Report: Criminals smuggle up to $39 billion in drug money, US stops $41 million

By Diana Washington Valdez \ El Paso Times

The Government Accountability Office is calling for urgent action to stop cross-border currency smuggling after federal officials seized $41 million in cash in a little more than a year.

U.S. Sens. Jeff Bingaman, D-N.M., and Max Baucus, D-Mont., asked the GAO last year to examine the transportation of bulk cash proceeds from drug sales in the United States to Mexico or Canada. After finishing its investigation, the GAO produced its findings in the report, "Moving Illegal Proceeds."

According to the report, the National Drug Intelligence Center estimates that criminals smuggle between $18 billion and $39 billion each year across the Southwest border alone.

Between March 2009 and June 2010, after Customs and Border Protection was asked to step up efforts to stem the flow of bulk cash, U.S. agents seized about $41 million in illicit bulk cash leaving the United States at border crossings.

Because Customs and Border Protection does not conduct full-time inspections of outbound traffic, and because other measures are lacking, only a fraction of the illicit cash flow is seized.

The GAO report said technology is creating new money laundering concerns. One of the examples cited is stored value cards. These are prepaid cards loaded with value or currency that are used to move illegal proceeds across the border and around the world.

Unlike with cash, there are no laws in place that require border-crossers to declare the value of prepaid cards they may be transporting.

Mobile phones are also being used with greater frequency to conduct money transactions that may be difficult to detect.

Roger Maier, spokesman for Customs and Border Protection in El Paso, said that as of August of this year, CBP had seized $40.9 million in illicit southbound cash along the Southwest border, a 16.1-percent increase over the same period during the previous year.

"We do not typically comment on the number, frequency or duration of outbound operations, although they have increased," Maier said.

The Mexican government has complained that cash and weapons that flow south of the border enable drug cartels to conduct the kind of bloody battles that have killed thousands of people in Mexico.

The GAO report said arms as well as cash are being seized at the border.
"In June 2010, officers conducting outbound operations at the San Luis, Arizona, port of entry seized a large sport utility vehicle, 114 grenades, and over 2,500 rounds of various types of ammunition," the report said.

Sen. Bingaman of New Mexico said "this report makes clear that we can't solve this problem unless we improve our border infrastructure and technological capabilities. Doing so would make it possible for us to seize billions of dollars per year and deprive drug traffickers of the proceeds that finance their deadly operations."