Reported by DIEGO ORE

A Mexican mother walked into a bank in her home city of Culiacán in the Mexican state of Sinaloa, where an $8,000 remittance from the United States was waiting. She withdrew the funds in local currency, then strolled across town and deposited nearly all of it into accounts at two different banks.

Money sent home by migrant workers is a lifeline for millions of Mexicans. But the woman had never met the person who wired her the funds, nor the owners of the accounts where she took the cash. What she did know: The deal had been carefully arranged by the Sinaloa Cartel, one of the world’s largest drug trafficking groups, to repatriate profits from U.S. drug sales back to Mexico disguised as a routine remittance.

Her cut: $230 worth of Mexican pesos.

It was the start of easy money for the woman, who said she previously had struggled to make ends meet cleaning houses. Recalling that day in April 2014 for Reuters, she estimated she had earned some $17,000 over the years recruiting others into the scheme and cashing remittances totaling hundreds of thousands of dollars – but never too much or too often, so as to avoid scrutiny by banking authorities. She said a neighbor got her into the game, and that she had never met her bosses in person.

“Everything was by phone,” she said, “and the phone numbers changed every time.”

The woman showed Reuters WhatsApp messages on her phone that she said were from traffickers coordinating her remittance pickups and drop-offs. One from early 2022 said: “They are waiting for you outside. They know who you are. Give them the money.”

The Culiacán mother is part of an army of civilians recruited by the Sinaloa Cartel and other drug syndicates across Mexico to help move illicit drug profits earned in the United States south of the border. The criminal scheme essentially piggybacks on the vast legal network of money-transfer firms that help migrant laborers send money home to their families.

Remittances to Mexico, nearly all of which come from the United States, hit a record $58.5 billion last year, according to data from Mexico’s central bank. That’s an increase of $25 billion, or 74%, compared to 2018, when President Andrés Manuel López Obrador came to power. Mexico’s economy has been slow to recover from the coronavirus pandemic, a factor that has boosted migration to the United States in recent years along with the remittances that workers send home.

As legitimate remittances have ballooned, it has become ever easier for cartels to disguise their ill-gotten gains in small transfers sent to average people across Mexico who have no obvious links to organized crime, according to four U.S. and Mexican security officials.

The cartels are awash in cash from U.S. sales of fentanyl, cocaine, heroin, methamphetamines and marijuana. Presently, up to 10% of all Mexico-bound remittances may be drug money moved by criminal organizations like the Sinaloa Cartel and the Jalisco New Generation Cartel, according to a U.S. government official who works on illicit finance and asked for anonymity because he is not authorized to speak publicly on the subject. A March report by the Mexico think tank Signos Vitales estimated that at least $4.4 billion, or 7.5%, of remittances sent to Mexico last year could come from illegal activity.

Several features of the remittance sector make it an attractive vehicle through which criminal funds can enter the financial system, according to four industry executives and the Mexican and U.S. law enforcement officials. Chief among them is the worldwide reach of this network and the modest-sized cash transactions that drive it. Identification requirements for such transfers are more relaxed than those needed to set up a formal bank account or to wire significant sums of money.

Cases of crime groups using popular money-transfer services to conduct illegal activities have been documented before. Reuters reported previously on how gangs operating on both sides of the U.S.-Mexico border have kidnapped migrant workers and held them for ransom, demanding that relatives wire remittances to free them.

Read full report: https://www.reuters.com/investigates/special-report/mexico-drugs-remittances/