Billions of euros and U.S dollars

entering the U.S. in 2006 and

the first three quarters of 2007 were

exported from Latin American and

Caribbean-based countries. Information from the Federal Reserve and

statistical analysis generated from

ICE's specialized computer system

called the Data Analysis & Research

for Trade Transparency System

(DARTTS) confirm that Colombian

“casas de cambio” are being used to

physically move bulk currency rather

than through established bank-tobank transfers. DARTTS is an analytical software program that assists

agents and analysts to detect and

track potential money laundering,

contraband smuggling and trade

fraud by analyzing trade and other

data in ways not previously available.

Recent investigative analysis using

DARTTS identified bulk shipments

of euros moving from Colombia to

the United Kingdom via the United

States. From 2006-2007, Colombian

casas de cambio shipped bulk currency valued at $4.8 billion to various U.S. ports of entry. Euros and

U.S. dollars were manifested and

shipped as cargo aboard U.S.-bound

flights from Colombia. Upon arrival

to the U.S., International Transportation of Currency or Monetary

Instruments Reports are filed by

armored car couriers who transport

the currency from the U.S. airport

to banks or secured storage facilities

used by foreign exchange companies. If the currency is in U.S. dollars, it is deposited into U.S. bank

accounts belonging to U.S.-based

foreign currency establishments.

Wires are then sent to the designated bank accounts of the Colombia-based casas de cambio, thereby

converting dollars into pesos.This

mechanism can allow for the placement, layering and integration of

proceeds from known and

unknown sources into U.S. and foreign financial sectors. When the

currency is in euros, it is processed

by the U.S.-based foreign exchange

companies and ultimately sold to

European currency dealers and

shipped to Europe.

Recent trends indicate that euros are

originally smuggled from Europe to

Colombia and other South American countries. Euros in Colombia

and/or Peru are sold by Colombian

or Peruvian-based casas de cambio

to U.S.-based exchange houses and

legitimately transported into the

U.S. With the completion of the

sale, funds are wired back to the

seller.This kind of bank-to-bank

transfer converts U.S. dollars into

Colombian or Peruvian pesos. $

Financial Crime Trends: 

ICE Identifies Bulk Euro Shipments

Inside This Issue

Safeguarding America through

Financial Investigations

www.ice.gov/cornerstone

Toll-Free Tip Line:

1-866-DHS-2-ICE

Cornerstone is U.S. Immigration 

and Customs Enforcement’s (ICE)

comprehensive investigative initiative

for fighting financial crime.

The Cornerstone Report is a quarterly

bulletin highlighting key issues

related to ICE financial, narcotics and

public safety investigations.

ICE Cracks Boston,

Dominican Money 

Laundering Scheme. . . . . 2

Yemeni Currency 

Smuggling, Loan Shark 

Ring Targeted by ICE . . . . 3

ICE Investigation Uncovers

Drug Money 

Laundering Scheme. . . . . 4

Volume V: No. 1 • April 2008

New money laundering trends show euros being laundered through Colombia and the U.S.

back to Europe. 

TheCorner

Homeland Security Investigations 

Trade Transparency Unit 

stoneReport

Safeguarding America through 

Financial Investigations 

Toll-Free Tip Line: 1-866-DHS-2-ICE 

INSIDE THIS ISSUE 

Volume VII: No. 3 • Winter 2011

Combating Trade Based Money 

Laundering Through Global 

Partnerships..................... 1

What is Trade Based Money

Laundering ..................... 1

Black Market Peso Exchange

(BMPE) ........................... 1

Trade Transparency 

Units..................................... 2

Recent Investigative 

Successes................................ 3

Cornerstone is U.S. Immigration 

and Customs Enforcement's (ICE's) 

comprehensive investigative initiative 

for fighting financial crime.

