Colombian authorities have arrested members of a network that laundered drug payments between Mexico's Sinaloa Cartel and Colombian criminal organization the Gaitanistas, providing insight into the small-scale strategies used by transnational criminal groups to clean dirty money.
On December 10, elements of Colombia's investigative police (DIJIN) and Interpol arrested seven family members in the city of Cali for laundering over $454,000 in drug payments between the Sinaloa Cartel and Gaitanistas, also known as the Gulf Clan, Urabeños, and Gaitanist Self-Defense Forces of Colombia (Autodefensas Gaitanistas de Colombia – AGC), reported Proceso.
According to Pablo Ruiz, head of the DIJIN's special crimes unit, the seven belonged to a laundering network that also operated in Houston, Texas and Guadalajara, Mexico, reported El Espectador. From these cities the money would be transferred in smaller sums, using a technique known as "smurfing," to exchange houses in the Colombian cities of Cali and Buenaventura. This method is intended to camouflage the flow of money so as to avoid raising suspicion.
In Cali and Buenaventura the seven family members also allegedly recruited people from marginalized neighborhoods, paying them a commission in order to use their bank accounts to receive money transfers.
Once in Colombia, the funds would be funneled into bank accounts to buy assets and other goods. Ruiz said the group also transferred money abroad via Colombian exchange houses.
Ruiz asserted that authorities will continue working towards catching other members of the network in the United States and Mexico.
InSight Crime Analysis
This latest evidence of ties between between the Sinaloa Cartel and the AGC, two of Latin America's most powerful criminal organizations, shines light on the relatively small-scale operations these groups are adopting to prevent the detection of their criminal proceeds. Indeed, the tightening of money laundering regulations has brought some of the largest international banks in the world under scrutiny, requiring criminal groups to exercise greater caution and creativity when transferring illicit proceeds.
SEE ALSO: Coverage of Money Laundering
As these most recent arrests in Cali indicate, the practice of breaking up large drug profits into smaller money transfers is one method of avoiding attention from authorities. In Colombia, where profits from money laundering are estimated to account for two percent of GDP, over 140 different money laundering techniques have been identified, many of which, such as "smurfing," are extremely difficult to detect.
The difficulties are exacerbated by lax laws in the United States, which are reportedly making it easier for criminals to launder money through anonymous businesses, or "shell companies," according to a recent report by CNN Money.