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Originally published July 22, 2014 at 10:44 PM | Page modified July 23, 2014 at 9:17 AM

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US investigators focus on money laundering linked to border crisis

Human-smuggling rings are using bank transactions to fund their activities, officials said.


Tribune Washington Bureau

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Would Mexico be more willing to patrol their side of the border if money transfers from the US depended on their... MORE
I've posted it before and I'll say it again; Follow the money. But don't stop with the smugglers and the cartels. ... MORE
This was enabled by banks like Western Union recognizing the easily forgeable Mexican Matricula card many years ago.... MORE

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WASHINGTON — The increasingly costly and divisive border crisis is pushing federal investigators to crack down on money-laundering schemes they say are being used to smuggle thousands of Central American children into the United States.

Agents from the Department of Homeland Security and the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, are targeting suspicious patterns of deposits and withdrawals through “funnel accounts” held at U.S. banks, according to two federal law enforcement officials who were not authorized to speak publicly about the topic. Human-smuggling rings are using such bank transactions to fund their activities, officials said.

In recent months, the arrests of several low-level money launderers, drivers, scouts and guides have bolstered and expanded the government’s ongoing effort, the officials added.

Nearly 57,000 unaccompanied children, mostly from El Salvador, Guatemala and Honduras, have been apprehended crossing into the U.S. since Oct. 1, overwhelming Border Patrol stations and social services. As a result, federal anti-money-laundering agents who once focused on dismantling violent drug cartels are turning their investigative firepower to human-smuggling networks.

Although smaller and less lucrative than the billion-dollar narcotics syndicates, human-smuggling rings have fueled a humanitarian crisis in several border states and created a political headache for the Obama administration.

“The agency is starting to put more energy toward dismantling these groups than they had in the past,” said Alonzo Pena, former deputy director of Immigration and Customs Enforcement from 2008 to 2010, in a telephone interview from San Antonio. The flood of children over the Southwestern border and the torrent of cash being collected to transport them have made human-smuggling rings a higher political priority, he said. “Before, making a great narcotics seizure was always looked at as much more career-enhancing than getting a load of aliens,” Pena said.

Last month, Homeland Security Secretary Jeh Johnson sent 60 additional human-smuggling investigators to field offices in Houston and San Antonio. As part of its $3.7 billion request to Congress to help deal with the influx of child migrants, the White House asked for an additional $109 million to expand Homeland Security’s anti-smuggling operations.

Homeland Security officials declined to comment Monday on the money-laundering campaign. Johnson was expected to hold a news conference Tuesday to announce progress in enforcement efforts to target human-smuggling networks in Texas’ Rio Grande Valley.

Human-smuggling networks have been difficult to uncover because the dollar amounts involved are usually smaller than those involving drugs. Smugglers, also known as coyotes, typically charge between $3,000 and $12,000 to bring a child from Central America to the U.S.

Smugglers once relied on popular money-transfer networks such as Western Union until a 2010 law-enforcement crackdown forced many to turn to traditional banks. But their bank activities are difficult to detect because the amounts are often below the $10,000 mark that triggers automatic reporting to banking regulators.

Smugglers typically set up “funnel accounts” at U.S. banks to receive money transfers as payments, often sent by would-be immigrants’ family members who are living in the U.S. Once the money is wired, the accounts are quickly drained by smugglers or their agents, and then shut down.

Smugglers prefer to use large, national U.S. banks that have branches in many different cities across the country, officials said. This allows a smuggler to open an account in one U.S. city, receive deposits electronically from family members around the country, withdraw the cash in a different city and close the account.

In May, FinCEN issued an advisory to U.S. banks on the “increased use of funnel accounts” by money launderers. It identified six “red flags” for identifying suspicious financial transactions, including accounts in Southwest border states receiving multiple cash deposits of less than $10,000 from bank branches in other parts of the country; people making deposits to the account who don’t know the account owner; and checks or wire transfers moving money from such accounts into Mexican banks.

Working with Homeland Security investigators, financial analysts from FinCEN can perform sophisticated data analysis to link bank transactions, wire transfer information, names of associates and phone numbers to generate evidence and provide additional investigative leads, experts say.

In March, Joel Mazariegos-Soto, a Guatemalan who worked at a dairy farm in upstate New York, was sentenced to five years in prison for operating an illegal “funnel account” for a human smuggling ring. In the four months before his arrest last year, investigators tracked $70,000 in payments going into the account from individuals paying to have their family members smuggled into the country, according to court documents.

Drug cartels are not directly running the human-smuggling operations, but they get a cut of the business by charging smugglers a fee for bringing people through areas under their control, said a senior U.S. law enforcement official who leads investigations into human-smuggling operations.

The Gulf cartel, one of Mexico’s oldest drug-running organizations, controls most border crossing points directly south of the Rio Grande Valley, which has seen the biggest surge in children from Central America, the official said. The Zetas, the ruthless drug and extortion paramilitary force, also operates in that section of northern Mexico, and controls key portions of the journey north from Mexico’s southern border with Guatemala, said the official, who was not authorized to speak publicly on the issue.

The cartels use scouts, makeshift checkpoints and payoffs to corrupt police officers to control their territories, which are known as “plazas.” When a smuggler brings a group of immigrants through cartel-controlled land, they must pay a fee per person. Smugglers call it paying the “plaza.” The cartels’ toll is included in the price of the journey.

“(The cartels’) main line of business is drug trafficking, but of course they are profit driven, and any activity they can make a buck from, they will seize that opportunity,” the law enforcement official said. With the number of children being smuggled north from Guatemala, Honduras and El Salvador estimated to reach 90,000 this year, the fees taken from smugglers moving children is a growing part of the cartels’ revenue, he said.



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