Black Market Peso Exchange Research (Draft)

Topics: Illegal drug trade, Smuggling, Manuel Noriega Pages: 8 (1662 words) Published: November 21, 2014

The Columbia Black Market Peso Exchange
CRMJ_364_DA: Money Laundering

Terri L. Quinn-Taylor

The Columbian Black Market Peso Exchange
Not many people consider the value of the Peso. In fact, when any value is usually given to the Peso, it is usually considered worthless in the mouths of many. Many times, it is give as a gift by someone who has visited Mexico, or is regarded as a “nifty” item presented at “show and tell.” To others, however, it has become a very creative and profitable way to make “dirty” money into “clean “money. In other words, the Colombian Black Market Peso Exchange (BMPE) is a very creative and effective money laundering method. According to Raymond Kelly, U.S. Customs Service Commissioner, the BMPE is “perhaps the largest, most insidious money-laundering system in the Western Hemisphere” (Zill and Bergman). There are thirteen (13) groups in Colombia alone so far and more are constantly being created faster than they taken down. While that does not sound like much; in dollars, $500 million has been intercepted by the U.S. Drug Enforcement Agency in one year alone. This scheme has been popular since the early 1990’s. What is interesting is one of the reasons that laundering money became important in the drug trade was drug traffickers did not anticipate the amount of money they would make selling drugs. The more money they would make the more time and effort they spent in counting this money and more law enforcement efforts were created in curtailing this illegal activity. Criminals ended up with copious amounts of money with no way of using this money. Increased border controls, international and intranational collaboration and new laws made the movement of money required during money laundering very risky. The Colombian Black Market Peso Exchange all but eliminated the risks associated with the “layering” stage of the money laundering process. The drugs would still get smuggled across the borders; however, the money is technically staying put. The broker is actually the one taking all of the risks, whereas the drug dealers of the US and the Drug Cartels of Colombia use the broker to buy and sell goods, drugs and US currency. In the Colombian Black Market Peso Exchange method, drugs are smuggled into the United States to be sold. After the drugs are sold, this money has to be laundered by the BMPE broker. Criminals deposit their monies into bank accounts, usually shell banks, which are controlled by the broker. Dollars are deposited in the US accounts and Pesos in the Colombian accounts. This broker actually handles all of the money and transactions, including the conversions. This individual punishment is obvious should he be shown not to be trustworthy with the Cartels in Colombia and the Gangs or mafia in the US. Nonetheless, this broker also works as an illegal importer of American goods. The entire process actually rests on this individual shoulders and the work is no longer on that the drug dealers’. The broker actually has to not only introduce this dirty money in the US market but has to smuggle US products into Colombia to be sold as well, making him/her into an international smuggler as well as a money launderer. This is not as cumbersome as it may sound because American companies are just plain eager to make money. Quite frankly, absent of legislation making it a requirement to do so, they do not seek out the source of the funds. Therefore, when a BMPE broker uses dirty money to order $50,000 worth of American refrigerators, that American company will not ask where that money is coming from unless the law states that they should have known that it was illegal money that purchased those refrigerators and now that there is some legal repercussions of said sale. When a company sells their product, especially when they are suffering from slow sells, they do not and would not question the source of those funds; they’re just happy to make the sale. General Electric is...

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Weitz, Evan, and Claiborne (Clay) W. Porter. "Understanding and Detecting the Black Market Peso Exchange." Money Laundering and Forfeiture 61 (2013): 12-18. United States Department of Justice Executive Office for United States Attorneys, Washington, D.C. 20530. 16 Apr. 2014 .
Zill, Oriana, and Lowell Bergman. "The Black Peso Money Laundering System." PBS. PBS. 19 Apr. 2014 .
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