HomeNewsBriefArizona is Money Laundering Hub for Mexican Cartels
BRIEF

Arizona is Money Laundering Hub for Mexican Cartels

MONEY LAUNDERING / 22 MAY 2012 BY CHRISTOPHER LOOFT EN

A border official has claimed that more than half of the drug cash seized by border officials on the United States’ southwestern border in 2011 came from Arizona, suggesting the state is a key hub in the evolving practice of transnational money laundering.

Testifying before the House Subcommittee on Border and Maritime Security on May 21, Immigration and Customs Enforcement (ICE) Special Agent Matthew Allen said that along the southwest border with Mexico, “approximately 23 percent of the narcotics and approximately 53 percent of the currency and monetary instruments” linked to the drug trade and seized by ICE officials came from Arizona last fiscal year.

During the Congressional field hearing on information sharing in Arizona’s drug fight, Allen said that Sonora, the Mexican state bordering Arizona to the south, is dominated by the Sinaloa Cartel. Immigrations and Customs Enforcement believes the state is a “consolidation point for drug proceeds owed to the Sinaloa Cartel for drugs smuggled into Arizona and distributed to other illicit markets within the United States,” according to a transcript (see .pdf) of Allen’s statement.

Allen said a Mexican banking regulation established two years ago placed strict limits on deposits of US currency in Mexican financial institutions, forcing cartels to change their laundering patterns. One change, he said, was that cartels may now favor making deposits in US banks before wiring the money to Mexico, transferring small amounts at a time to avoid detection.

InSight Crime Analysis

The fact that more than half of the currency and less than a quarter of the drugs seized by ICE were in Arizona shows that money from other drug proceeds is likely diverted there, where it can be smuggled back into Mexico. This suggests that Sonora is a key financial hub for the Sinaloans.

Arizona’s large share of cash seized may result from the shift in money laundering tactics to smaller-scale “funnel account” transfers which make border states important because the practice requires a physical cash exchange between a designated account holder and the trafficking organization they are working for.

This decentralization of laundering seems similar to another alleged Sinaloa practice in the region, in which crews of smugglers brought drugs accross the border in backpacks. Both trends could be a response to heightened enforcement, with the organization adapting by decreasing the scale of both its individual cash and drug transfers.

Compartir icon icon icon

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America's largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

MEXICO / 4 OCT 2016

Every day, Mexico's cartels attempt to ship untold quantities of drugs across the US border. And every day, Mexican and…

ELITES AND CRIME / 30 AUG 2017

Panama's attorney general has warned that political and economic elites have made threats against anti-graft prosecutors, mirroring a pattern seen…

CARIBBEAN / 17 DEC 2012

Authorities in the Dominican Republic reported arresting 26 people and seizing millions of dollars worth of assets linked to an…

About InSight Crime

THE ORGANIZATION

We Have Updated Our Website

4 FEB 2021

Welcome to our new home page. We have revamped the site to create a better display and reader experience.

THE ORGANIZATION

InSight Crime Events – Border Crime: The Northern Triangle and Tri-Border Area

ARGENTINA / 25 JAN 2021

Through several rounds of extensive field investigations, our researchers have analyzed and mapped out the main illicit economies and criminal groups present in 39 border departments spread across the six countries of study – the Northern Triangle trio of Guatemala, Honduras, and El…

BRIEF

InSight Crime’s ‘Memo Fantasma’ Investigation Wins Simón Bolívar National Journalism Prize

COLOMBIA / 20 NOV 2020

The staff at InSight Crime was awarded the prestigious Simón Bolívar national journalism prize in Colombia for its two-year investigation into the drug trafficker known as “Memo Fantasma,” which was…

ANALYSIS

InSight Crime – From Uncovering Organized Crime to Finding What Works

COLOMBIA / 12 NOV 2020

This project began 10 years ago as an effort to address a problem: the lack of daily coverage, investigative stories and analysis of organized crime in the Americas. …

ANALYSIS

InSight Crime – Ten Years of Investigating Organized Crime in the Americas

FEATURED / 2 NOV 2020

In early 2009, Steven Dudley was in Medellín, Colombia. His assignment: speak to a jailed paramilitary leader in the Itagui prison, just south of the city. Following his interview inside…