CHULA VISTA, Calif. — For a company that booked $12 million in annual sales importing snacks such as chile- and lime-flavored chips from Mexico, Baja Distributors Inc.’s offices were oddly quiet.
There were no signs outside. Its small warehouse was almost empty. Phones went unanswered.
Investigators say there was a reason for the anonymity: The business was laundering money from Mexican drug traffickers. Baja Distributors, whose executives denied laundering drug money, brought more than $17 million from Mexico in 18 months.
U.S. front companies for cartels aren’t new, but U.S. officials say they took a more prominent role after Mexico capped dollar deposits in cash at $7,000 a month for businesses in 2010, later raised to $14,000.
As a result, they say, cartels sought companies to deposit money in American banks and wire it back in pesos under the guise of international trade.
San Diego, the largest American city on Mexico’s border, became a magnet for cash coming to the country from Mexico, according to an Associated Press analysis of customs declarations since 2009.
Mexican President Enrique Peña Nieto lifted the restrictions last month, saying the anti-money laundering measure harmed honest businesses. The move sparked concern among U.S. officials that cartels might go back to walking into Mexican banks to deposit sacks of drug-tainted dollars.
“If one day you have a restriction, and the next day that restriction no longer exists, one would think logically that it now becomes easier,” said Joseph Burke, head of U.S. Immigration and Customs Enforcement’s National Bulk Cash Smuggling Center.
Peña Nieto’s move came two days after U.S. agents raided businesses in downtown Los Angeles’ fashion district that were suspected of funneling drug money to Mexico. The agents seized $70 million in cash.
U.S. border inspectors have little power to stop cash, and money laundering charges are difficult to prosecute, which leads some to think the scheme will continue even without Mexico’s restrictions.
Investigators say bringing money back and forth across the border makes it more difficult for either country to track.
There was $3.73 billion declared at U.S. ports of entry from Mexico last year, up from $3.15 billion in 2009, the year before Mexican regulations took effect, according to the AP’s analysis of customs declarations. Declared money from Mexico totaled $3.96 billion during the first eight months of this year.
At San Diego’s Otay Mesa border crossing, declared cash soared from $10.6 million in 2009 to $1.17 billion in 2011 and $1.78 billion last year.
It’s unknown how much of that was legitimate trade, but the U.S. Senate Caucus on International Narcotics Control reported last year that couriers were bringing a “significant” amount of drug dollars to the U.S. through land crossings with Mexico.
