Drug cartels avoid bank deposits

MEXICO CITY (AP):

A first-ever study targeting the exorbitant wealth of Mexico's drug lords shows more than half the money smuggled out of the United States each year is cash that never passes through a bank, making it nearly invisible to law enforcement.

That cash is either stashed away or directly spent in Mexico, where 75 per cent of business is done in cash. Drug moguls can buy real estate, cars, airline tickets and just about everything else in cash, allowing their powerful businesses to easily launder the estimated $19 to $29 billion they earn each year selling cocaine, heroin, methamphetamine and marijuana in the US.

"Now that we see that a cash-based economy is here, we can see why it's going to be important for Mexico to have restrictions on how cash can be used, or to require that large purchases are accompanied with notary certificates reported to the Treasury," said US Ambassador to Mexico Carlos Pascual.

20% for america

In the US, by contrast, just 20 per cent of all transactions are conducted in cash.

US Immigration and Customs Enforcement Assistant Secretary John Morton unveiled some of the findings on Wednesday in Mexico City, saying that neither country has done enough to get at the money supporting Mexico's drug cartels.

"Until now, we didn't know enough about this problem in the US or Mexico," he said. "Simply arresting people won't be a complete solution. We have to undermine the organisations and businesses. We have to identify, seize and forfeit their profits."

Drug-related gang violence has soared since President Felipe Calderon launched a crackdown on traffickers in late 2006. More than 22,700 people have been killed. Their leaders are some of the richest men in the world, including fugitive drug lord Joaquin 'El Chapo' Guzman.

The study, which was conducted by several US and Mexican government agencies, suggests law enforcement agents interested in breaking up drug gangs should target cartel treasurers in Mexico who supervise the movement of the cash as it's carried from street dealers in US cities to safe houses in Mexico.