30 Jul 2021
One might wonder whether it would be easy to launder $1 million in cash in one day for Mexican cartels. Sadly, the answer is, you wouldn’t need a full day and could probably get it done in hours. Worse yet, 98% of law enforcement, regulators and AML professionals would never take note.
In my view, the best method of laundering $1 million for a criminal depends on the physical location of the owner of the illicit funds, their business model, and their needs.
Assuming the owners of the cash are Mexican cartel leaders that have sold cocaine and heroin in the U.S., though a network of Chinese nationals in North America with a demand for US cash (my clients with a demand for U.S. dollars), I would swap the cash with them, on behalf of my Mexican supply clients with U.S. dollars. In return, my Chinese clients with a demand for dollars would provide renminbi (RMB) to my Mexican clients in an account in China, or in hard cash.
Chinese nationals with a demand for cash in North America are plentiful. They operate “legal” grey market businesses in North America that buy and export certain products sent (often smuggled) to China, including those that buy outdated iPhones in bulk, such as 6s and 7s. My demand clients (for dollars) from China seeking this cash also include wealthy Chinese looking for US cash in North America, due to foreign investment restrictions imposed on Chinese citizens within the PRC. Many of them seek to buy mansions in Vancouver and other Canadian cities. They can’t get personal value out of China due to government restrictions (maximum $50k per year).
My supply clients, Mexican traffickers, would gladly use the RMB in China to buy goods in the huge free zones in Guangzhou where they can also buy unlimited amounts of high-quality counterfeit goods that can be exported to Latin America for sale. This provides them with a “legal front” in their home country. My Mexican clients also use RMB to pay Chinese triads to obtain precursor chemicals they use to manufacture meth and fentanyl. These chemicals are often acquired from the unregulated pharmaceutical manufacturers in China controlled by Chinese triads. There would be no paper trail of the value transfers due to the swap that eliminates the initial cross-border value movement.
All communication between the parties would be encrypted using WeChat, because the servers holding the data concerning communication via WeChat are in the PRC and not accessible to Western law enforcement. Everyone involved in the network of money brokers would use multiple phones and destroy one every week, then subsequently using a new phone. The above transaction can be carried out in no more than 2 days and often in 1 day, if well-coordinated.
When I worked in the black money markets undercover, we (meaning the network of money brokers aligned with me) had access to endless “demand clients” and “supply clients” of all nationalities who would participate in swaps, sometime currency for currency, sometime currency for goods, etc. These types of transactions occur globally. The logistics, transfer of value, etc. vary dependent on where your supply client lives, where they want their wealth, their capital needs, etc.
In conclusion, as the old saying goes, “Please don’t try this at home.”
Robert Mazur was a highly decorated U.S. federal agent for 27 years. He is a court certified expert in money laundering related matters in both the U.S. and Canada. He is the NY Times Bestselling author of The Infiltrator, a memoir of his life undercover as a money launderer within the underworld, and was an Executive Producer of the internationally released film by the same name based on his book. He is now the President of KYC Solutions, a company that provides speaking, training, consulting, and expert witness services globally.
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