Oh those wiley

[eagle7-31]

China’s Role in Black-Market Money Laundering

Illicit proceeds are the catalyst driving the tragedies surrounding the open U.S. border. Yet few realize the quiet ascendency of Chinese money launderers. They are displacing Colombians and Mexicans. Their preferred methodology is the B...

www.americanthinker.com

Chinese. But DC will look the other way.

 

[eagle7-31]

China’s Role in Black-Market Money Laundering

Illicit proceeds are the catalyst driving the tragedies surrounding the open U.S. border. Yet few realize the quiet ascendency of Chinese money launderers. They are displacing Colombians and Mexicans. Their preferred methodology is the B...

www.americanthinker.com

Chinese. But DC will look the other way.

Illicit proceeds are the catalyst driving the tragedies surrounding the open U.S. border. Yet few realize the quiet ascendency of Chinese money launderers. They are displacing Colombians and Mexicans.

Their preferred methodology is the Black-Market Peso Exchange (BMPE). It is arguably the largest and most effective money laundering methodology in the Western Hemisphere. The evolution of the BMPE is an excellent case study of how international criminal networks adapt and how China is taking over.

Ironically, the BMPE was not created to launder drug money. In 1967, Colombia enacted regulations that strictly prohibited citizens’ access to foreign exchange. Colombian merchants who wanted to import U.S. trade goods -- for example, John Deer tractors, Bell helicopters, or Marlboro cigarettes -- through legitimate banking channels had to pay stiff surcharges above the official exchange rate. To avoid these steep add-on costs, importers often turned to Colombian underground peso brokers, from whom they could buy U.S. dollars on the black market for less than the official exchange rate to finance their legitimate trade.

By the 1980s, the underground peso situation was taking on a new dimension. As U.S. cities found themselves awash in Colombian cocaine, narco-traffickers and cartels were faced with a logistical problem. They had to devise ways to launder and repatriate approximately 20 million pounds of U.S. currency they annually accumulate in North America.

The criminal organizations found a partial solution in the first law of economics. Supply met demand in the form of the BMPE.

For example, consider a Colombian drug cartel that has sold $3 million worth of cocaine in the United States. A representative of the cartel sells these accumulated dollars to a Colombian peso broker at a discount. The cartel is now out of the picture, having successfully sold its drug dollars in the United States and, in return, obtains pesos back in Colombia.

To complete the BMPE cycle, the peso broker must take two more steps. First, he directs his representatives in the United States to “place” the purchased drug dollars into U.S. financial institutions, using a variety of techniques designed to avoid arousing suspicion or triggering financial intelligence reporting.

Second, he takes orders from Colombian businesses for U.S. trade goods, arranging for their purchase using the laundered drug money he owns in the United States. Some businesses should know better. Via “willful blindness,” they don’t ask the questions they should. The broker has laundered the $3 million in drug money he purchased from the drug cartel.

This money laundering methodology was so successful that the Colombian BMPE became the premier money laundering methodology in the Western Hemisphere in the 1980s, 1990s, and the first decade of the 2000s.

In 2014 there was a turning point. A large law enforcement investigation called Operation Fashion Police showed how Los Angeles-based garment dealers took U.S. drug money and exported their product not to Colombia but to Mexico.

In addition, some of the clothing exporters mixed customs fraud into the BMPE conspiracy. “Made in China” labels were removed from thousands of imported garments. The fraud saved the co-conspirators from paying taxes on the “Made in China” imports because on paper they appeared to be “Made in the USA,” and exempt from customs duties under the North American Free Trade Act (NAFTA).


Edited for copyright violation-meister
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