D.E.A., what happens after you launder all that drug money? Can I have some?

Last December, Ginger Thompson of the New York Times wrote an article about a money-laundering operation run by the Drug Enforcement Administration, to track cartel members via U.S. dollar movement.

US Dollar. photo: creative commons / archive.wn.com

US Dollar. photo: creative commons /
archive.wn.com

The operation, and its “high-risk activities raise delicate questions about the agency’s effectiveness in bringing down drug kingpins, underscore diplomatic concerns about Mexican sovereignty, and blur the line between surveillance and facilitating crime” (New York Times).

Still, the money-laundering scheme appears to be a much better move to track the movement of drug cartels than the catastrophe that was/is the Fast and Furious operation run by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), in which the ATF “allowed people suspected of being low-level smugglers to buy and transport guns across the border in the hope that they would lead to higher-level operatives working for Mexican cartels. After the agency lost track of hundreds of weapons, some later turned up in Mexico; two were found on the United States side of the border where an American Border Patrol agent had been shot to death” (New York Times).

In light of being considered comparatively safer than the not-safe-at-all Fast and Furious operation, the money-laundering story needs an update.  Because: where is ALL that money?

And then there is this: “So far there are few signs that following the money has disrupted the cartels’ operations, and little evidence that Mexican drug traffickers are feeling any serious financial pain. Last year, the D.E.A. seized about $1 billion in cash and drug assets, while Mexico seized an estimated $26 million in money laundering investigations, a tiny fraction of the estimated $18 billion to $39 billion in drug money that flows between the countries each year” (New York Times).

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About Melissa Conser

Media Studies student at UC Berkeley.
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8 Responses to D.E.A., what happens after you launder all that drug money? Can I have some?

  1. Pingback: Show’s over, kids. A lot of people are (Everyone probably is) corrupt. We can all go home now. | REPORT INT'L

  2. rachyani says:

    I’ve always wondered where all that money goes (often when I’m watching Breaking Bad…)! Interesting articles too.

    • reportintl says:

      I need to watch that show!

      Did they write a part into the script about the D.E.A. laundering money?! Or are you saying that you wonder, in general, what the D.E.A. does with all the money they seize?

      • rachyani says:

        Oh, I was just wondering! It’s not in the script, but there’s a big chunk of the show that’s devoted to background on the D.E.A., which is really interesting.

  3. Luis says:

    The money seized is later submitted through the courts for forfeiture. Once a federal judge determines that the money was illegal drug proceeds, and the proceeds for forfeiture publicly announced in the WSJ, it will be formally forfeited. Thats assuming the owner of the money doesn’t successfully challenge the government and can prove the money was legitimate, in which case it is returned. Once forfeited the money will be used by the Dept. of Justice and by State and local law enforcement agencies that helped in the case that led to the forfeiture.

    • reportintl says:

      Wow. Thank you for the information. But I wonder if the process is the same in this case because members of the DEA are the ones laundering the money. It seems too complicated to be settled in court as you explain. I’m guessing the process you are referring to is what would happen when an individual (like in this case when a drug cartel member used a quarter horse racing operation as a front for laundering drug money) is accused of laundering money, not when a government agency has laundered drug money to track the origin of the money.

      • Luis says:

        The rules for conducting money laundering investigations are very tightly regulated and approved by the Attorney General. No money is transferred in or out of a foreign country without that country’s knowledge and approval. It’s not too complicated to prosecute in a federal court. That is why you have investigators that connect the dots to show the money flow, then they indict (through a grand jury) the people involved and then seize all the cash and assets used by the traffickers in the operation.

      • reportintl says:

        Luis,

        From the NYT article cited above:
        “They said agents had deposited the drug proceeds in accounts designated by traffickers, or in shell accounts set up by agents…As it launders drug money, the agency often allows cartels to continue their operations over months or even years before making seizures or arrests.”

        Money is sitting in these shell accounts before it is seized, and goes through the process of forfeiture. That is what the article tells us. The problem is: the public cannot be aware of how much money is put into these shell accounts–can we trust that all this money is later seized as drug money at the end of the operation?

        What I’m getting at is–there is a long period of time where this money is in limbo, in that period of time the public has no knowledge of what is being done with this money or how much is there.

        Thus are we to trust that at the end of the operation, the gov’t will seize the money in its entirety, or do we question the ability of this undisclosed amount of money to slip through the cracks and make its way back onto the street?

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