Sunday, January 22, 2012

The Perfume Man and Chapos Stinkin Dollars

by Chivis Martinez for Borderland Beat

The sweet scent of The American Dream
From the outside gazing in, it appeared as the quintessential American Dream.  It was a perfect example of the immigration system working flawlessly.  Vikram Datta emigrated from India in 1983 becoming a naturalized American citizen 11 years later. 

It was on a business trip to Laredo in the year 2000 that Datta visited the bustling downtown merchants sector, where money and merchandise exchanged hands at a rate unimaginable in most places of the US but is business as usual for the border corridor.  Datta instantly knew a goldmine awaited him, still keeping his NY location he moved to the border city and within one year he had four very profitable stores in Laredo.

Fast forwarding another decade finds Datta the owner of a lucrative perfume business with multiple locations in NY, Laredo Tx, Arizona and California, raking in millions each month and living a life of financial success.

Datta had settled in the border town of Laredo Texas. Two of his four perfume outlets in the city are a mere stone’s throw away from the international bridge that connects Texas to the Northeast Mexican state of Tamaulipas.  The man chose to live in Alexander Estates, a community designed for the wealthy of the South Texas border city, its homes surrounded by a country club, tennis courts, Private Park and golf course. 
Careful attention was paid in designing Alexander Estates with its high walls and security guarded entrances.   Included were security features mindful of the fear generated by Texas leaders promoting the belief of drugwar “spillover violence” and Laredo’s close proximity to some of the most violent cities in Mexico.
The stench of nefarious greed, Sinaloa drug money and The Black Market Peso Exchange (BMPE)
Datta, the immigrant, and his family which included teenaged daughters, were basking in the high life of the sweet perfume of success, exemplifying the life that can be derived from good old fashioned hard work.
Or so it would seem from the outside looking in.

But as one moves closer perfume gives way to a stench of greed, the Sinaloa Cartel and the Black Market Peso Exchange.  For it was by 2009 that Datta’s career had evolved into a highly experienced money launderer for one of the world’s most wealthy individuals, Joaquín Archivaldo Guzmán Loera, better known by his moniker “EL Chapo” leader of the Sinaloa Cartel.
In New Jersey the Justice Department was executing an investigation in 2009 of a father and son perfume vendors, Ajay and Ankur Gupta.  They were suspected of a decade long dip into the BMPE domain, netting millions. 

 It was during the justice department’s operation against the Gupta’s that Datta’s name appeared in Gupta’s records so began an investigation of the Laredo perfume vendor.
During the course of the investigation the DEA learned Datta owned numerous perfume retail outlets and that all but one were situated on the United States, Mexico border.  The 11 stores were in California, Arizona, and Texas in border cities such as San Ysidro, Nogales and Laredo.

In August 2010, at a Las Vegas fragrance trade show, the Guptas introduced Datta to undercover DEA agents posing as perfume vendors from Baja California Sur, Mexico. 
Court records reveal Datta’s BMPE transactions started slowly but not for long, as they quickly escalated both in frequency and volume.  DEA inspections of Datta’s financial records disclose in a 24 month period, between January 2009 and January 2011 more than 25 million USD (US Dollars) was deposited in Datta’s bank accounts from BMPE transactions.

Transcripts from 6 months of wiretaps exposes a conversation Datta had with an undercover agent in which Datta admits, among other things, that he “move(d) cash” from his “eleven stores on the border.”  Datta further stated he was receiving “a lot of cash” from his customers on the border and that “it’s all Sinaloa money”, a reference to the Sinaloa Cartel.
The Black Market Peso Exchange (BMPE) a primary system of money laundering

"Cambio" Peso Exchange Outlet








The United States is the world’s largest drug market, generating 10-30 Billion dollars each year. Once the drug is in the hands of the US customer,  the problem shifts to laundering the vast amounts of profits and transferring them back to the country of origin. 

Laundering is the process of exchanging the profits into the currency of the country of origin.