The Cornerstone Report is a quarterly 

bulletin highlighting key issues related 

to ICE Homeland Security Investigations 

(HSI) financial, narcotics and special 

operations investigations.

www.ice.gov/cornerstone

U.S. Immigration

and Customs 

Enforcement 

CombaTIng Trade-baSed 

money LaUnderIng THroUgH 

gLobaL ParTnerSHIPS 

Homeland Security Investigations (HSI), the investigative 

arm of U.S. Immigration and 

Customs enforcement has been a 

leader in the pursuit of trade based 

money laundering investigations. 

due to its unique authorities and 

access to both trade and financial 

data, HSI is strategically positioned 

to combat criminal organizations exploiting vulnerabilities in the global 

trade and financial systems. 

What is Trade–based money 

Laundering? 

Trade-based money Laundering 

(TbmL) is a type of money laundering where criminals use the international trade system to disguise 

illicit proceeds by altering customs 

and banking paperwork, making it 

appear as legitimate. Unfortunately, 

vulnerabilities in the international 

trade system provide numerous 

opportunities for exploitation. 

Some criminals simply depend on 

the sheer volume of international 

trade to hide their crimes. others 

rely upon the complexity of foreign 

exchange transactions and diverse 

financing instruments to conceal 

their fraudulent activity. many traditional customs fraud methods such 

as false-invoicing, over-invoicing and 

under-invoicing commodities are often used to move value around the 

world. To further increase the value 

of their illicit funds, criminals often 

layer various schemes. 

black market Peso exchange 

one well known example of TbmL, 

used extensively by Colombian 

drug cartels to repatriate drug 

proceeds is commonly referred 

to as the black market Peso exchange (bmPe). bmPe, a type of 

TbmL, operates as an underground 

financial exchange system used to 

evade record keeping requirements 

mandated by the bank Secrecy act 

(bSa) in the U.S. as well as to evade 

Colombian bank reporting requirements, customs duties, sales tax 

and income tax. The overall scheme 

involves the purchase of U.S. export 
Billions of euros and U.S dollars

entering the U.S. in 2006 and

the first three quarters of 2007 were

exported from Latin American and

Caribbean-based countries. Information from the Federal Reserve and

statistical analysis generated from

ICE's specialized computer system

called the Data Analysis & Research

for Trade Transparency System

(DARTTS) confirm that Colombian

“casas de cambio” are being used to

physically move bulk currency rather

than through established bank-tobank transfers. DARTTS is an analytical software program that assists

agents and analysts to detect and

track potential money laundering,

contraband smuggling and trade

fraud by analyzing trade and other

data in ways not previously available.

Recent investigative analysis using

DARTTS identified bulk shipments

of euros moving from Colombia to

the United Kingdom via the United

States. From 2006-2007, Colombian

casas de cambio shipped bulk currency valued at $4.8 billion to various U.S. ports of entry. Euros and

U.S. dollars were manifested and

shipped as cargo aboard U.S.-bound

flights from Colombia. Upon arrival

to the U.S., International Transportation of Currency or Monetary

Instruments Reports are filed by

armored car couriers who transport

the currency from the U.S. airport

to banks or secured storage facilities

used by foreign exchange companies. If the currency is in U.S. dollars, it is deposited into U.S. bank

accounts belonging to U.S.-based

foreign currency establishments.

Wires are then sent to the designated bank accounts of the Colombia-based casas de cambio, thereby

converting dollars into pesos.This

mechanism can allow for the placement, layering and integration of

proceeds from known and

unknown sources into U.S. and foreign financial sectors. When the

currency is in euros, it is processed

by the U.S.-based foreign exchange

companies and ultimately sold to

European currency dealers and

shipped to Europe.

Recent trends indicate that euros are

originally smuggled from Europe to

Colombia and other South American countries. Euros in Colombia

and/or Peru are sold by Colombian

or Peruvian-based casas de cambio

to U.S.-based exchange houses and

legitimately transported into the

U.S. With the completion of the

sale, funds are wired back to the

seller.This kind of bank-to-bank

transfer converts U.S. dollars into

Colombian or Peruvian pesos. $

Financial Crime Trends: 

ICE Identifies Bulk Euro Shipments

Inside This Issue

Financial Investigations

www.ice.gov/cornerstone

Toll-Free Tip Line:

1-866-DHS-2-ICE

Cornerstone is U.S. Immigration 

and Customs Enforcement’s (ICE)

comprehensive investigative initiative

for fighting financial crime.

