From phones to T-shirts, plenty of ways to launder drug cash

AP News
|
Posted: Oct 19, 2015 3:30 PM

MIAMI (AP) — From mobile phones in Miami to T-shirts in Los Angeles, drug organizations are finding ways to convert illicit U.S. dollars into pesos for cartels in Mexico and South America.

Long gone are the days when it was easy to walk into a bank with a bag of drug-related cash to be deposited. With strict federal reporting requirements for cash deposits over $10,000 and sophisticated money laundering monitoring systems, new methods had to be found to pay the drug kingpins.

So cartels such as the Sinaloa and Los Zetas have turned to trade-based money laundering, in which dollars are used to purchase legitimate goods in the U.S. — or at least to make the transactions appear legitimate — which are then sold in Latin America for pesos.

For example, dollars a Mexican drug cartel collects from U.S. sales could be used to buy cellphones from an American company, which knowingly participates. The phones are shipped to Mexico and sold in pesos, allowing the cartel to make the money appear legitimate.

"You end up with cash you can actually spend. You end up with pesos instead of dollars," said John Tobon, assistant special agent in charge of Homeland Security Investigations in Miami.

Earlier this year, Homeland Security and the Treasury Department issued orders requiring about 700 businesses in the Miami area, many of them dealing in cellphones and electronic goods in Latin America, to report cash transactions over $3,000 rather than $10,000. That directive, which expires Sunday unless extended, followed a similar "geographic targeting order" last fall in the Los Angeles Fashion District, where clothing was being sold to convert tens of millions of Mexican cartel dollars into pesos.

"It's import-export stuff. It can be any sort of product," said John Byrne, executive vice president of the Association of Certified Anti-Money Laundering Specialists.

The schemes often involve delivery of hundreds of thousands of dollars in cash, use of code names and phrases and clandestine meetings at run-of-the-mill locations such as suburban Starbucks or McDonald's.

In one recent case, according to court records, a Drug Enforcement Administration confidential source picked up almost $290,000 at a Courtyard Marriott Hotel near a suburban mall for delivery to several Miami-area businesses. Such couriers drive around with bags of cash in the trunks of their cars and get a cut, usually up to 5 percent of the delivery amount.

Sometimes businesses simply falsify invoices to make it appear the drug cash is used in legitimate sales. Jonas Belinaso, who pleaded guilty to money laundering conspiracy, used a company called JB Wireless to help launder drug money that was to be wired to Denmark to pay for new shipments of cocaine to Europe.

Court documents show that a DEA confidential source enlisted Belinaso to move $300,000 to Copenhagen for one drug deal using a shipment of cellphones to South America and wire transfer from there to Europe.

Belinaso's 42-month sentence was cut to a year and a day because of extensive cooperation. His prison term starts Oct. 30.

In the Los Angeles cases, authorities seized about $140 million in cash, bank accounts and other property following raids on dozens of clothing and textile companies suspected of laundering Mexican cartel money. Numerous business owners are being prosecuted.

The Miami investigations may turn up some similar numbers, but authorities aren't sure yet of the scope among the numerous cellphone and electronic businesses that surround Miami International Airport.

"We definitely know there is something prosecutable there," Tobon said. "We are looking to identify players who have not come on our radar yet."

___

Follow Curt Anderson on Twitter: http://twitter.com/Miamicurt .