The Los Angeles Times reports that the owners of a Los Angeles toy company that made teddy bears were sentenced to federal prison terms Tuesday for their roles in helping launder drug money for Colombian and Mexican traffickers. From the LA Times:
“The U.S. attorney’s office said the company had twin reputations – as a manufacturer of plush toys and as an international leader in laundering dirty money.
The toy company, federal prosecutors said in a statement, was part of the so-called “Black Market Peso Exchange,” which trades drug money in the United States for “clean” Colombian pesos through the international purchase and shipment of goods.”
The circle of drugs and money flowing back and forth across the Rio Grande is thriving, one that feeds the U.S. hunger for drugs and Mexico’s for guns and of course money.
With U.S. inspectors focused primarily on what’s coming into the U.S. rather on what’s going out, the odds are fairly good that huge lots of drug money can be smuggled across the border.
Jonathan Winer, Deputy Assistant Secretary of State for International Narcotics Matters in the Clinton Administration, explains how money launderers devise ways to get drug money into Mexico from drug sales.
“The secret of the ‘Black Market Peso Exchange’ is that the currency doesn’t have to move across the border. It can stay put. What they can do instead is they can go to an electronics dealer or an appliance dealer or a car dealer and say, ‘Here’s a bunch of currency. Let me buy a lot of electronics from you or cars or appliances,’ and the dealer says, ‘Great. Now you deliver that stuff down into Mexico for me and we will sell it down there and generate pesos.’ I never have to move the money. When I am getting pesos for those goods, which I now own, that’s clean money. We know what I generated those pesos for… I am in the automobile business now. I am in the electronics business. I am in the appliance business.”
From the outside, those businesses look fully legit, and it’s not so easy for U.S. authorities to follow the trail of drug money once it’s been converted into cars or TVs. Money launderers are using a variety of other ways to clean and transport money south of the border, whether through stored-value cards or the small money transfer houses that migrant workers use to send remittances back home.
Read more from America Abroad’s report from the El Paso-Juarez border »