Officials say U.S. not doing good job of seizing cash headed south.
About $320,000 in neatly stacked currency was seized during one vehicle stop in Houston in February 2008.
When federal agents kicked in the door of a upscale home near Seven Lakes High School in Katy in June 2008, they found cocaine, handguns and an unexpected bonanza; $1,379,510 in cash bundled up and waiting for a short trip back to the Mexican border.
More startling were the ledgers agents found indicating the Gulf Cartel already had used the Katy operation to move $200 million in drug proceeds south of the border.
More and more, Mexican and Colombian drug cartels are turning to a low-tech, but effective, tactic to collect drug profits. They simply box up the cash, stash it in a truck or car and drive it across one of the many border crossings.
Current and former law enforcement officials say the federal government should devote more agents and equipment to search for billions of dollars hidden in vehicles headed south, as well as infiltrating the bulk smuggling operations.
“It goes back to resources,“ said Steve McCraw, director of the Texas Department of Public Safety. “They don't have enough inspectors to inspect all the loads they need to inspect going northbound. The priority's been northbound, and, obviously, it makes it more difficult to impede the movement of bulk cash into Mexico.”
Despite a series of large cash seizures in Houston, El Paso and Mexico City, the latest Justice Department report on drug trafficking estimates cartels are getting as much as $40 billion in profits out of the country each year.
Millions seized here
Houston, officials said, has become a hub for gathering and moving cash shipments to the border, due to its strategic location on a busy highway network leading to border crossings in the Rio Grande Valley, Laredo and El Paso.
“Hundreds of millions of dollars are being moved, possibly billions,” said Robert Rutt, head of criminal investigations for U.S. Immigration and Customs Enforcement in Houston. “It's hard to put your finger on what you don't see — we know what we seize.“
Rutt's agents, working with local lawmen on five investigations, seized a total of $6.5 million in Houston in the last three years, including the Katy cartel operation. As currency laws requiring U.S. banks to report cash transactions have been tightened since 9/11, criminal networks are avoiding banks and simply smuggling their cash profits to Mexico and Colombia, Rutt said.
“All cash going south is not just drug proceeds. We've seen seizures related to smuggling of stolen petroleum coming out of Mexico. A lot of the money is alien smuggling proceeds,“ Rutt said. “And we've seen money purely as capital flight ... seizures where people are trying to avoid paying taxes.”
At Laredo-area border crossings in the fiscal year that ended last September, inspectors with Customs and Border Protection seized $30.4 million in unreported currency, up from the $10.1 million the previous year.
Dollars inside diapers
Last March, Department of Homeland Security chief Janet Napolitano deployed 110 federal agents to double the border task forces investigating gun and money laundering. In addition, 13 canine teams were sent to the border, along with 28 intelligence analysts.
Hector A. Mancha Jr., a U.S. Customs and Border Protection officer in charge of bridge inspections in Hidalgo, Pharr and Mission, said officers encounter an array of smuggling compartments in vehicles searched for cash and other contraband. Cash is hidden in spare tires or diapers, taped to the smuggler's body, shoved under a seat, beneath a blanket or even in a box of laundry soap.
“You do encounter people who will say they have been paid to move the vehicle across (the border), and have very little knowledge about where the currency is coming from,“ Mancha explained. “And then you have other folks that get arrested that lawyer up real quickly, and that tells you they have some involvement. And there are others who say they don't know how half a million got into a detergent box.“
Bradley Schreiber, a former official with DHS's Office of Counter Narcotics Enforcement, said attacking drug cartel profits should have the same priority as intercepting drug shipments.
Focus is on the drugs
“It's always been big, and it's been driving the drug war was since its inception,“ said Schreiber, who now directs a Washington-area private homeland security consulting firm. “The problem is, the U.S. hasn't focused on the money as much as interdiction. We do a far better job at interdicting drugs than we do tracking and seizing money.“
On Texas highways, DPS troopers frequently make traffic stops that result in seizures of huge amounts of cash — last year they found $16.5 million, up from $12.5 million in 2008.
DPS director McCraw said local, state and federal authorities, from June 2006 through December 2009, have confiscated $105 million in the 43 counties on or near the Texas-Mexico border. During the same time, authorities intercepted 3.9 million pounds of marijuana, 49,863 pounds of cocaine, and 3,031 pounds of methamphetamine.
“In an ideal world,” McGraw said, “we'd have Border Patrol agents along the Rio Grande river and have them in such numbers and with such technology, and such equipment, it would be almost impossible for cartels to move drugs and humans across the remote areas.“