Money Laundering 101

The U.S. Treasury has sanctioned a few people and some companies associated with laundering money for the Sinaloa cartel. They’ve used the authority provided by designating the cartel as a terrorist organization. Treasury indicates that the cartel has used currency exchanges and bulk cash pickups to launder the money.

This has been going on for many years. I heard about it from a treasury official in 2019. Have you ever wondered why there seems to be a currency exchange on every corner in cities that attract U.S. tourists? Yes, Americans do pay for things in dollars and most vendors accept them. But the amount of money going thought these exchanges is far more than what tourists are spending.

Here’s how the Sinaloa and other cartels use the exchanges for money laundering. They have millions and millions of dollars of cash from fentanyl sales in the U.S. They smuggle that money in bales to Mexico. They then designate the dollars as tourist receipts and deposit them in currency exchanges. The cash is now legitimate. They then gather all this “tourist money” from the exchanges, put it in armored trucks, and legally ship it back across the border to the U.S. They then deposit it in U.S. banks under the names of front companies and shell companies.

This seems like a hard business to prosecute. I don’t think sanctioning a few entities will stop it.