Illicit Finance

Houston is one of the most significant money laundering areas in the United States. Houston's proximity to Mexico as well as its role as a global financial center renders it particularly vulnerable to drug money laundering. Bulk transportation of illicit proceeds is the most common money laundering method used by drug traffickers in Houston. Bulk cash is often consolidated by traffickers at stash houses in Houston and subsequently transported through South Texas ports of entry (POEs) to Mexico for eventual repatriation. Traffickers also engage in other money laundering activities within the HIDTA region, including commingling illicit proceeds with legitimate business funds generated at cash-intensive businesses, using money services businesses (MSBs) and informal value transfer systems (IVTSs), purchasing tangible assets, and gambling. Traffickers commonly use several methods of money laundering concurrently in an attempt to mask illicit proceeds.

Houston is a key staging area for illicit bulk cash smuggling operations. Recent government analyses estimate that between $8.3 billion and $24.9 billion is smuggled out of the country by Mexican and Colombian DTOs across the U.S.-Mexico border, primarily in bulk through South Texas POEs, including Brownsville, Laredo, Rio Grande City, and Roma. It is quite likely that a large percentage transits the Houston metropolitan area en route to South Texas and Mexico.

Traffickers in the region exploit traditional financial institutions and MSBs in Houston to transfer illicit funds to international locations, including Mexico and South American countries. Traffickers in the region also use IVTSs, including hawala and the Black Market Peso Exchange (BMPE) to transport illicit proceeds out of the United States to other countries. Owing to the secretive nature of IVTSs and BMPE, the amount of drug proceeds laundered through these systems is unknown, and the close-knit relationships within these networks impede law enforcement efforts to disrupt or infiltrate IVTS operations. Colombian DTOs are the primary traffickers that use the BMPE, while Asian DTOs are the primary organizations that use hawala.

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