Money laundering has changed almost beyond recognition since the days of “Scarface”, when Al Pacino’s drug kingpin Tony Montana washed his millions of dollars of drug proceeds by delivering mailbags of cash to his banker friend Jerry. Indeed, those of us involved in AML training are careful always to stress that concentrating only on looking out for dirty cash is dangerous is today’s world of non-cash transactions. But of course many crimes do still generate cash – street-level drug sales, human trafficking, illegal prostitution – and criminal gangs still end up with sacks of cash that they need to process.
And some recent cases in America, focusing on the Mexican Sinaloa and Los Zetas drug cartels, have shown that these organisations have become prolific in trade-based money laundering, whereby dollars (from drug sales in the US) are used to buy legitimate goods in the US which are then exported to Mexico and sold for pesos – laundered profit for the cartels, that they can spend locally as they wish. (This manoeuvre is often called the Black Market Peso Exchange – BMPO.) In recognition of this continuing danger, earlier this year the US Homeland Security and Treasury Department issued “geographic targeting orders” on about 700 businesses in the Miami area, many of them dealing in mobile phones and other electronic goods in Latin America, requiring them to report all cash transactions over $3,000 – instead of the usual $10,000 threshold required by American AML legislation. And in the autumn of 2014, similar GTOs were served on about fifty businesses in the garment district of Los Angeles.
For the cash-intensive businesses, the temptation is great – even before factoring in any cultural pressure or downright threats that might be brought into play. In one recent case, the Drug Enforcement Agency recruited as an informant a cash courier operating out of a hotel in downtown Miami; each week he would deliver $290,000 in cash to local businesses, keeping 5% as his cut. And in another, a business owner called Jonas Belinaso used his company, JB Wireless, to launder $300,000: the company took the cash from the drug cartel in the US, bought a shipment of mobile phones for sale in South America, and wired the proceeds to Copenhagen so that their drug dealers there could buy more drugs. Belinaso is now serving time for money laundering, although he was given a reduced sentence for his co-operation. So if cash is no longer king, it is still at least a (Danish) prince.