Justice Department steps up pressure on cartels' financial networks as launderers turn to crypto

By targeting alleged money brokers — rather than street-level traffickers — prosecutors say they are aiming at a choke point they believe is essential to the cartels sustaining their operations as law enforcement pressure mounts on more visible drug routes.

“If you cut off the money, you hurt the cartels, and that’s what we’re trying to do,” A. Tysen Duva, the assistant attorney general in charge of the Justice Department's criminal division, said in an interview with The Associated Press.

Since the beginning of President Donald Trump's second administration, the Mexican government has turned over more than 90 high-level defendants with ties to cartels in three transfers now at the center of a legal debate in Mexico. The defendants were wanted by U.S. prosecutors for crimes including drug trafficking, human smuggling and money laundering.

Senior Justice Department officials say bringing cartel figures to the United States is designed to do more than be a deterrent message. It could also lead to indictments against other high-level leaders if defendants cooperate, allowing prosecutors to reach higher into cartel leadership. Under Trump's Republican administration, the Justice Department has restructured the Criminal Division to integrate narcotics prosecutors with anti-money laundering experts to better target cartels and to reflect a broader shift toward targeting the financial systems that sustain their operations.

The latest transfers to the U.S. include alleged Mexico-based money brokers, who authorities say oversee the movement of drug proceeds and pocket a percentage of the money that returns to the cartels as a commission, according to court papers. The brokers arrange for cash to be picked up in cities across the U.S. and conceal the money to get it across the border, often through digital assets as law enforcement has cut off other methods.

Prosecutors “want to hear on the distribution side how it works, who is involved, and seek additional indictments, and on the money laundering side, exactly the methods that they are using to get the money out of the United States through the U.S. banks,” Duva said. “There’s bulk cash smuggling that has been going on since the beginning of time, and then also sort of the newer trend of taking the cash, buying cryptocurrency, and then trading that cryptocurrency.”

Eduardo Rigoberto Velasco Calderon, Eliomar Segura Torres, Manuel Ignacio Correa and Cesar Linares-Orozco face money laundering conspiracy charges in indictments filed in Kentucky’s federal court. An attorney for Linares-Orozco declined to comment in an email to the AP, and no attorneys were listed in court papers for the other defendants.

The January transfer of 37 defendants from Mexico to the U.S. marked the third of its kind under Trump's second term. Observers have described the transfers as an offering by Mexican authorities to offset mounting threats by Trump to take military action against cartels.

A group of lawyers and family members of cartel figures have accused Mexico of breaking the law by sending them without an extradition order. Mexico’s government has maintained the transfers were legal, carried out in the name of national security.