA [US Drug Enforcement Administration] only acts on a fraction of what it knows." Read more.

The government distributes 200 million pesos belonging to El Chapo

El Universal. More than 15 million dollars belonging to the Sinaloa Cartel, led by Joaquín “El Chapo” Guzmán, as well as jewelry and property seized by the Army in November of last year, will be distributed among federal agencies after the Attorney General of the Republic (PGR) labelled them abandoned to the federal government when no one claimed it as their rightful property.

The office issued the edict yesterday in the Official Journal of the Federation, which reports that the money - with the exchange rate now standing at 209,335,625 pesos - will be shared between the PGR, the Judicial Branch of the Federation, and the Ministry of Health.

The seizure of cash and property took place on November 18, 2011 in Tijuana, Baja California as part of Operation Zorro, in which a Grand Cherokee transporting the huge sum to a safe house of the Sinaloa Cartel was intercepted. The house was used as a center of financial operations for the criminal organization, reported the Ministry of National Defense (Sedena).

Although no one was arrested, the military seized 15 million 350 thousand U.S. dollars that were in three suitcases, along with jewelry, which will now become part of public funds for activities related to the administration of justice, fight against organized crime, and prevention and treatment programs for addicts.

According to the edict, the money and property was decreed abandoned after the 90 days required by law during which time someone can claim ownership of the resources and assets by establishing legal ownership. As this did not take place, in accordance with law, the cash and jewelry now belong to the federal government coffers, a measure taken because of preliminary investigation UEIORPIFAM/AP/308/2011.

Among the goods detailed in the document were 11 watches of various brands such as Cartier, one of which “encrusted diamonds on the face and bracelet” as well as one of the same brand made entirely of 18-carat gold.

In addition, there is a Rolex with gems, as well as pieces from Nautica, Burberry, and even a limited edition Frederique Constant Geneve watch, whose serial number is 1764, which, according to collectors, is assembled by hand, for which they are worth in the two thousand euro range.
Also abandoned to the government were eight rings made of different materials and of different designs, one of which had a horseshoe-shaped inlay, although the edict does not specify the type of gem used. Read more.

(Translation by Michael Kane, Americas Program)

Drug Trade: Meth in Mexico--A Turning Point in the Drug War?

Mexican authorities announced Feb. 8 the largest seizure of methamphetamine in Mexican history -- and possibly the largest ever anywhere. Stratfor Global Intelligence provides a detailed analysis of the significance of the growth of meth manufacturing in Mexico.  Here is their conclusion:


Stratfor: "Historically, organized criminal groups have relied on control of a market for their source of wealth and power. But the current situation in Mexico, and the cocaine trade in general, prevents the Mexican groups (or anyone) from controlling the market outright. As long as geography and market forces keep the traffickers split, all sides in Mexico will try to use violence to get more control over territory and market access. We assume that Mexico's geography will not change dramatically any time soon, but market forces are much more temporal.

Mexican criminal organizations can overcome their weakness in the cocaine market by investing the money they have earned (billions of dollars, according to the most conservative estimates) into the control of other markets. Ultimately, cocaine is impossible for the Mexicans to control because the coca plant can only grow in sufficient quantity in the foothills of the Andes. It would be prohibitively expensive for the Mexicans to take over control of coca cultivation and cocaine production there. Mexican criminal organizations are increasing their presence in the heroin market, but while they can grow poppies in Mexico and produce black-tar heroin, Afghanistan still controls a dominant share of the white heroin market -- around 90 percent.

What Mexicans can control is the methamphetamine market. ... For the Mexican TCOs, industrializing and controlling the methamphetamine market offers a level of real control over a market that is not possible with cocaine. We expect fighting over the methamphetamine market to maintain violence at its current levels, but once a group comes out on top it will have far more resources to expel or absorb rival TCOs. This process may not sound ideal, but methamphetamine could pick the winner in the Mexican drug war." read more

Drug trade--the money: US sees cash smuggling as critical in drug trafficking fight; experts doubt results are enough

AP/Washington Post: "U.S. Immigration and Customs Enforcement reported more than $150 million in seized cash and 428 arrests in bulk cash smuggling investigations in fiscal year 2011, up from $7.3 million and 48 in fiscal year 2005. But experts say measuring the impact of the beefed-up focus is tricky.