The Cornerstone Report is a quarterly

bulletin highlighting key issues

related to ICE financial, narcotics and

public safety investigations.

ICE Cracks Boston,

Dominican Money 

Laundering Scheme. . . . . 2

Yemeni Currency 

Smuggling, Loan Shark 

Ring Targeted by ICE . . . . 3

ICE Investigation Uncovers

Drug Money 

Laundering Scheme. . . . . 4

Volume V: No. 1 • April 2008

New money laundering trends show euros being laundered through Colombia and the U.S.

back to Europe. 

 

 

 

 

 

 

 

 

 

Safeguarding America through

stoneReport

TheCorner

Homeland Security Investigations 

Trade Transparency Unit—Continued 

goods destined for Colombia with 

proceeds from the sales of illegal 

drugs. 

The following scenario demonstrates how a Colombian cartel 

could use bmPe to launder illicit 

funds. a Colombian cartel sells 

cocaine in the U.S. and receives 

illicit U.S. dollars. The cartel then 

contacts a Colombian peso broker 

to launder their money. The peso 

broker arranges to have the illicit 

proceeds picked up from the cartel 

and placed into U.S. financial institutions, often by structuring deposits 

into various bank accounts. next, 

the peso broker finds Colombian 

importers who want to import U.S. 

goods, and U.S. exporters who will 

export goods to Colombia. 

once these relationships are established, the peso broker uses the 

illicit proceeds already embedded in 

the U.S. banking system to pay the 

U.S. exporters for the shipments to 

Colombia. Therefore, the illicit proceeds never leave the U.S. The peso 

broker then directs the exporter to 

ship his goods to a specified Colombian importer. The Colombian importer receives the goods and then 

pays the Colombian peso broker in 

pesos for the shipment. The peso 

broker then returns the clean pesos 

to the drug cartel. all of the participants benefit from the transaction 

by either increasing their sales and/ 

or charging a fee for their participation. In addition, the Colombian 

importer can easily falsify its invoices reducing or avoiding Colombian 

customs duties. 

Trade TranSParenCy UnITS 

When it comes to TbmL, one 

of the primary factors criminals rely on besides the 

complexity of the international trade 

transaction is the idea that a customs agency can only see one side 

of a trade transaction. For example, 

if a U.S. exporter sends $1 million 

dollars worth of computers to brazil, 

U.S. customs officers do not know 

what is being reported upon entry 

to brazil. a brazilian importer in collusion with the exporter could easily 

Red flag indicatoRs 

of tRade-based 

money laundeRing 

•		 Payments to a vendor made by 

unrelated third parties 

•		 Payments to a vendor made via 

wire transfers from unrelated 

third parties 

•		 Payments to a vendor made 

via checks, bank drafts, postal 

money orders or travelers 

checks from unrelated third 

parties 

•		 Suspected or known use of 

shell companies and related 

accounts 

•		 Unexplained, repetitive or 

unusual patterns of wire activity 

•		 False reporting: such as 

commodity misclassification, 

commodity over-valuation or 

under-valuation 

•		 Carousel transactions: 

the repeated importation and 

exportation of the same 

high-value commodity 

•		 Commodities being traded not 

matching businesses involved 

•		 Unusual shipping routes 

or transshipment points not 

making economic sense 

•		 Packaging inconsistent with 

commodity or shipping method 

•		 double-invoicing 

•		 discrepancies between invoiced 

value of the commodity and the 

fair market value 

•		 Payment for the goods either 

in excess or below known 

market value 

•		 Size of the shipment 

inconsistent with the average 

volume of business 

2 Winter 2011 
Billions of euros and U.S dollars

entering the U.S. in 2006 and

the first three quarters of 2007 were

exported from Latin American and

Caribbean-based countries. Information from the Federal Reserve and

statistical analysis generated from

ICE's specialized computer system

called the Data Analysis & Research

for Trade Transparency System

(DARTTS) confirm that Colombian

“casas de cambio” are being used to

physically move bulk currency rather

than through established bank-tobank transfers. DARTTS is an analytical software program that assists

agents and analysts to detect and

track potential money laundering,

contraband smuggling and trade

fraud by analyzing trade and other

data in ways not previously available.

