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U.S. dealers are given drugs on credit and, under threat of kidnapping, attacks on their family or even death, they sell their inventory and pay the smugglers back within a week or two. The smugglers then pay someone to drive the cash to a "stash house" near the border, typically in Phoenix, San Diego, El Paso or Houston. There, the cash is broken into increments of $50,000 to $300,000, lowering the risk of losing an entire load in one bust, and farmed out to trusted couriers. They use the same methods people use smuggling drugs north: Money is hidden in the floorboards of buses and inside vehicle panels, tucked behind vehicle firewalls and inside spare tires, or stashed in custom-made compartments. Couriers wear loose-fitting clothes and tape stacks of $100 bills to their bodies. If caught by Customs and Border Protection agents, the couriers often can forfeit the money and simply drive on; Mexican officials don't normally arrest people for failing to report money coming in. For the cartels, that risk is part of the cost of doing business. "Cartels expect that we are going to take some of that money off," said Douglas Coleman, assistant special agent in charge of the Drug Enforcement Administration in Phoenix. In 1969, officials stopped minting $500, $1,000, $5,000 and $10,000 bills, making smuggling harder. That leaves the $100 note as the highest denomination; A packet of 100 of those bills is less than 1/2 inch (1 centimeter) thick and contains $10,000. One billion dollars fits squarely atop a standard shipping pallet. ___ The other way to get money south is to wire it. Since 1972, the United States has implemented a series of restrictions, including a requirement that financial institutions report deposits of $10,000 or more. Still, authorities believe some drug smugglers use U.S. banks to move their money. In a typical scheme known as "smurfing," drug smugglers break large cash loads into less conspicuous increments, deposit them into numerous bank accounts in the U.S. and withdraw from those accounts at Mexican banks. This approach, like other money laundering methods, has drawbacks. Deposits can't be over $10,000, smugglers have to involve lots of people, or "smurfs," and the transactions create paper trails that can draw attention. In another scheme, smugglers give legitimate bank account holders a small cut to use their accounts to deposit in the United States and withdraw in Mexico. Smugglers also are starting to ship cash through the postal service and shipping companies, allowing them to track it from start to finish.
___ Once the money gets to Mexico, the cartels put it to work. About 10 percent of Mexico's economy
-- the world's 13th largest -- is based on cartel operations, analysts say. As a result, lawmakers have refused to pass anti-laundering laws such as reporting requirements when people pay cash for mansions and luxury cars or regulations for salaries paid in cash. "In Mexico there are still some very easy ways to launder money, and there is great reluctance among lawmakers to change that," said Ramon Garcia Gibson, an expert on financial controls. "It's everywhere: Businesses that aren't doing any business except to receive cartel cash and put it in the bank."
[Associated
Press;
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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