BMPE is a complicated system system of money laundering that was created by Colombian drug traffickers in the 1980s and later adopted by Mexican cartels.   The system is called Black Market Peso Exchange in reference to its ability to exchange U.S. dollars while in the U.S. generated by cartel drug sales, for pesos in the country of origin.  By selling the dollars to Colombian businesses that procure US products for export, a system is established that launders the dollars and facilitates the skirting of extensive import fees and exchange tariffs by smuggling the products into the country.
In the early 90s Carlos Ronderos, at the time the Colombian minister for foreign trade contacted Alvin James an investigator for the US Department of Treasury regarding the smuggling of US products into Colombia.  Colombia had linked the smuggling of goods to drug money laundering (later Ronderos would testify before the US Congress about US Corporation’s involvement in BMPE). 
Until the1990s, transferring drug money was a simple process, the profits were deposited in a US bank and wire transferred back to Colombia.  It was in the 90s that the US clamped down on banks and initiated restrictions that made it impossible to use the simple method of wires to launder billions of dollars. 
Enter the peso brokers as the backbone of the solution.  Exchange brokers are small informal businesses that have been a Colombian institution for years.  One could refer to them as bankers and be correct, but unlike banks there were no questions asked about what was being purchased or questions about tariffs.  Drug profit dollars can be laundered into the U.S. financial system without suspicions or scrutiny.
Colombian drug cartels ran huge amounts of US dollars through peso brokers in the US, who then would sell them to Colombian businesses.  The outward appearance was they were bankers transferring USD to companies in the US, Panama and Aruba for payment of US exports.  The goods are then sold in Colombia by legit businesses.  They repay the peso broker for the USD, he subtracts his healthy cut, with the remainder of the pesos delivered to the drug cartel, and the money laundering mission accomplished.
In the 90s a huge controversy and legal case erupted when it was discovered large US corporations such as Philip Morris, INTEL, General Electric, Price Waterhouse and others were being used for the BMPE. 

 Their contention was that they unknowingly were involved, and according to US Laundering laws they could only be found guilty if they knew the funds were being laundered for drug cartels and were drug profits.  


 The end result was the justice system took the tactic to seize the funds, educate the companies and get them on board in the fight against the BMPE.  The Justice Department did require some companies to sign what is known as a Consent Decree, which in essence states the company now understood BMPE and if they were involved again they could not claim innocence.
That was the beginning of the Black Market but clearly not the end.  Mexican cartels and other organized crime groups have adopted and refined the system.
A kidnapping, arrest, trial and sentence
In January 2011 Datta called the undercover agent asking for his help.  A former client of Datta’s had been kidnapped in Mexico City.  He called on the agent to ask if there was something the agent could do to assist with the release of the victim.  Datta did not know this of course, but the agent had been listening in on his phone calls about the kidnapping.
The agent plays along with Datta giving details of the kidnapping.  By incredible luck for the agent, the victim was released and Datta was ecstatic and very grateful to the agent.  Datta booked a flight to New York to personally thank his friend for successfully saving his former client. 
However, when Datta arrived in New York on January 15, 2011, DEA agents were there to welcome him by arresting him and charging him for his participation in an international money laundering conspiracy. 
Mahattan US Attorney Preet Bharara stated at the time;
“Vikram Datta allegedly tried to mask dirty money, with all things the scent of perfume”.
On September 28, 2011 Datta was found guilty as charged.
The 51 year old  Datta,  was sentenced Friday in Manhattan Federal Court  to 20 years in prison.
“Datta used his perfume business to remove the stench from Mexican drug cartel money, and now he will pay a steep price for his crimes,” Manhattan US Attorney Preet Bharara said.
Aerial view of the Laredos, POE and US side on right

44 comments:

  1. Anyone know when the last time any Mexican was sentenced in Mexican Courts for laundering money?

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  2. The money isnt laundered in mexico. It is done in the us through us banks and business. The crime is done in the us so it is prosecuted in us.

