Summary

NAME: MEX MONEY 20091219I TAPE: EF09/1183 IN_TIME: 11:18:54:12 DURATION: 00:02:53:20 SOURCES: AP TELEVISION DATELINE: Tijuana/Phoenix - 17/25 Nov 2009 RESTRICTIONS: SHOTLIST Tijuana, Mexico - 25 November 2009 1. Wide of soldiers and police seizing goods from a pawn shop and money-changing store during a raid 2. Soldier placing seized item onto military vehicle 3. Wide of police and soldiers conducting raid 4. Wide of money changing store with military vehicle parked outside 5. Confiscated goods in military vehicle 6. Mid of soldier placing bag onto vehicle 7. Low shot of soldiers outside money changing store 8. Mid of soldier looking through contents of car boot Phoenix, Arizona, United States - 17 November 2009 9. SOUNDBITE: (English) Matthew Allen, US Special Agent in Charge, Immigration and Customs Enforcement: "I think we've found in our investigations that they use the same techniques, compartments and practices that we see that they use to bring narcotics into the United States. So organisations that are bringing hard narcotics into Arizona from Mexico and using deep concealment in vehicles to bring those narcotics in are using the same kinds of compartments to bring the money that they earn from those narcotics back to Mexico." 10. Cutaway of name placard on desk 11. Close of baseball cap with International Customs Enforcement initials Tijuana, Mexico - 25 November 2009 12. Wide of soldiers carrying confiscated goods out of money changing store and loading onto military vehicle 13. Wide of soldiers conducting raid on store 14. Wide of military vehicle parked in front of money changing store Phoenix, Arizona, United States - 17 November 2009 15. SOUNDBITE: (English) Matthew Allen, US Special Agent in Charge, Immigration and Customs Enforcement: "Los Angeles, Chicago, New York, Atlanta, Miami; in those cities, large amounts of illicit money is collected and, in the case of Arizona, a significant amount of that comes back to a place like Phoenix for consolidation and accounting before that money is moved back to Mexico." Tijuana, Mexico - 25 November 2009 16. Exterior of raided money-changing house 17. Close of seized Jaguar vehicle with California license plate 18. Mid of soldier walking past confiscated Jaguar 19. Mid of soldiers walking past confiscated Corvette 20. Mid of soldier sitting in driver's seat of Corvette 21. Pan of soldiers helping detainees onto military truck 22. Various of detainees 23. Various of detainees being escorted by soldiers 24. Media trying to take pictures of detainees in military truck 25. Wide of soldiers and vehicles 26. Wide of street where raided store is located STORYLINE A highly touted Treasury Department programme in the United States is trying to combat the problem of cross border transfers by Mexican drug cartels from the proceeds of drug sales in the United States, which currently adds up to around 25 (b) billion US dollars a year. So far the operation, aimed at starving the Mexican drug cartels of that cash is currently blocking just three (m) million US dollars, an Associated Press investigation has found. That's in addition to 58 (m) million US dollars seized under a new initiative at the US-Mexico border. The figures suggest that 99.75 US dollars of every 100 US dollars the cartels ship south is getting through, money that is fuelling a brutal war that has killed 14-thousand people in three years. "Los Angeles, Chicago, New York, Atlanta, Miami; in those cities, large amounts of illicit money is collected and, in the case of Arizona, a significant amount of that comes back to a place like Phoenix for consolidation and accounting before that money is moved back to Mexico," Matthew Allen, US Special Agent for Immigration and Customs Enforcement, said. Bundles of 100 US dollar bills that add up to (b) billions are sneaked into Mexico each year and then laundered into ostensibly legitimate funds at car dealerships, banks, pharmacies, restaurants and resorts. The criminals stuff the proceeds from the drug sales in their shoes, tape it to their torsos, stash it under dashboards, or just wire it electronically to Mexico. The money allows cartels to pay Mexican farmers to grow more marijuana and Colombian drug smugglers to sneak in more cocaine. It bribes Mexican soldiers and US border patrol agents, and pays criminals to assassinate rival smugglers or would-be prosecutors. Louise Shelley, who directs the Terrorism, Transnational Crime and Corruption Centre at George Mason University said this method; the cartels paying ordinary citizens to smuggle cash across the border, allows them to launder the money into working capital to build and expand their operations. With eight major drug cartels operating in Mexico, their methods for moving cash south are surprisingly similar, according