Word: druggings
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Dates: during 1980-1989
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While businesses and individuals may conceal their assets for purposes that are completely legal, or dubious at worst, the systems set up for their convenience can be perversely efficient at helping drug barons launder as much as $100 billion a year in U.S. proceeds. "It is hard to understand why we failed for so long to institute adequate controls," says Massachusetts Democrat John Kerry, chairman of the Senate's Subcommittee on Terrorism, Narcotics and International Operations. The state of regulation is "so lackadaisical," says Kerry, "it's almost damnable...
...Drug Enforcement Administration officials told TIME that one of Rodriguez's purported financial advisers, Panama-based Mauricio Vives, tried desperately to keep moving the money one step ahead of the agents. Vives called a British banker and told him to move several million dollars, fast, to an account in Luxembourg. If the bank were to delay, his Colombian client would kill him, Vives pleaded. The banker refused, and British authorities cooperating with the DEA froze the account. Not all countries were as helpful. U.S. agents said they tracked Rodriguez's money to the Cayman Islands, Spain and Montserrat, but local...
...money-laundering process, especially in the drug trade, begins with greenbacks. Much of the cash simply leaves the U.S. in luggage, since departing travelers are rarely searched. Larger shipments are flown out on private planes or packed in seagoing freight containers, which are almost never inspected. That explains, in part, why U.S. officials are unable to locate fully 80% of all the bills printed by the Treasury. Once overseas, the cash is easy to funnel into black markets, especially in unstable economies where the dollar is the favored underground currency...
...hauling cash out of the U.S. has its drawbacks. The interest revenue lost while cash is in transit pains a drug dealer as much as it would a corporate financial officer. And since narcotraffickers see America as a safe and profitable haven for their assets, they often launder and invest their cash in the U.S. The first and trickiest step is depositing the hot cash in a U.S. financial institution. Reason: the IRS requires all banks to file Currency Transaction Reports for deposits of $10,000 or more. During the early 1980s, launderers got around this scrutiny by employing couriers...
...keep an eye out for Smurfs, but launderers have developed new techniques. Since retail businesses that collect large amounts of cash are often exempt from the $10,000 rule, launderers have created front companies or collaborated with employees of such outlets as 7 Elevens and Computer-Land stores. To drug dealers, "an exempt rating is like gold," says a Wells Fargo Bank vice president. A restaurant that accepts no checks or credit cards can be an ideal laundering machine. Even a front business with no exemption is valuable because launderers can file the CTRs in the knowledge that they...