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  3. Mexico is the most dis honest and corrupt country on the planet...

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  4. I guess the DEA and CIA and ATF can't launder money fast enough for the cartels.

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  5. I read this same story about a month ago in San Francisco....

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  6. That it's perfume is funny.

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  7. Excellent, timely story.

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  8. Never, pero ya tenemos en la mira a felipe calderon y a todos los gobernadores y presidentes municipales en el pais.

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  9. @4:15 pm on December 25 2011 5 people were sentenced to 15 years in prison and $69600 pesos in fines each, Filmore Vargas González, Jhony Dariel Castillo Torres, Julio Israel Ortíz Román, Ronald Guillermo Gutiérrez Andrade and Alvin Gutiérrez Andrade.

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  10. @4:15PM
    Incredibly, they are detained for money laundering very often.
    Most notably recently those arrested in connection with the Casino Royale tragedy.

    La Flaka was charged in Dec for money laundering. we can go back to Osiel and remember though charged in the US he was captured in Mexico.

    But your point is well taken, as you are specific in asking "sentenced" it has happened. but we must remember when we read of"captures" they are not true arrests, they are detainments. If there is enough evidence they will then be formally arrested and charged, then a trial then if convicted sentenced.

    in a country where only 2% of crimes go through the process and about the same of those detained go forwsrd in the process one can see most get away with murder let alone money laundering. Mexico has it ass backward, seems the guilty go free and the innocent are imprisoned, not always, but surely is not the exception....Paz, Chivis

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  11. @ 7:15
    I am the author of the article. and Datta was just sentenced on Friday so you could not have read it a month ago. Perhaps you mean of his trial? that was in September. I did quite a bit a research for this, and found Dattas story compelling because the man came in as an immigrant and captured the american dream but greed intervened. He said as much himself at his sentencing on Friday "It was because of greed".
    further, I thought the story begged to give an explanation of the Black Market Peso and how so many parties are involved for various payoffs. It is complicated and impressive. I made the chart for an easy quick reference

    I have not researched further, but I do wonder why we allow these exchange houses to exist. I googled within 30 miles of my home and there are 2 dozen. and my home in Mex ...well every block seems to have 1-3 especially around my downtown office. Paz, Chivis

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  12. @ 6:45 pm Have you ever noticed that every time the U.S. need a favor from another country they always offer money?
    Will that be corruption?

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  13. Hey Chivis,you do good work and should be paid for it! I just wonder where you get all this time?? Keep it up,very informative :)

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  14. @4:15 pm Me the 5 people I mention, Filmore Vargas González, Jhony Dariel Castillo Torres, Julio Israel Ortíz Román, Ronald Guillermo Gutiérrez Andrade, and Alvin Gutiérrez Andrade were arrested and sentenced in Mexico.

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  15. Osea que los gringos no son corruptos????? Jajajajajajajajajaja dan risa los mexicanos que escriben aqui y solo por que viven en usa se sienten americanos y defienden a los nariz de a gramo de los gueritos. Despierten gueyes el dia menos pensado los deportan y entonces pensaran diferente?????

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  16. @7:15 pm you probably read the story of Vikram Datta but this one is not the same. Good work Chivis.

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  17. @10:55 pm Que te hace pensar que son Mexicanos los que defienden a los nariz de gramo? Yo soy Mexicano vivo aquí y no me siento Gringo ni defiendo a nadie solo por vivir aquí. Tu como Mexicano le estas dando la espalda a tu propia raza solo por vivir aquí y tal vez tengas familiares viviendo en U.S.

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  18. @10:28
    PGR does indeed have the sentencing listed. 10-15 years imposed in December for money laundering, and trafficking. the bust was in DF

    but it says 5 persons, not a 6th
    vargas gonzales
    castillo torres
    Roman Ortiz (thats how they list the name)
    Gutierrez Andrade (ronald and alvin)

    was yours a separate arrest?