It’s hard to track cash’s origin and destination... Plus, the amount seized represents a fraction of the total money at stake. Estimates cited by federal authorities suggest at least $18 billion in illicit proceeds is smuggled across the southwestern border each year. "

Drug War - the Money: US officials say rise in Puerto Rico illicit cash seizures is sign of drug smuggling shift - The Washington Post

Washington Post: "Law enforcement agencies have seized sharply increased amounts of suspicious cash in Puerto Rico over the past year, an apparent sign that more drug proceeds are flowing through the U.S. island territory and the Caribbean as a whole, officials say.

Large seizures of money, ranging from the tens of thousands of dollars to more than a million, have become routine in Puerto Rico, where traffickers can take advantage of frequent air and ship traffic to and from the continental United States to move both drugs and money, according to law enforcement officials in the region." read more

Cartels use legitimate trade to launder money, U.S., Mexico say

latimes.com: "Faced with new restrictions on the use of U.S. cash in Mexico, drug cartels are using an ingenuous scheme to move their ill-gotten dollars south under the guise of legitimate cross-border commerce. U.S. and Mexican authorities say trade-based money-laundering may be the most clever — and hardest to detect — way in which traffickers are washing and distributing their billion-dollar profits." read more

Drug War - the Money: US Alleges Hezbollah-Zetas Drug, Money Laundering Nexus

The Pan-American Post: "The latest scare about Hezbollah’s links in Latin America comes in the form of charges against a Lebanese man who U.S. authorities say has ties to Hezbollah and to Mexico’s Zetas.

Ayman Joumaa, aka “Junior,” is accused of selling Colombian cocaine to the Mexican trafficking group and laundering money on their behalf, while using the profits to finance Hezbollah, a militant group based in Beirut." read more

Drug War Money Laundering: Justice Department says DEA drug-laundering “stings” date back to Reagan presidency

After nearly thirty years, the DEA is still trying to trap those drug lords and still thinks this will help "win" the war on drugs.

HoustonChron.com blog: "A top Justice Department official on Wednesday confirmed the existence of ongoing investigations where agents have laundered drug-proceed money to Mexican drug cartels as part of a sting run, but he defended those probes against Republicans’ attacks.

Congress gave the Drug Enforcement Administration the authority to conduct such sting runs as far back as 1984, Assistant Attorney General for Legislative Affairs Ronald Weich told Rep. Darrell Issa, R-Calif., in a letter, obtained by Texas on the Potomac. In investigations during the Ronald Reagan administration, some in which agents laundered over $100 million, they gained access to the top levels of drug-cartel leadership, Weich wrote." read more

Drug Laundering: Mexico President's Office Says Mexico Didn't Know of DEA Money Laundering

Translated by MexicoBlog. 

Reforma: "Alejandra Sota, spokesperson for President Felipe Calderon, denied that the Government of Mexico had knowledge of the money laundering operation of agents of the Federal Drug Enforcement Administration (DEA) as part of the fight against drug trafficking.

"No, the Mexican government did not know and it is important to note that we have initiated an investigation by the Attorney General's Office to determine responsibilities and, in any case, to investigate if there was such involvement," said Sota to the Univision Network. The New York Times reported last weekend that the DEA has been laundering or smuggling millions of dollars in profits of Mexican drug cartels as a strategy in the fight against drug trafficking." Reforma only allows subscribers access to its website.

Drug Money Laundering: Lawmakers to Open Inquiry on Undercover D.E.A. Operation

NYTimes.com: "Congressional Republicans said Monday that they would open an investigation into undercover operations by the Drug Enforcement Administration in which agents have laundered and smuggled millions of dollars in drug money as part of an effort to help Mexico fight organized crime.

... Representative Darrell Issa, chairman of the House Oversight and Government Reform Committee, (which has been investigating the "gun walking" Fast and Furious operation), said in a letter on Monday to Attorney General Eric H. Holder Jr., ...  that he would expand that investigation to include the drug agency, describing its money-laundering investigations as “dangerous schemes” and adding that “the consequences have been disastrous.”" read more