How do cartels move cash?

Cartels have developed sophisticated methods to move and launder their cash, leveraging both traditional smuggling techniques and modern financial technologies. Here are some key methods used:

1. Cryptocurrencies and Privacy Coins: Cartels convert their cash into Bitcoin and use cryptocurrency tumblers to obscure the origins of the money. They transfer the cleansed crypto into an advanced exchange where fiat currency isn't involved, converting the Bitcoin into privacy coins for increased anonymity. They can then store these funds on hardware wallets or as QR codes printed on paper, drastically reducing the bulk associated with cash and increasing security and portability. This method fully mitigates the risk of physical cash smuggling 1.

2. Bulk Cash Smuggling and Global Trade: Traditionally, cartels have physically transported bulk cash across borders to places like Mexico. From there, large amounts of cash are shipped to countries like China, where the money is used to purchase consumer goods which are then sold globally, effectively laundering the money through legitimate business activities 2.

3. Integration with Legitimate Businesses: A more indirect method involves integrating illicit funds into legitimate business channels, which may include over-invoicing or under-invoicing goods and services. For example, cartels manipulate businesses like avocado farms where they force the businesses to pay extortion money, indirectly funneling consumer spending back into their operations 3.

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     1

     Crypto Anonymity Risks

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     2

     Money Laundering Evolution

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     3

     Cartels and Avocados

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     4

     Money Laundering Logistics

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4. High-Value Goods and Private Exchanges: Cartels also use high-value goods as a means to move and launder money. They purchase items like luxury watches or diamonds, which are easy to transport and can be sold again for cash in different countries, completing the laundering cycle 4.

These methods highlight the cartels' adaptability and their increasing reliance on digital and less traceable methods of money movement and laundering, positioning them at a sophisticated crossroad of illegal activities and high-tech financial practices.