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  19. Chivis I got that info from a Mexican blog. http://guerracontraelnarco.blogspot.com/2011/12/sentencian-5-por-lavado-de-dinero.html

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  20. @10:28

    So are you doing the 15 years now? Or did you walk for some reason?

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  21. He obvsly was not arrested with them... Wut do u think hes checkin out the blog while hes servin 10-15yrs???

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  22. Sorry the Me was an error.

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  23. Get you facts straight on where he lived.

    Alexander estates has none of what he said in this article.

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  24. @6:11AM

    The listed amenities were provided by the Alexander Estates HOA/manaegment Co. This is info they provide for perspective home buyers.
    I only included what was already there at the time Datta owned the home. I did not include future amenities planned this year such as lighted vollyball and basketball courts.

    that said I do not live in Laredo so could not visit the estates and relied on the HOA. But since you generalized as "not having any of those things" I will stick to what they tell perspective buyers.

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  25. Security Guard Entrances? I live right across Alexander Estates and there's no estate seclusion like there is here in the Winfield Estates. This story makes it seem like he was tony montana with cameras everywhere and security guards watching at all times LOL. Anyone can just drive up to his house if he\she wanted to. Quit making Laredo look worse than it already does!!!!!

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  26. Eventually this guy would have screwed up, gotten kidnapped, smuggled into Mexico and tortured/killed.

    The Chapos are not loyal, you can make them $250 million and they will still kidnap and kill you for the slightest goofup.

    He should consider himself lucky to have emerged from this alive.

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  27. @ 2:36AM
    OH! OK JAJAJA that explains it I was confused and then thought maybe you were convicted in a separate case...happy you were just digging to get info for us! thanks so much! I went to the PGJE and PGR and found a little info and discovered it was in DF.

    11:04
    you are hilarious. making an issue of a non issue. there are now two gates in the community and yes there are security guards. sorry to burst your bubble. but it is a minor issue, all of the facts are gleened from public documents or agents representing elements in the story. court records etc

    I can only go by the information given. and honestly they have no reason to lie.
    the security guard is now full time...go to the HOA information section yourself. foot patrol guards were added due to breakins. I guess there is a curfew? that is what i was told.

    it does not matter either way...is that your focus? of all the facts of the story? you focus if or if not they have security guards? I find that very funny in an odd way. next you will say Datta was a nice guy, misunderstood, did not have 11 border outlets that raked in millions that he laundered for Sinaloa. maybe you can defend him in his appeal.

    I am believing the management as they thought they gave information to a prospective buyer, obviously thinking the perspective buyer would tour the community. ...paz, Chivis

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  28. The only Country Club in Laredo is in the Plantation Subdivison. Alexander States is not a gatted community and when I purchased my home at this community I never saw all the ammenities you mention.

    COMO DECIMOS ACA "COMO LE PONEN CREMA A LOS TACOS".

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  29. Great story as is all of your work. Keep it up! A light needs to be shined on all of this type of activity.

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  30. People have always known those perfume shops are a joke. If you go in and ask to buy perfume, they look at you like you are nuts.
    The Chinese mafia is where the real $$ game is played.

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  31. "El Fidel"a local leader for the Sinaloa Cartel in the state of Sonora was arrested.He is wanted in the United States for the murder of 11 illegal immigrants.

    Come on BB stop trying to make the Sinaloa Cartel appear only as buisness men,when they are also heartless criminals.

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    Replies
    1. FUCK EL CHAPULIN and his trash CDS!..

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  32. Read Viking funeral by Stephen cancelled great book about the BMPE

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  33. @6:06

    I just went to amazon and it is now on my kindle waiting to be read! thanks for the recomendation

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  34. Why are people changing the BB settings? I don't like it. I can no longer use the right click mouse button and the copy and paste.
    I don't like the font, I have to force my vision. I don't want to sue you in court for messing up my vision ;).

