Noah Widelo: Drug Trafficking and Organized Crime in Mexico

Another negative externality of drug trafficking from Mexico’s largest drug cartels is money laundering. Money laundering schemes are such a complicated and interesting topic that one of Netflix’s most popular shows, Ozark, tells the story of its microeconomic and macroeconomic effects. Money laundering is the concealment of illegally obtained money from drug sales involving foreign banks and legitimate business. Uneducated Mexican drug cartel leaders hire talented financial and legal advisers to successfully use loopholes in the business and legal world to exploit the banking systems in the United States. The money laundering allows a way to convert their revenue into usable currency. One method drug cartels use is called structuring which is depositing amounts smaller than $10,000 to avoid reporting regulations. Another effective technique cartel leaders like El Chapo used was trade-based where they bought commodities like electronics from U.S. businesses and then sold them in Mexico. Mexico experiences many cases of money laundering because of their institutional weakness and regulatory deficiencies. It is quite unsettling to know that Mexican drug cartels can infiltrate originally innocent businesses and lead to corruption and spreading fear to the workers. The fight by the FBI and DEA have to work proactively rather than reactively to find patterns. Mexican drug cartels are always trying to find new ways to clean the money through loopholes and are always looking at new countries in different regions to achieve this. I believe that as new data science becomes implemented and people move away from paper currency that governments will be able to capture the criminals and put an end to the money laundering schemes.

“Money Laundering Methods: Capture of El Chapo: Thomson Reuters Legal.”  Thomson Reuters Legal, legal.thomsonreuters.com/en/insights/white-papers/money-laundering-methods-of-drug-cartels-and-the-capture-of-el-chapo.

 

Leave a Reply

Your email address will not be published. Required fields are marked *