Recent investigative analysis using

DARTTS identified bulk shipments

of euros moving from Colombia to

the United Kingdom via the United

States. From 2006-2007, Colombian

casas de cambio shipped bulk currency valued at $4.8 billion to various U.S. ports of entry. Euros and

U.S. dollars were manifested and

shipped as cargo aboard U.S.-bound

flights from Colombia. Upon arrival

to the U.S., International Transportation of Currency or Monetary

Instruments Reports are filed by

armored car couriers who transport

the currency from the U.S. airport

to banks or secured storage facilities

used by foreign exchange companies. If the currency is in U.S. dollars, it is deposited into U.S. bank

accounts belonging to U.S.-based

foreign currency establishments.

Wires are then sent to the designated bank accounts of the Colombia-based casas de cambio, thereby

converting dollars into pesos.This

mechanism can allow for the placement, layering and integration of

proceeds from known and

unknown sources into U.S. and foreign financial sectors. When the

currency is in euros, it is processed

by the U.S.-based foreign exchange

companies and ultimately sold to

European currency dealers and

shipped to Europe.

Recent trends indicate that euros are

originally smuggled from Europe to

Colombia and other South American countries. Euros in Colombia

and/or Peru are sold by Colombian

or Peruvian-based casas de cambio

to U.S.-based exchange houses and

legitimately transported into the

U.S. With the completion of the

sale, funds are wired back to the

seller.This kind of bank-to-bank

transfer converts U.S. dollars into

Colombian or Peruvian pesos. $

Financial Crime Trends: 

ICE Identifies Bulk Euro Shipments

Inside This Issue

Financial Investigations

www.ice.gov/cornerstone

Toll-Free Tip Line:

1-866-DHS-2-ICE

Cornerstone is U.S. Immigration 

and Customs Enforcement’s (ICE)

comprehensive investigative initiative

for fighting financial crime.

The Cornerstone Report is a quarterly

bulletin highlighting key issues

related to ICE financial, narcotics and

public safety investigations.

ICE Cracks Boston,

Dominican Money 

Laundering Scheme. . . . . 2

Yemeni Currency 

Smuggling, Loan Shark 

Ring Targeted by ICE . . . . 3

ICE Investigation Uncovers

Drug Money 

Laundering Scheme. . . . . 4

Volume V: No. 1 • April 2008

New money laundering trends show euros being laundered through Colombia and the U.S.

back to Europe. 

Safeguarding America through

stoneReport

TheCorner

Homeland Security Investigations 

Trade Transparency Unit—Continued 

change the paperwork to reflect the 

value of the shipment as $500,000. 

This would allow the brazilian importer to justify a reduced payment 

of $500,000 to the U.S. exporter, 

transferring $500,000 additional 

dollars in value to brazil. 

This example is a typical TbmL 

scheme called undervaluing. by 

invoicing the goods below the fair 

market value, the exporter can 

transfer value to the importer. once 

the importer sells the goods, he 

will receive the full value of merchandise. In this example, since the 

importer only paid $500,000 to the 

exporter, he still owes the exporter 

$500,000 because the true value of 

the shipment was $1 million. This 

portion of the debt can be settled 

using a parallel banking market 

like the bmPe or a similar brazilian 

black market scheme called Dolerios. However, if both the U.S. and 

brazilian custom agencies could see 

each other’s trade paperwork, the 

transaction becomes transparent, 

allowing law enforcement personnel 

to identify fraudulent transactions 

indicative of money laundering and 

other crimes. 

This transparency is the theory 

behind the initiation of HSI’s Trade 

Transparency Unit (TTU) initiative. 

