Money Laundering and Texas Drug Cartels

Money Laundering Arrests – The Flip Side of the Forfeiture Coin

Money laundering in Texas has to happen, it’s a given. Why? The extremely successful Mexican Drug Cartels that operate here (and across the Tex-Mex border) must have a system to convert the cash revenue generated by their illegal business activities into legitimate and viable assets that can be used by the operation.

Expenses have to be paid just like any other business, sure. Money laundering works to keep the cartel bills paid. But it’s more than that. Cash can be a problem. All that cash is a cumbersome, sometimes troubling aspect of cartel work. Transporting a large amount of dollar bills is problematic, for one thing. Protecting it from hazards like fire or theft is another. Storage of large amounts of cash is a concern, too.

So, when you consider the Texas drug cartels as business enterprises, which they are (more on that in our prior post), money laundering turns into a corporate issue to be resolved and retooled as need be. If this were a legitimate and legal commercial operation, you’d probably have a “money laundering department,” with the head guy carrying the title “Executive Vice President of Money Laundering / Texas Region.”

Money Laundering: It’s Creative, Lucrative, and Global

No one knows how much money is cleaned in the State of Texas, much less in the Dallas-Fort Worth multiplex. Or how it works. There are all sorts of ways for money to be cleaned, and some very creative ways have been developed.

England

For instance, over in Great Britain it’s known that the housing market is a great place to launder money. So much so, that this week the British Government announced that foreign companies will have to start providing a public list of all their assets before they can do certain kinds of business on British soil, like buy property. See, “Britain’s housing market is about to be cleansed of dirty money,” by Ben Moshinsky, published in the Business Insider on May 12, 2016.

Argentina

Money laundering happens all over the world. Down in Argentina, Cristina Fernandez got indicted last month for money laundering; just four months ago, she was ending her 8 year tenure as the President of Argentina. That’s right: the ex-president just got charged with money laundering down in Buenos Aires. (This week, she got arrested in a separate case for fraud.)

Panama

And the big deal about the Panama Papers that everyone is talking about? Well, the crux of that story is that the papers that have been made public are internal documents of a Panamanian law firm that reveal all sorts of creative money movement. That’s right: money laundering.

The firm, Mossack Fonseca, was known for helping its clientele set up offshore bank accounts. Suddenly, internal Mossack Fonseca files began popping up in places like national media news rooms. It’s a continuing news story.

From the already released Panamanian law firm files, there are details about all sorts of money laundering ventures and how they worked. For instance, an Italian mafioso named Giuseppe Donaldo Nicosia had a system where he used some Miami banking routes for his multi-million dollar money laundering plan that centered around investing in New York residential real estate.

Another money laundering twist revealed by the Panama Papers comes from Central America. Guatemalan “drug lord” Marllory Chacon Rossell cleaned millions from her cocaine operation through a money laundering endeavor that involved moving money through a women’s clothing store, a construction company, and through the buying and selling of Panamanian real estate.

Ms. Rossell has already been indicted by the United States as a cocaine trafficker with a multi-million dollar business operating from the Andes mountains in Guatemala to Mexico and parts of Central America. Mr. Nicosia is still a fugitive at large.

Money Laundering Using Pawn Shop Gold in Texas

So it should not be a surprise to read last week’s Dallas Morning News where details were given on how the Sinaloa Cartel worked to clean some of its cartel cash revenue by buying gold that was for sale in Texas pawn shops (as well as in other parts of the country). According to the news story, the drug cartel once overseen by Joaquin “El Chapo” Guzman would then take their pawn shop gold and move it to Florida.

There, all these pawn shop items were melted down, and the gold was then sold for money that was clean and could be used for cartel enterprises. It’s estimated that over $98 Million was laundered using this method. See, “How drug cash moves across the border on a river of gold,” by Alan Katz and published in the Dallas Morning News on May 5, 2016.

You Say Money Laundering, They Say Forfeiture

Here’s the big deal – or one of them – about all this cartel money laundering. Forfeiture is back on track here in Dallas and North Texas since the Department of Justice has renewed its Equitable Sharing Program. This means big profits for state and local law enforcement agencies as they can receive huge amounts of money in asset forfeitures through this sharing program with the federal government.

Details on how that works in our prior post, “Forfeiture Funds are Back as Equitable Sharing Program Gears Up in Dallas County and State of Texas.”

All that drug cartel money moving through Texas from things like both the Sinaloa Cartel and the Gulf Cartel’s heroin trade? Well, if the police can find it, then they can take it.

Even if they don’t arrest anyone on any drug charges, money laundering charges, or even give them a traffic ticket. Even if they don’t find any drugs. That’s the beauty of asset forfeiture from some police perspectives.

For example, the FBI just grabbed $2.3 Million over in California that they tied to some folk from El Chapo’s hometown. They didn’t find any drugs in the house, though. Read, “The FBI seized $2.3 million linked to ‘El Chapo’ Guzmán’s hometown from a house near Disneyland,” in the May 12, 2016 issue of the Business Insider.

Forfeiture has many incentives. Profit is a big one. And knowing that there is all this drug money being cleaned here in Dallas and the rest of Texas on a daily basis? Well, it’s not unreasonable to predict that some big money laundering arrests or at least some million dollar forfeiture grabs are probably going to be happening quite a bit around here in the next year or two.

For more information, see this in-depth article on defending against federal forfeitures, STRUCTURED CASH DEPOSITS: WHAT DO I DO WHEN THE IRS CID AGENT COMES?, as well as our web resources pages on money laundering and Michael Lowe’s Case Results.

STRUCTURED CASH DEPOSITS: WHAT DO I DO WHEN THE IRS CID AGENT COMES? – Dallas Justice Blog