to AP interviews with law enforcement agents and a review of court records on both sides of the border. US dealers are given drugs on credit and, under threat of kidnapping, attacks on their family or even death, they sell their inventory and pay the smugglers back within a week or two. The smugglers then pay someone to drive the cash to a "stash house" near the border, typically in Phoenix, San Diego, El Paso or Houston. There, the cash is broken into increments of 50-thousand to 300-thousand US dollars, lowering the risk of losing an entire load in one bust, and farmed out to trusted couriers. If caught by Customs and Border Protection agents, the couriers often can forfeit the money and simply drive on; Mexican officials don't normally arrest people for failing to report money coming in. For the cartels, that risk is part of the cost of doing business. "Cartels expect that we are going to take some of that money off," said Douglas Coleman, assistant special agent in charge of the Drug Enforcement Administration in Phoenix. In efforts to combat the problem the United States in 1972 implemented a series of restrictions, including a requirement that financial institutions report deposits of 10-thousand US dollars or more. Still, authorities believe some drug smugglers use US banks to move their money. In a typical scheme known as "smurfing," drug smugglers break large cash loads into less conspicuous increments, deposit them into numerous bank accounts in the US and withdraw from those accounts at Mexican banks. In another scheme, smugglers give legitimate bank account holders a small cut to use their accounts to deposit in the United States and withdraw in Mexico. Smugglers also are starting to ship cash through the postal service and shipping companies, allowing them to track it from start to finish. Analysts say about 10 percent of Mexico's economy, the world's 13th largest, is based on cartel operations. As a result, lawmakers have refused to pass anti-laundering laws such as reporting requirements when people pay cash for mansions and luxury cars or regulations for salaries paid in cash. "In Mexico there are still some very easy ways to launder money, and there is great reluctance among lawmakers to change that," said Ramon Garcia Gibson, an expert on financial controls. "It's everywhere: businesses that aren't doing any business except to receive cartel cash and put it in the bank." US law enforcement agents have recently tried to get tough on controlling the money, searching southbound cars at the border and freezing bank accounts of cartel bosses. Assistant US Treasury Secretary David Cohen said agents were recognising the need to combat money laundering, as well as illicit drugs and weapons in the fight against the cartels. The US Foreign Narcotics Kingpin Designation Act, enacted 10 years ago, allows the president to designate individuals and corporations as drug traffickers, freezing their bank accounts and penalising people for doing business with them. Dozens of cartel-related businesses and individuals, including billionaire cartel boss Joaquin "El Chapo" Guzman, have been named. Mexican drug cartel chief Arturo Beltran Leyva, killed recently in a shootout in Cuernavaca, just south of Mexico City, had been designated a narcotics kingpin by former US President George W. Bush in May 2008. The act lets the US "strike the kingpins' international networks of front companies, facilitators and straw men," Associate Treasury Director J. Robert McBrien recently told Mexican bankers. But results, in terms of blocking assets, have been minimal. After the AP filed a Freedom of Information Act request and made repeated queries for six weeks, a US Treasury official, on condition of anonymity as required by department policy, gave the AP records showing 16 (m) million US dollars had been blocked, including 13 (m) million US dollars that was seized, from Mexican drug cartels over the past decade. Of that, three (m) million US dollars is currently being blocked. The Treasury official played down the importance of the low returns, saying the act was designed mostly as a deterrent to keep drug organisations out of the US financial system. Raymond Baker, director of the Washington-based nonprofit Global Financial Integrity, which works to curtail the cross-border flow of illegal money, said the low returns showed the scheme was a failure. "We haven't begun to curtail the flow of illicit money generated by the cartels, and as a consequence of that we have not begun to curtail the drug trade," Baker said. And while the law also allows criminal penalties of up to 10 (m) million US dollars and civil penalties of up to one (m) million US dollars for doing business with the cartels, the records show just three fines related to Mexican drug cartels.