Mexican organized crime engaged on money laundering from the illegal drug trade are on the decline, said a Latin American crime watch group.
The group, InSight Crime, attributed this decrease to the current coronavirus pandemic and constant seizures conducted by US authorities against Mexico’s crime group.
Citing a report from the Los Angeles Times, they said throughout three weeks in April, federal authorities in Los Angeles seized more than $3 million in three separate seizures of suspected drug proceeds as the coronavirus slows down trade-based money laundering schemes normally used to move such funds.
“The seizures are the clearest manifestation yet of how the virus has impacted certain money laundering systems that organized crime groups rely on to clean up their illicit proceeds,” said InSight Crime.
In the past years, Mexican crime groups relied on bulk cash smuggling to repatriate their profits from the United States.
The crime watch group added that these groups have since shifted to more sophisticated money laundering tactics like the “black market peso exchange.”
To convert dollars into Mexican pesos, a broker will purchase drug traffickers’ dollars with pesos.
According to a federal prosecutor who spoke with the Los Angeles Times, the cash is then delivered to exporters that ship goods like clothing and other things to retailers in Mexico, who sell the goods and pay the broker back in pesos.
“But with many nonessential businesses closed across the country, these elaborate schemes have been halted, leaving drug proceeds with nowhere to go and authorities with a better chance of seizing them,” InSight Crime explained.
Mexico ceased nonessential activities in the country after cases of coronavirus spiked dramatically.