Bertrand Monnet, a business professor, spent two years filming every stage of the Sinaloa cartel's business model in Mexico for Le Monde. In this third episode, the narcos and their financial advisors in Dubai show how to launder millions of dollars.
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00:00 Bertrand Monet spent the first two parts of this series investigating the production and
00:06 sale of fentanyl.
00:09 The potent drug that killed some 130,000 people in the US last year.
00:15 The drug is a cash cow for Mexican cartels.
00:19 Especially the most powerful one of all.
00:21 The Sinaloa cartel.
00:24 2,400%.
00:26 That's the return rate on fentanyl trafficking.
00:33 But where do these billions of dollars go?
00:40 The answer lies in money laundering.
00:44 To start with, we would need two billion apartments.
00:48 And then we sell the properties and we can put the money into the bank.
01:09 Back to Culiacan, the Sinaloa cartel's stronghold in northwestern Mexico.
01:15 Monet met a leader from a major cartel clan here a few weeks ago.
01:19 He explained how the cartel exports fentanyl.
01:24 Monet showed him PowerPoint slides for his business class so he could learn about the
01:28 last phase in the Narcos' business plan.
01:31 Money laundering.
01:33 There are three phases to money laundering.
01:36 The first is called the "de-materializing" phase.
01:39 This means dematerializing the money, transforming tens of billions of dollars of cash into paperwork
01:45 across thousands of bank accounts.
01:48 To do this, Narcos inject the cash into the accounts of the thousands of businesses they
01:53 control, or deposit the money directly into complicit banks.
01:57 These techniques are well known to Mexican police and the DEA, the US anti-drug agency
02:03 that tracks the cartel.
02:05 But the Narcos are highly suspicious, so the Narcos have to immediately move to money layering.
02:11 The second phase of laundering, when they migrate their money to multiple accounts in
02:15 Mexico and other countries in order to hide it from the authorities.
02:19 Or better yet, move the money to accounts that are virtually invisible because they
02:23 are located in tax havens or offshore locations.
02:27 The third phase of money laundering is integration, when the cartel puts billions of dollars into
02:32 the local economy.
02:35 In which kind of businesses do you invest your money once it has been laundered?
02:42 [Spanish]
03:05 And in which countries do you invest the money?
03:08 [Spanish]
03:37 Eduardo says that cartels can now move money even faster by using cryptocurrencies.
03:42 Can you explain how you are paid in bitcoins?
03:46 [Spanish]
04:14 The most complex phase of money laundering is layering.
04:20 To hide their money, Narcos take advantage of the black holes of global banking.
04:26 Tax havens.
04:28 For their next meeting a few weeks later, Muneh finds Eduardo not in Culiacan, but some
04:37 14,000 kilometers away, in the most opaque of all tax havens.
04:43 Dubai.
04:45 [Music]
04:55 [French]
05:12 [Spanish]
05:15 Can you tell me what you are doing here in Dubai?
05:18 [Spanish]
05:27 And why do you choose Dubai?
05:29 [Spanish]
05:58 [Spanish]
06:11 [Music]
06:13 [French]
06:21 Dubai is a country where only the banker knows the client's name.
06:25 A banker that is bound to secrecy.
06:28 There are dozens of tax havens, many closer to Mexico than Panama, where the cartel has
06:33 been laundering money for decades.
06:35 [French]
06:44 These are the famous leaks many of us already know, like the Panama and Paradise Papers.
06:51 Plus, powerful states can exert pressure to have banking secrecy lifted, so that they
06:56 can obtain banking information on the tax evaders or criminals thereafter.
07:00 [French]
07:13 This allows, theoretically, for the exchange of information on wanted persons or assets
07:18 between states.
07:20 This is where Dubai is very useful for organized crime.
07:24 And I understood this by accompanying this narco on an important meeting he had there.
07:29 [Spanish]
07:58 [Spanish]
08:07 To invest in Dubai, narcos have to go through trust companies, which are legal financial
08:12 consulting firms set up in the Emirates.
08:15 [Music]
08:17 Moné has known Eduardo for nearly 10 years.
08:21 Eduardo has seen Moné work within sensitive areas of the cartel, meeting some of its leaders
08:26 without ever endangering the network.
08:29 So he knows Moné won't reveal names or identities in Dubai.
08:35 Eduardo agrees to let Moné pretend to be his faux partner, to listen in on meetings
08:42 with two heads of a trust company.
08:44 Eduardo knows that Moné is secretly recording the meeting on his iPhone, without the others
08:50 knowing.
08:51 [Spanish]
09:17 [Spanish]
09:24 [Spanish]
09:34 [Spanish]
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12:14 [Spanish]
12:24 But Dubai offers additional protection. It's one of the world's largest offshore real estate hubs,
12:29 where foreign-owned assets are valued at $146 billion, twice as much as in London.
12:36 However, the property of a real estate agent is not information that should be exchanged
12:42 within a judicial cooperation between two states.
12:46 So, once he has been placed in Dubai's real estate,
12:50 the cartel's money has become invisible to the United States
12:54 and can be reinvested without risk in any legal business.
12:59 [Spanish]
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14:32 [Music]
14:36 Monet did not attend the second meeting between Eduardo and the financiers,
14:41 and he doesn't know if they're now working together.
14:45 But he does know one thing.
14:50 To eradicate the trading of fentanyl, it will require more than waging war on cartels in Mexico.
14:57 States have to fight tax havens, like in Dubai,
15:00 the financial black hole that cartels rely on to launder their money.
15:04 And it has to be done quickly.
15:07 It's been five months since Monet recorded the last footage for this investigation.
15:13 More than the number of deaths caused by road accidents or firearms in the country.
15:20 And as the narcos told Monet, their next target is Europe.
15:25 [Music]