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  35. @ 3:04

    yes couldn't have said it better

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  36. @January 23, 2012 10:52 PM

    True. Ctrl-C and Ctrl-V still works, but that's stupid to take away mouse2 options.

    Or can someone tell some reason for that?

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  37. @January 24, 2012 5:46 AM Thank you, I don't type fast and some times copy and paste is useful.

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  38. Hola Fonty

    the font is plain ol common arial in regular or "normal" size. This is the New Years Miracle font.

    I bypass the default font which hurts your eyes and makes you blind.

    and it looks like the right click copy and paste is back....Paz, Chivis

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  39. Dam this article makes laredo look like a narco estates of america I think they might have all those things in plantation but wow I think tony montana chapo guzman and lazcano could be neighbors and may not even know??????????????????

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  40. Money laundering is very advanced, and very hard to uncover. Let's say a cartel develops a tourist resort and develops multi milion dollar homes for the price of a few hundred thousand per unit. The cartel then purchase the home using an american corporation registered in the Caymans as a front. They then pay taxes, resell the home again, and write of a small loss. The money is now clean. Do that 50 times a year and 100's of millions of dollars are now entered into the Mexican finacial institutions, all legal and proper. If the authorities really want to catch money launderers look for the high end realtors with the largest sales volume and FOLLOW THE MONEY!

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  41. @1:08PM
    Very true.
    And there is not enough following the money. One can follow the money and tie in to a certain former governor of coahuila. From San Antonio to the border, real estate and businesses in the names of relatives. He was referred to as the ZGovernor. It is public record. Though the BMPE is the primary avenue for drug money it clearly is not the only one used.

    When the controversary with Wells Fargo came down the Gov delcared they did not have enough resources in place to track down all the financial institutions being used freely as money launderers. I say close the peso exchange houses and institue them within various banks. thats step one. then emplement additional restrictions and resources to invesitgate.

    cartels only are in the US for two reasons
    1. worlds largest drug market
    2. financial gain from the worlds largest drug market
    additionally 60% of the US market is MJ. leagalize and regulate, close the peso exchange houses, regulate, restrict exchange to 2000 per day, move the exhange houses to banks.

    That said, I am mindful that 50% of DTOs now have moveed into other areas of crime.

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  42. Chivis,
    You make some valid points but you will never close down or regulate the peso exchange down that much.

    There are tons of Mexican legit business that buy products and commodities from the U.S. who have to exchange pesos into dollars daily to make transfers into the United States.

    They hold large amounts of pesos, but when it comes to buying the products they have to pay in dollars. Were it flactuates up and down, daily they buy on certain days.

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  43. Anon jan 27 12:16PM

    Yes, I concede you are correct of course. But one does not have to negate the other. Both can be done. The peso exchange facilities can be contracted with banks and housed within the banking facilities and under the more severe regulations of banks. This would provide the ability of business (legit) to provide currency exchange, albeit within a subcontracting structure (with banks) and with greater restrictions but also transparency.

    For over 30 years my husband I have owned and operated an international importing company in up to 12 countries (pacific rim, canada, us and at one time mexico). Payment is usually per LC or TT. LC is the “safest” from a US security perspective because it is garnered via credit issued through a bank, whereas newer or small companies use TT which is essentially immediate and direct transfer from one bank to another. With the massive amounts of international wires sent daily there is no way to scrutinize even a majority; however the US government does look for patterns and inspect those with greater inspection.

    The world is now and forever a global economy, with global distribution of goods. Banking and money exchange systems were not prepared for the onslaught of foreign currency necessitating exchange, therefore we are in catch up mode. Our government freely admits this, but it seems common sense and logic says that there are changes that can be made quickly to ascertain security and transparency in money laundering schemes. If the BMPE is the primary system used then that should be a focal point of change.

    All that said....the banks have been guilty of facilitating money washing for cartels..read below...Paz Chivis

    http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html

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