Have you ever wondered what Mexican Drug Cartel, mafia and other illegal entities do with the millions of dollars and in some cases billions of dollars.This professional article by Michael Webster who consults with authorities on “how to follow the money“ provides a comprehensive overview of the various techniques used by Mexican drug cartels and many other criminal organizations. How do they get away with it in most cases.
To launder money, emphasizing the complexity and international scope of their operations. By examining specific regional practices, the intricate details of laundering methods become clear, offering insights for both law enforcement and financial institutions.
The fight against money laundering requires a coordinated global effort. Mexican drug cartels' laundering activities in China, Italy, France, Hong Kong, Panama and beyond highlight the need for stringent financial regulations by Congress and international cooperation by other countries and jurisdictions.
By understanding these methods, authorities can better target and dismantle the networks that enable these underworld organizations to sustain their operations.
Laundering money is the process of concealing the origins of money obtained through illicit means, making it appear legitimate. Mexican drug cartels other criminal entities, employ sophisticated methods to launder their proceeds, often using global networks. Here is a detailed exploration of various money laundering techniques and the intricate processes involved.
Money laundering is a critical concern for law enforcement agencies worldwide. Mexican drug cartels are notorious for their extensive and complex laundering operations, leveraging international financial systems and exploiting vulnerabilities in various countries. This article delves into the multiple methods used by these cartels, with a focus on operations in China, Italy, France, Hong Kong, Panama, Luxenberg, and other money, laundering, Havens, and regions regions.
Methods of Money Laundering
Forming limited liability companies (LLC’s) here in the states and then forming international LLC’s, which own the state side LLC’s. Then wire transferring money from the state side LLC to the international LLC Havens in certain jurisdictions around the world.
A good place to launder money is through casinos around the world. There, you can turn the casino chips into cash and claim you want it. However, don’t do it in one casino do it in several that way it’s harder to follow the money and making a good case for prosecutors.
Smurfing and Structuring
Cartels often use a technique called "smurfing" to break down large sums of money into smaller, less suspicious amounts. These smaller amounts are then deposited into various bank accounts or used to purchase monetary instruments such as cashier's checks or money orders. This process, known as structuring, helps avoid triggering financial institutions' reporting requirements.
Example: In the United States, the Bank Secrecy Act requires banks to report transactions exceeding $10,000. By structuring deposits to remain below this threshold, cartels can evade detection. However, if you make several deposits just under 10,000 same 9,500 that would raise suspicion and triggered the paperwork. cash.
Trade-Based Money Laundering (TBML)
TBML involves using international trade to launder illicit funds. This can include over-invoicing, under-invoicing, or misrepresenting the quality or quantity of goods and services.
Example: A cartel might export low-value goods but invoice them at a much higher price. The overseas buyer, often a cartel-affiliated entity, pays the inflated invoice, transferring illicit funds under the guise of legitimate trade.
Shell Companies and Front Businesses
Creating shell companies and front businesses allows cartels to integrate dirty money into the financial system. These companies can engage in legitimate business activities, providing a cover for illicit funds.
Example: A cartel might establish a series of seemingly legitimate businesses that mainly deal in cash such as bars restaurants, donut shops, cleaners, nail shops, massage parlors, laundromats, and other retail cash businesses. Cash from drug sales is funneled through these businesses, mixed with legitimate earnings, and deposited into the business’s bank accounts.
Real Estate Investments
Investing in real estate is a common laundering method. Cartels purchase properties with illicit funds and then sell or rent them, creating a legitimate income stream.
Example: In Mexico, cartels have been known to buy luxury properties in tourist areas, using them as both investments and safe houses.
Money Mules and Cash Couriers
Cartels often use money mules to physically transport cash across borders. These individuals are paid to carry large amounts of money, either by hiding it on their person or in their luggage.
Example: A money mule might travel from Mexico to the United States with thousands of dollars hidden in clothing, electronics, or other personal items.
Digital Currencies and Cryptocurrency
Cryptocurrencies provide anonymity and ease of transfer, making them attractive for laundering money. Cartels can convert cash into cryptocurrencies, move them across borders, and then convert them back into cash or other assets.
Example: Using a cryptocurrency exchange, a cartel can transfer Bitcoin from a wallet in Mexico to a wallet in Hong Kong, and then use it to purchase goods or convert it back to cash.
Regional Focus: Intricate Details
China
Chinese underground banks and the use of the Chinese financial system are prominent in laundering cartel money. These banks facilitate large-scale money transfers without traditional banking scrutiny.
Technique: Cartels may deposit illicit funds into these underground banks, which then transfer the equivalent amount in RMB to a recipient in China. This money can be used for investments or held in Chinese bank accounts, often with minimal regulatory oversight.
Italy
In Italy, cartels often collaborate with the Mafia, using their established money laundering networks. These include using local businesses and real estate.
Technique: The 'Ndrangheta, known for its extensive involvement in drug trafficking, provides laundering services by investing in luxury real estate and high-end restaurants in tourist areas, blending dirty money with legitimate revenue.
France
France’s financial system is used for sophisticated laundering schemes, often involving luxury goods and art.
Technique: Cartels might purchase high-value art pieces and luxury items, which can be easily transported and sold in different markets. These items serve as both investments and means to move money internationally.
Hong Kong
Hong Kong's financial hub status makes it a key location for laundering activities, particularly through its banking system and real estate market.
Technique: Cartels set up shell companies in Hong Kong, using them to open bank accounts and move funds through international wire transfers. The city’s real estate market is also a prime target for investment and laundering operations.
This was just a few of the hundreds of ways there are to laundering money. Plus, noon, clever ways are being utilized and dreamed up frequently.
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