Mexican Trifecta: Drug Trafficking, Money Laundering and Remittances
As remittances to Mexico from the United States continue to boom, at least $4.4 billion of the $58.5 billion in money transfers last year may be the fruit of narcotics trafficking and other criminal activity, according to a new report.
Red flags include sharply rising remittances from areas with relatively few Mexican nationals. Minnesota, home to a Mexican-origin population of about 200,000 (barely 0.5 percent of the officially reported U.S. total), is cited as an example. Despite being on America’s northern border, the Gopher State was the third biggest cash remitter to Mexico last year behind California and Texas, which have huge Mexican populations.
“The most powerful reason to believe it’s not just Mexicans sending remittances from Minnesota is that the amount sent is equivalent to the gross annual income of all Mexicans [in the state], making it financially impossible,” stated the Mexico-based think tank Signos Vitales.
Last year, Mexico-bound remittances from Minnesota hit $4.7 billion, a 585 percent increase from five years ago.
Signos Vitales’ full report (in Spanish) – “Remittance Euphoria: Exodus, Money Laundering and Economic Boom” – also showed major remittance increases from Idaho, Maine, Montana, New Hampshire, North Dakota, Tennessee and Utah.
On the receiving end, 227 Mexican municipalities had more remittances than they had households on a monthly basis last year. The number of wire transfers to 32 of those municipalities was at least two times higher than the number of households, Signos Vitales said.
Organized crime groups in Mexico demonstrated a remarkable ability to adapt amid the COVID-19 global health crisis, and the record $58.5 billion in remittances sent to that country, primarily from the United States, presents a clear money laundering opportunity.
Citing findings by the U.S. Drug Enforcement Agency, a 2021 report to Congress by the Government Accountability Office identified increasing incidences of “wire transfers, shell and legitimate business accounts, funnel accounts, and structured deposits with money remitters in order to move money while concealing the routing of the illicit proceeds.”
Given the rampant illegality of these cash-moving activities, it’s not much of a reach to connect them to Mexican migrants involved in the lucrative cross-border narcotics trade. Note: Since 2011, Texas has charged 55,753 illegal aliens, most of them Mexicans, on a variety of drug offenses. That’s nearly 13 a day, every day, in one state. And that’s only counting the migrants who were caught.
As the Biden administration allows ever more illegal aliens into the U.S., expect the flow of remittance dollars moving south to keep climbing.