The TTU is a collaborative effort 

among HSI, U.S. Customs and 

border Protection (CbP), the department of State and department 

of the Treasury. The first TTU was 

established in Washington d.C. at 

HSI headquarters. at that time, HSI 

began identifying countries who 

were interested in partnering and 

sharing trade data. Currently, HSI 

has developed partnerships with 

argentina, brazil, Colombia, mexico, 

Panama and Paraguay. Through 

these relationships, HSI and foreign 

TTUs exchange trade data, allowing visibility to both sides of a trade 

transaction. 

HSI TTUs bring worldwide recognition to the threat of trade-based 

money laundering and HSI’s efforts 

to combat and prevent this threat. 

recognized as the best mechanism 

to combat trade based money laundering, TTUs have been highlighted 

in numerous U.S. government 

publications including the National 

Money Laundering Threat Assessment, the Department of Treasury 

National Money Laundering Strategies and the Department of State’s 

International Narcotics Control 

Strategies. 

Using specialized software and proven investigative techniques, officers 

can analyze trade and financial data 

to help identify trade transactions 

and other information that does 

not follow normal patterns. To help 

conduct this analysis, HSI has developed a specialized computer system 

called the data analysis & research 

for Trade Transparency System 

(darTTS). This program is used by 

both HSI and foreign TTU partners 

to help identify indicators of money 

laundering, customs fraud, contraband smuggling, and the evasion of 

duties and taxes. 

by establishing these international 

partnerships, TTUs offer another 

means to link global customs and 

law enforcement agencies together, 

expanding networks to help combat 

transnational crime. over the past 

several years, these joint efforts 

have identified and disrupted the activities of criminal organizations engaged in fraudulent trade schemes, 

bmPe, money laundering, and illegal exportation of goods, resulting 

in multiple arrests and seizures of 

millions of dollars of proceeds and 

merchandise. 

reCenT InveSTIgaTIve 

SUCCeSSeS
 

HSI, as part of the Joint Terrorism Task Force, initiated a 

case to investigate the suspicious exportation of electronic 

goods from miami, Fla. to Ciudad 

del este in Paraguay. Cuidad del 

este borders argentina and brazil, 

and is part of a region often referred 

to as the Tri-border area. one of 

the largest duty-free zones in the 

world, Ciudad del este is also a 

South american smuggling hotspot 

Winter 2011 3 
Billions of euros and U.S dollars

entering the U.S. in 2006 and

the first three quarters of 2007 were

exported from Latin American and

Caribbean-based countries. Information from the Federal Reserve and

statistical analysis generated from

ICE's specialized computer system

called the Data Analysis & Research

for Trade Transparency System

(DARTTS) confirm that Colombian

“casas de cambio” are being used to

physically move bulk currency rather

than through established bank-tobank transfers. DARTTS is an analytical software program that assists

agents and analysts to detect and

track potential money laundering,

contraband smuggling and trade

fraud by analyzing trade and other

data in ways not previously available.

Recent investigative analysis using

DARTTS identified bulk shipments

of euros moving from Colombia to

the United Kingdom via the United

States. From 2006-2007, Colombian

casas de cambio shipped bulk currency valued at $4.8 billion to various U.S. ports of entry. Euros and

U.S. dollars were manifested and

shipped as cargo aboard U.S.-bound

flights from Colombia. Upon arrival

to the U.S., International Transportation of Currency or Monetary

Instruments Reports are filed by

armored car couriers who transport

the currency from the U.S. airport

to banks or secured storage facilities

used by foreign exchange companies. If the currency is in U.S. dollars, it is deposited into U.S. bank

accounts belonging to U.S.-based

foreign currency establishments.

Wires are then sent to the designated bank accounts of the Colombia-based casas de cambio, thereby

converting dollars into pesos.This

mechanism can allow for the placement, layering and integration of

proceeds from known and

unknown sources into U.S. and foreign financial sectors. When the

currency is in euros, it is processed

by the U.S.-based foreign exchange

companies and ultimately sold to

European currency dealers and

shipped to Europe.

