It looks like money-laundering has become big business for criminal gangs in multiple countries, involving three- or four-way transactions. The Daily Mail reports:
For at least the last seven years, Mexican mobsters including from El Chapo's notorious Sinaloa cartel have been paying Chinese middle-men to 'clean' money made selling drugs on America's streets in a complex scheme involving members of Beijing's elite.
Now, American lawmakers have called for an investigation into whether the Chinese Communist Party is complicit in the scheme amid warnings Xi Jinping is using America's opioid crisis as yet another weapon in his quest to establish a new world order.
. . .
According to multiple research organisations including the Brookings Institution, the scheme works like this:
First, cartel money-men in the US arrange to deliver an amount of cash with a courier working for the triads, who message their bosses to confirm when the drop has been made.
As soon as the message is received, Chinese gangsters transfer the same amount of money in Mexican pesos to the cartels - which they are then free to spend as they like.
At the same time, the triads arrange for a wealthy person in China to buy the drug dollars by transferring the same amount of Chinese currency into accounts the gangsters control.
There is huge demand for this service in China, as the government prevents people from transferring more than $50,000 out of the country each year in an effort to stop people offshoring their wealth.
This gets around the system because the money never moves across a border. The Chinese currency only moves between banks in China, and the dollars never leave the US.
And because the service is in-demand, the triads charge upwards of 10 per cent for it - which is where they make the bulk of their money.
Once the wealthy buyer has control of the dollars, they are free to spend them as they would like within America - typically on college tuition or real estate.
Finally, the gangsters sell the Chinese currency to a Mexican business which operates within China so they can buy goods using the local currency.
This service is also in-demand as China is one of Mexico's largest trading partners, and again the gangsters charge a fee.
In return, the business pays the same amount in pesos into a bank account in Mexico controlled by the gangsters, recouping the money handed over to the cartel.
'This has enriched the Mexican cartels beyond their wildest dreams,' Thomas Cindric, a retired DEA agent, told ProPublica when discussing the scheme last year.
It has also led to suspicions that the laundering operation is being carried out with either tacit support or direct involvement of the CCP.
There's more at the link.
This sounds like a criminal example of financialization - what happens when financial exchanges supersede production (i.e. industry) in importance in a nation's economy. I guess it's the same way for those controlling these currency swaps. They don't do the crime - they just profit from shuffling around its proceeds between nations.
I'd love to know how much money is involved in this, not just in the USA but all around the world. I wouldn't be surprised to learn it's in the hundreds of billions per year, and may be getting close to trillions territory. I wonder if other traditional methods of money-handling, such as the Muslim Hawala networks, have been infiltrated by criminals to make such exchanges easier?