Human Smugglers Thrive With Help of U.S. Banks

Dan Price
AP Photo/J. Scott Applewhite

Hundreds of thousands of immigrants enter the US illegally across our southwest border every year with the help of coyotes, more formally known as human smugglers. Making this journeys isn’t cheap, and can set a migrant back anywhere from $3,000 to $7,000 depending on his or her circumstances. As a result, gangs are making upwards of $10 billion per year according to the United Nations Office of Drugs and Crime. Worse yet, Bloomberg Markets magazine will be reporting in its February issue that these profits are rolling in with the assistance of several U.S. banks.

According to evidence in a federal criminal case against a gang of 15 human smugglers and warrants from prosecutors in Arizona, Maryland, and Texas, several major U.S. banks have been used as financial conduits for the smuggling industry. These include household names such as Bank of America, Wells Fargo, and JP Morgan Chase & Co. Both Bank of America and Wachovia Bank (which was purchased by Wells Fargo) have been in serious legal trouble in the past for unwittingly facilitating the money laundering activities of Mexican drug cartels.

A report on outlined the story of two brothers who traveled from Guatemala to the U.S. First, one of them paid smugglers $1,400 to get through Mexico’s Sonoran desert and into Arizona. Then they paid the gang $5,200 by way of deposit into a Wells Fargo account to transport them to Atlanta. The smugglers then withdraw the money from bank branches, often near the Mexican border. The Arizona attorney general’s office says it documented $360 million of funds used for human smuggling that moved through Arizona-based funnel accounts from 2008 to 2013.

Federal investigators and bank compliance officers told Bloomberg that although there’s no evidence that banks have knowingly colluded with human smugglers, the institutions have fallen short on their responsibility to detect and report suspicious cash deposits and withdrawals—including money that flows through their accounts into the hands of gangs.

Banks insist that they have strong programs in place to comply with anti-money laundering (AML) requirements, but both human smugglers and drug traffickers continue to move millions—if not billions—of dollars through their coffers unnoticed. This is certainly not the first red flag for these banks. Phoenix police targeted the same transaction patterns and seized hundreds of accounts at Bank of America, JPMorgan (JPM) and Wells Fargo from 2006 to 2008. Since March 2013, Arizona prosecutors have gotten court-ordered seizure warrants to shut down 325 additional accounts suspected of belonging to smugglers at Bank of America and Wells Fargo, per Bloomberg.

Part of the problem with stopping the rampant use of both banks and money service businesses like Western Union by smugglers is the fact that there’s an inherent conflict of interest for these institutions. By heavily scrutinizing large and/or suspicious transactions, banks could lose out on significant sources of income by shutting down lucrative deposit accounts. Many smaller banks don’t or can’t invest in an adequate number of trained and experienced compliance officers. The federal government bears just as much responsibility for this lapse in security. Historically, the Department of Justice has chosen not to prosecute bank officers on criminal charges, preferring to let the Treasury Department levy astronomical fines instead for fear of destabilizing the US financial system.

“I wasn’t able to make human smuggling a priority,” said Holly Ray, who was an anti-money-laundering investigator and compliance officer at JP Morgan in San Antonio, Texas, from 2011 until August 2014, to Bloomberg.

Sylvia Longmire is a border security expert and Contributing Editor for Breitbart Texas. You can read more about the money laundering activities of Mexican drug and human smugglers in her new book, Border Insecurity: Why Big Money, Fences, and Drones Aren’t Making Us Safer.


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