Recent trends indicate that euros are

originally smuggled from Europe to

Colombia and other South American countries. Euros in Colombia

and/or Peru are sold by Colombian

or Peruvian-based casas de cambio

to U.S.-based exchange houses and

legitimately transported into the

U.S. With the completion of the

sale, funds are wired back to the

seller.This kind of bank-to-bank

transfer converts U.S. dollars into

Colombian or Peruvian pesos. $

Financial Crime Trends: 

ICE Identifies Bulk Euro Shipments

Inside This Issue

Financial Investigations

www.ice.gov/cornerstone

Toll-Free Tip Line:

1-866-DHS-2-ICE

Cornerstone is U.S. Immigration 

and Customs Enforcement’s (ICE)

comprehensive investigative initiative

for fighting financial crime.

The Cornerstone Report is a quarterly

bulletin highlighting key issues

related to ICE financial, narcotics and

public safety investigations.

ICE Cracks Boston,

Dominican Money 

Laundering Scheme. . . . . 2

Yemeni Currency 

Smuggling, Loan Shark 

Ring Targeted by ICE . . . . 3

ICE Investigation Uncovers

Drug Money 

Laundering Scheme. . . . . 4

Volume V: No. 1 • April 2008

New money laundering trends show euros being laundered through Colombia and the U.S.

back to Europe. 

Safeguarding America through

stoneReport

TheCorner

Homeland Security Investigations 

Trade Transparency Unit—Continued 

for counterfeit goods, illegal weapons and other illicit activities. In 

december 2006, galeria Page, one 

of the large shopping centers within 

Ciudad del este, was designated 

as a Specially designated global 

Terrorist (SDGT) entity by the Office 

of Foreign assets Control, due to its 

ties to the terrorist group Hezbollah. 

once an individual or business is 

designated as an SdgT, U.S. entities 

are prohibited from conducted business with the SdgT or face criminal 

prosecution. 

as the investigation progressed, HSI 

special agents and CBP officers, 

along with JTTF taskforce members, 

determined several miami based 

freight forwarding companies were 

illegally exporting electronic goods 

to galeria Page. Working with 

TTU partners in Paraguay to verify 

paperwork, agents discovered the 

criminals concealed the true destination of the prohibited shipments 

by using fake invoices containing 

false addresses and fictitious ultimate consignees on required export 

paperwork. additionally, wire transfer payments were routed through 

various facilities to mask their true 

origin. 

as a result of the investigation, four 

individuals and three miami based 

freight forwarding companies were 

indicted on conspiracy charges for 

violating the International emergency economic Powers act (IeePa) 

and the smuggling of electronic 

goods. as of october 2010, three of 

the four have pled guilty. In addition, 

over $119 million dollars of merchandise, primarily high-end electronics, have been seized as part of 

the investigation. 

a second large scale TbmL investigation involved a bmPe scheme operating out of a Los angeles based 

toy company. drug proceeds, which 

were allegedly laundered through 

structured cash deposits, were used 

to purchase stuffed animals, including teddy bears. The toys were 

subsequently exported to Colombia 

for sale and the Colombian pesos 

generated by those sales were then 

used to reimburse the Colombian 

drug traffickers. 

In July 2010, defendants associated 

with the toy company and money 

laundering organization were indicted under charges including structuring transactions to avoid reporting 

requirements, bulk cash smuggling 

and intimidation of witnesses. In 

addition, the toy company as a 

whole was charged with conspiracy 

to launder money. based on the 

criminal indictments for structuring, 

a criminal forfeiture indictment of 

$8.6 million for structured assets 

was also filed. 

The use of trade as an instrument 

to launder illicit revenue is a complex and evolving scheme which 

will challenge law enforcement for 

decades. but with the development 

of the HSI TTU and its global partners, and the continuing commitment by HSI demonstrated by the 

steady expansion of the program, 

law enforcement can meet the ever 

changing world of TbmL. 

For additional information on the 

TTU or TbmL, please contact the TTU 

Unit Chief at TTU.TTU@dhs.gov. 

4 Winter 2011