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 News Around the Republic of Mexico | September 2005 
Drug Cash Smuggling Booming On US-Mexico Border
 Tim Gaynor - Reuters
| | The busts are widespread at border stations from California to Texas, where agents in Laredo plucked $1.7 million in notes from the quarter panels of a southbound Honda Accord in an incident in February that set a port record. |
Tijuana - When the Mexican customs light blinked red at the border crossing with the United States, the driver of the white Chrysler van panicked, put his foot on the gas pedal and made a dash south for Tijuana.
Stopped a few hundred yards down the road, agents found $1,023,000 dollars in $20, $50 and $100 bills crammed into the dash, glove box and even the cloth seat backs of the vehicle traveling from Los Angeles.
For decades, U.S. law enforcement agencies have clamped down on Mexican drug cartels hauling cocaine, marijuana, heroin and amphetamines north over an ever-more tightly watched border to the United States.
Now, with stricter controls on bank accounts and wire transfers, officials are concerned that drug gangs are increasingly running illicit profits back to Mexico in piles of hard cash in cars, trucks and even on foot.
U.S. authorities have seized almost $40 million in bank notes headed into Mexico since 2002 and say cases like that of the van, which was stopped at random crossing into Tijuana in June, are just the tip of the iceberg.
"Bulk currency smuggling is probably the most important part in the war on drugs, although it's not addressed as widely as it should be in law enforcement circles," said Dan Burke, U.S. Immigration and Customs Enforcement supervisory special agent in San Diego.
"Usually when you get a million bucks there's a lot of high-fiving going on, but every single day $1-$2 million in drug money goes across the border here undetected," he added.
Strictly Cash
For years, drug gangs bought up houses, cars and luxury goods with cash in the United States and banked billions in profits to send back to Mexican and Colombian suppliers through electronic transfers.
But in 2000, the U.S. Bank Secrecy Act slapped reporting requirements on all cash transactions over $10,000, curtailing the cartels' spending sprees and making cash smuggling attractive for repatriating earnings, agents say.
"Wire transfers and bank accounts can be traced and assets seized, as can investments such as condos and horses and so on," said John Fernandes, the U.S. Drug Enforcement Administration's special agent in charge in San Diego.
"The predominant method now for the cartels is to say, 'Give me the cash; I'll handle it once it's south of the border,"' he added.
Once in Mexico, where banking oversight is less strict and corruption rife, bundles of greenbacks are laundered through businesses including currency exchange houses and construction projects in cities such as Tijuana, Guadalajara and the Caribbean resort of Cancun.
Law enforcement agencies have no estimate for the amount of drug profits flowing back over the border in cash each year, although U.S. Bureau of Customs and Border Protection figures indicate that it is on the rise.
While the number of currency seizures has remained steady at around 300 in recent years along the border, the average value of each almost doubled to $38,200 in the first months of this year, up from $21,600 in 2002.
The busts are widespread at border stations from California to Texas, where agents in Laredo plucked $1.7 million in notes from the quarter panels of a southbound Honda Accord in an incident in February that set a port record.
Hard currency seizures are also vigorous within the interior of the United States, where the Federal Bureau of Investigation netted $12 million bound for the so-called Juarez cartel in just one operation last year, dubbed "Baja Kings."
The Weakest Link
Law enforcement agents working to hunt down drug proceeds say that while banking laws are adequate to crack down on money laundering in the United States, cross-border cash smuggling remains a weak link.
At present bulk currency seizures are made through intelligence tips and random outbound operations at dozens of border stations along the U.S. side of the 2,000-mile (3,200-km) border.
In Mexico, meanwhile, searches are left to chance as cars and pedestrians are only stopped and searched if they trigger a red light, which flashes randomly, at a customs service post, either at the border or at inland checkpoints dubbed "retenes."
As the result of campaigning within the law enforcement community Burke has succeeded in getting a sign put up just north of the Mexico border near San Diego, warning drivers they must declare "currency or negotiable instruments" over $10,000, which he counts a small victory.
"The biggest problem is the lack of outbound facilities (to carry out searches) and the lack of a method to search vehicles going into Mexico for currency," Burke said.
"We get our victories here and there, we seize $100,000 or $200,000 here or there, but I know at the back of my mind that I'm not even making an impact," he added. |
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