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U.S. Agents Launder Mexican Profits of Drug Cartels

By GINGER THOMPSON

Published: December 3, 2011

















WASHINGTON — Undercover American narcotics agents have laundered or
smuggled millions of dollars in drug proceeds as part of Washington’s
expanding role in Mexico’s fight against drug cartels, according to current and former federal law enforcement officials.




The agents, primarily with the Drug Enforcement Administration,
have handled shipments of hundreds of thousands of dollars in illegal
cash across borders, those officials said, to identify how criminal
organizations move their money, where they keep their assets and, most
important, who their leaders are.
They said agents had deposited the drug proceeds in accounts designated
by traffickers, or in shell accounts set up by agents.
The officials said that while the D.E.A. conducted such operations in
other countries, it began doing so in Mexico only in the past few years.
The high-risk activities raise delicate questions about the agency’s
effectiveness in bringing down drug kingpins, underscore diplomatic
concerns about Mexican sovereignty, and blur the line between
surveillance and facilitating crime. As it launders drug money, the
agency often allows cartels to continue their operations over months or
even years before making seizures or arrests.
Agency officials declined to publicly discuss details of their work,
citing concerns about compromising their investigations. But Michael S.
Vigil, a former senior agency official who is currently working for a
private contracting company called Mission Essential Personnel, said,
“We tried to make sure there was always close supervision of these
operations so that we were accomplishing our objectives, and agents
weren’t laundering money for the sake of laundering money.”
Another former agency official, who asked not to be identified speaking
publicly about delicate operations, said, “My rule was that if we are
going to launder money, we better show results. Otherwise, the D.E.A.
could wind up being the largest money launderer in the business, and
that money results in violence and deaths.”
Those are precisely the kinds of concerns members of Congress have
raised about a gun-smuggling operation known as Fast and Furious, in
which agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives
allowed people suspected of being low-level smugglers to buy and
transport guns across the border in the hope that they would lead to
higher-level operatives working for Mexican cartels. After the agency
lost track of hundreds of weapons, some later turned up in Mexico; two
were found on the United States side of the border where an American
Border Patrol agent had been shot to death.
Former D.E.A. officials rejected comparisons between letting guns and
money walk away. Money, they said, poses far less of a threat to public
safety. And unlike guns, it can lead more directly to the top ranks of
criminal organizations.
“These are not the people whose faces are known on the street,” said
Robert Mazur, a former D.E.A. agent and the author of a book about his
years as an undercover agent inside the Medellín cartel in Colombia.
“They are super-insulated. And the only way to get to them is to follow
their money.”
Another former drug agency official offered this explanation for the
laundering operations: “Building up the evidence to connect the cash to
drugs, and connect the first cash pickup to a cartel’s command and
control, is a very time consuming process. These people aren’t running a
drugstore in downtown L.A. that we can go and lock the doors and place a
seizure sticker on the window. These are sophisticated, international
operations that practice very tight security. And as far as the Mexican
cartels go, they operate in a corrupt country, from cities that the cops
can’t even go into.”
The laundering operations that the United States conducts elsewhere —
about 50 so-called Attorney General Exempt Operations are under way
around the world — had been forbidden in Mexico after American customs
agents conducted a cross-border sting without notifying Mexican
authorities in 1998, which was how most American undercover work was
conducted there up to that point.
But that changed in recent years after President Felipe Calderón
declared war against the country’s drug cartels and enlisted the United
States to play a leading role in fighting them because of concerns that
his security forces had little experience and long histories of
corruption.
Today, in operations supervised by the Justice Department and
orchestrated to get around sovereignty restrictions, the United States
is running numerous undercover laundering investigations against
Mexico’s most powerful cartels. One D.E.A. official said it was not
unusual for American agents to pick up two or three loads of Mexican
drug money each week. A second official said that as Mexican cartels
extended their operations from Latin America to Africa, Europe and the
Middle East, the reach of the operations had grown as well. When asked
how much money had been laundered as a part of the operations, the
official would only say, “A lot.”
“If you’re going to get into the business of laundering money,” the
official added, “then you have to be able to launder money.”
Former counternarcotics officials, who also would speak only on the
condition of anonymity about clandestine operations, offered a clearer
glimpse of their scale and how they worked. In some cases, the officials
said, Mexican agents, posing as smugglers and accompanied by American
authorities, pick up traffickers’ cash in Mexico. American agents
transport the cash on government flights to the United States, where it
is deposited into traffickers’ accounts, and then wired to companies
that provide goods and services to the cartel.
In other cases, D.E.A. agents, posing as launderers, pick up drug
proceeds in the United States, deposit them in banks in this country and
then wire them to the traffickers in Mexico.
The former officials said that the drug agency tried to seize as much
money as it laundered — partly in the fees the operatives charged
traffickers for their services and another part in carefully
choreographed arrests at pickup points identified by their undercover
operatives.
And the former officials said that federal law enforcement agencies had
to seek Justice Department approval to launder amounts greater than $10
million in any single operation. But they said that the cap was treated
more as a guideline than a rule, and that it had been waived on many
occasions to attract the interest of high-value targets.
“They tell you they’re bringing you $250,000, and they bring you a
million,” one former agent said of the traffickers. “What’s the agent
supposed to do then, tell them no, he can’t do it? They’ll kill him.”

It is not clear whether such operations are worth the risks. So far
there are few signs that following the money has disrupted the cartels’
operations, and little evidence that Mexican drug traffickers are
feeling any serious financial pain. Last year, the D.E.A. seized about
$1 billion in cash and drug assets, while Mexico seized an estimated $26
million in money laundering investigations, a tiny fraction of the
estimated $18 billion to $39 billion in drug money that flows between
the countries each year.
Mexico has tightened restrictions on large cash purchases and on bank
deposits in dollars in the past five years. But a proposed overhaul of
the Mexican attorney general’s office has stalled, its architects said,
as have proposed laws that would crack down on money laundered through
big corporations and retail chains.
“Mexico still thinks the best way to seize dirty money is to arrest a
trafficker, then turn him upside down to see how much change falls out
of his pockets,” said Sergio Ferragut, a professor at the Autonomous
Technological Institute of Mexico and the author of a book on money
laundering, which he said was “still a sensitive subject for Mexican
authorities.”
Mr. Calderón boasts that his government’s efforts — deploying the
military across the country — have fractured many of the country’s
powerful cartels and led to the arrests of about two dozen high-level
and midlevel traffickers.
But there has been no significant dip in the volume of drugs moving
across the country. Reports of human rights violations by police
officers and soldiers have soared. And drug-related violence has left
more than 40,000 people dead since Mr. Calderón took office in December
2006.
The death toll is greater than in any period since Mexico’s revolution a
century ago, and the policy of close cooperation with Washington may
not survive.
“We need to concentrate all our efforts on combating violence and crime
that affects people, instead of concentrating on the drug issue,” said a
former foreign minister, Jorge G. Castañeda, at a conference
hosted last month by the Cato Institute in Washington. “It makes
absolutely no sense for us to put up 50,000 body bags to stop drugs from
entering the United States.”


Added: Dec-4-2011 Occurred On: Dec-4-2011
By: saul693
In:
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Tags: DEA, Mexico, drugs, fast, furious, cartels, agents, enablers
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