How Mexican Drug Cartels Launder Their Money Christina Sterbenz - Business Insider
go to original February 24, 2015

Money laundering: From the Sinaloa Cartel to LA’s fashion district (CCTV)

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.

In a recent money-laundering case against 32 members of a Mexican cartel, special agent with Homeland Security Investigations (HSI) Jill Dennewitz explained how these organizations go about transporting their cash.

While many cartels take the risk of smuggling profits back to Mexico in bulk, more sophisticated groups launder money to avoid seizures by border patrol. To do that, they use two basic methods.

First, if traffickers decide to launder their money through financial institutions, they need to deposit their "dirty money" at a bank.

Second, a process known as "layering" goes down. Traffickers will send drug proceeds through various wire transfers to different accounts in different names in different countries, all the while varying the amount of their deposits and withdrawals to make the paper-trail harder to follow. Some traffickers even send drug profits back to Mexico in wire transfers disguised as payment for important commodities, such as gold.

Finally, the now-laundered money re-enters the mainstream economy, appearing to originate from a perfectly legal transaction.

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