Authorities in San Diego County, California, have reportedly made the area’s largest-ever cash seizure, drawing attention to the role of bulk cash smuggling as a simple yet enduringly popular money laundering method for transnational organized crime.
On August 23, US Border Patrol agents arrested two men in the North County area for attempting to transport more than $3 million in cash over the border with Mexico in separate vehicles.
“This amount of money represents the largest currency seizure ever in San Diego Sector,” Chief Patrol Agent Richard A. Barlow said.
SEE ALSO: Coverage of US/Mexico Border
After pursuing one of the cars, officials conducted a vehicle stop and found $33,880 concealed in the center console. They later located the second car, which had been abandoned nearby, where they discovered $3,018,000 stashed in the trunk.
The source of the cash was not specified, and the two suspects — one a US citizen and the other Mexican national — will face federal charges for currency smuggling.
InSight Crime Analysis
Although it is a relatively unsophisticated technique, running hard currency across the border in bulk has for years been a favorite method for criminal groups to move illicit earnings from the United States back to Latin America.
Indeed, bulk cash smuggling is still the “most widely-reported method” used by transnational criminal groups for moving ill-gotten funds, according to the 2015 National Drug Threat Assessment (pdf) produced by the US Drug Enforcement Administration (DEA). The report states that in 2014, US authorities reported making more than 4,000 bulk cash seizures amounting to more than $382.2 million. The majority of the cash was seized in the states of California, New York, and Florida.
According to the DEA, currency traffickers often use tractor trailers to move cash in the belief that these are less likely to be targeted by law enforcement, given the large amount of trailers crossing the Mexican border every day. Human couriers are also used to move money out of the United States, and cash is sometimes camouflaged among legal goods within shipping containers.
SEE ALSO: Coverage of Money Laundering
As is the case with drug shipments heading north, authorities face many obstacles in detecting southbound shipments of cash among huge volumes of legitimate merchandise. Moreover, border detection infrastructure has typically focused more on drug interdiction than detecting bulk cash movements, according to a 2010 Wilson Center report (pdf) by security expert Douglas Farah. It is therefore unsurprising that criminal organizations continue to utilize this method.
Given the covert nature of the practice, it is challenging to obtain accurate estimates of the amount of dirty cash filtering out of the United States. The gap between the amount of legitimate US currency reported in Mexico and the total amount flowing back into the United States has been estimated to be between $6 billion and $36 billion, according to figures published by Farah. It is likely that a substantial portion of that discrepancy can be traced to illicit activities.
The DEA report states that alternative money laundering methods also remain popular among criminal organizations, such as trade-based money laundering (TBML) schemes like the Black Market Peso Exchange (BMPE), structured deposits, and money transmissions.