BUZZ
CRIME
Cash Me If You Can
AMONG THE MANY BUSINESSES THAT HAVE BEEN PUNISHED BY THE PANDEMIC ARE THE CITY’S DRUG CARTELS, WHICH ARE DEALING WITH CRIPPLING SHORTAGES AND FEWER WAYS TO LAUNDER DIRTY MONEY BY JA S O N M C G A H A N
T
H E C ORONAV I RUS has
cash seizures, as easily as shooting devastated the business fish in a barrel. landscape of Los AngeThe Black Market Peso Exchange les, leaving no sector of makes use of money brokers and legitthe economy unharmed, imate trade to disguise proceeds from not even the drug trade. illegal sources. Robert E. Dugdale is Since most retail shops were ordered all too familiar with the process. As shut across California on March 19, an assistant U.S. attorney in Los Angedrug-trafficking organizations operles in 2014, Dugdale prosecuted busiating in the city have faced a serious nesses in the Fashion District that dilemma: how to launder their ill-gotwere charged with taking bulk cash ten gains and funnel them back to the funneled by drug cartels for clothing cartel bosses in Mexico. exported to Mexico. Two of the compaThe pandemic has thrown a wrench nies were owned by brothers living in into a sophisticated scheme Westwood and Beverly Hills. known as the Black Mar“The basic goal for the ket Peso Exchange, which drug cartel is to realize the helped establish L.A. as the revenue from its drug sales The DEA epicenter of cartel money in the United States without has seized laundering operations in having to physically smugthe United States. The DEA gle bulk currency across the over $9.5 says it is one of the most sucborder, where the chances million cessful such systems ever of its seizure by law enforcein cartel devised. This spring stash ment are at their highest,” cash since houses and other hiding Dugdale says. places were practically overTrade-based money launMarch. flowing with drug money— derers depend on legitimate and with all nonessential businesses to help launder businesses closed, there was suspect funds. So when the no one to clean the dirty loot and safetrade they rely on dries up overnight, guard its transfer to Mexico. the whole narcotics industry goes into So cartels have had to revert to an a panic. In March, when the Fashion old-fashioned way of moving cash: District—the purported epicenter of packing it in the back of a vehicle, the epicenter of underworld banking in driving it to the border, and hoping the United States—was shuttered in the for the best. The risky business has wake of the pandemic, the Drug Enforcenot escaped the attention of federment Administration began hearing al drug enforcement agents in Los through the grapevine that cartels operAngeles, who in the early weeks of ating in the area were desperately seekthe lockdown kept their ears to the ing new ways to launder growing piles ground and made a series of major of cash. Between March and early May, 14 L A M AG . C O M
while the Southern California economy was reeling, the DEA seized more than $9.5 million in cash as it was headed for the border, more than double the $4.6 million that the feds nabbed during the same period last year. Until recently the cartels knew better than to travel with copious amounts of dough, and such big busts were rare. But between late April and late May, the DEA hit the jackpot with four massive drug busts that each netted a million dollars of dirty cash. The seizures occurred in Long Beach and Cerritos, in L.A. County; Anaheim, in Orange County; and Wildomar, in Riverside County. According to the DEA, the money was found in the possession of couriers who work for the dueling multinational drug traffickers that control California’s border with Mexico: the Sinaloa Cartel and the Car-
