Category Archives: Border

The Orchestra of Baja California & Celso Piña

One of the fascinating things about Tijuana is its way of absorbing almost anything and anyone from anywhere.

It has a long history of doing so, most recently with several thousand Haitians immigrants, who’ve crossed nine borders, coming up from Brazil, to arrive looking for U.S. asylum, which they did not get and so they stayed in Tijuana and have been melting into the city.

I’ve written a lot about the new Tijuana that has emerged in the last 10-15 years, focusing for a while on opera, which I wrote about in my second book, Antonio’s Gun and Delfino’s Dream: True Tales of Mexican Migration.

More recently, I’ve written about the city’s gradual turn away from making money from migration and vice tourism and toward a higher level of entrepreneurial effort to cater to the local consumer market.

As part of all of the above, the Orchestra of Baja California — which itself has its roots in a Russian orchestra that was imported to the city in 1992 with help from Eduardo Garcia Barrios, the group’s conductor for many years — this week put out an album backing accordionist Celso Piña.

Piña, born in Mexico, has made a career of playing Mexican norteño and tropical cumbias from Colombia.

The orchestra, now under the direction of Armando Pesquiera, held three concerts with Piña. Give a listen …

 

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Filed under Border, Culture, Mexico

Manny’s Delivery Service

Couple weeks ago, I spent a morning in federal court in Los Angeles to learn a little more about drug underworld ingenuity.

Federal agents had busted an enterprise known as Manny’s Delivery Service, an organization that they alleged distributed heroin across the San Fernando Valley to customers who’d call in and place their orders.

Manny was the street name of the lead defendant, Sigifrido Gurrola Barrientos (see photo).

These guys reportedly used Uber to transport the proceeds – $129,000 in one instance, according to the indictment. (Read the press release here.)

They seemed to replicate the system that was perfected and taken nationwide by the folks from Xalisco, Nayarit, which I wrote about in my book, Dreamland.

As it turns out, according to defense attorneys, Manny’s was allegedly run by fellows from the Mexican states of Puebla and Guanajuato, which are not states I’ve associated with drug trafficking. Not sure where Mr. Gurrola Barrientos is from. But it’s not surprising the business model would be used by others. There’s no trademark or copyright in the underworld.

I was intrigued by the case as well because I’m fascinated by all the ingenuity displayed in that vast, profit-motivated culture of drug trafficking, particularly from Mexico.

In the 1990s, American medicine began to claim that opiate painkillers could be prescribed virtually indiscriminately, with little risk of addiction to patients. The result over the next two decades was a huge increase in our national supply of painkillers.

That happened without anyone realizing that our heroin market had also shifted during those years. Most of our heroin now came not from the Far East (Turkey, Burma, Afghanistan) but from Latin America – Colombia and, today especially, from Mexico. It got here cheaper and more potent than the Far East stuff.

Truth is, though, most Mexican traffickers for years cared little for heroin, which they viewed as decidedly scuzzy and back-alley and with a relatively small market of tapped-out users in the United States. So they focused more on cocaine and meth, and pot, of course.

Then we began creating scads of new opiate addicts with this expansion of indiscriminate prescribing of narcotic painkillers.

That, in turn, awoke an underworld version of Fedex, and unleashed the powerful and ingeniously creative forces of the Mexican drug-trafficking culture, then largely dormant when it came to heroin. By the way, that’s not to say, necessarily, cartels. Just a widespread culture of drug trafficking, particularly in certain regions of Mexico.

There’s a reason why heroin exists. It’s not because it has much medicinal use. Or, better put, the painkilling benefits it does possess can be provided by other drugs at far less risk of addiction. Heroin exists because it’s a great drug if you’re a trafficker. It’s easy to make and is very condensed. It’s easy to cut – making it profitable to traffic even in small quantities. So small-scale heroin trafficking is a big part of the story of how it gets here from Mexico.

Also, heroin is one of the few drugs that makes sense to sell retail – as it creates customers who must buy your product every day, Christmas included, and usually several times a day.

Thus applying basic business-school principles to heroin vending – principles of marketing, customer service, etc – just naturally occurs to folks.

Hence Manny’s Delivery Service. And a bunch more like them.

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Filed under Border, Dreamland, Los Angeles, Mexico, The Heroin Heartland

Big News From Nayarit: Edgar Veytia arrested

In fascinating news from Mexico’s heroin world, Edgar Veytia was arrested Wednesday at the San Diego-Mexico border.

Veytia is the Attorney General for the state of Nayarit, and a figure bigger in the public mind than the state’s governor – which is rare in Mexico.

He was charged under an indictment out of New York alleging that he conspired to smuggle heroin, cocaine and methamphetamine into the United States.

Those who’ve read Dreamland know the importance of Nayarit in our heroin supply. Many have alleged that Veytia protected the heroin trade, in an alliance with a large and new cartel known as Jalisco New Generation, who has taken control of the region over the last six years.

Proceso, the Mexican new weekly, recently published this article calling him the “dark Prosecutor,” and repeating allegations that he had protected the drug trade.

Veytia began his career simply enough, as an attorney handling the taxi concessions for the city of Tepic. But in time, he was place in charge of the state’s anti-kidnapping squad and from there elevated to Attorney General.

(Stay tuned for a blog post later today about my own (brief) encounter with Edgar Veytia.)

In Nayarit, he has promoted an image of himself as a tireless, almost God-like, fighter against crime, subduing the violence that racked the state during 2010 and 2011. The governor of Nayarit named him government official of the year.

Veytia has several corridos – ballads – written about him, promoting this image. The words to one song read, in part:

“Nayarit was a war zone, body mounted and the state needed a miracle sent from the Lord above.

Edgar Veytia is the name of this miracle, who returned peace to the land, risking his life

He’s been able to let people feel better, in a peaceful state and for that I thank God.”

In February, the Mexican Marines shot it out with – and killed – a wanted leader of the Beltran Leyva Cartel — Juan Francisco Patron Sanchez, aka H2 – who lived a few doors down from Edgar Veytia in the city of Tepic, Nayarit’s capital.

A businessman in Los Angeles who is from Nayarit, in an interview in 2014, told me Veytia had him kidnapped. (More on that interview later.)

So far, it’s unclear how Veytia was at the border and able to be arrested. I suppose we’ll hear  more on that as the case unfolds.

Leaving aside the charges against Veytia, the Mexican drug trade since its origins in the 1970s has depended on political protection, collusion and corruption.

More later today when I have time to write.

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Filed under Border, Drugs, Mexico, The Heroin Heartland

Our Heroin: From Afghanistan or Mexico?

While speaking on the topic of heroin in America, I’m often asked how much of our supply comes from Afghanistan, as we’ve been in a war over there for many years.

My answer, from interviews with traffickers, cops and DEA agents, is that most of our heroin comes from Mexico.

That view was confirmed this morning by William Brownfield, the U.S. State Department’s assistant secretary for International Narcotics and Law Enforcement Affairs.

In a conference call with reporters, Brownfield estimated that 90 to 94 percent of the heroin consumed in the United States originates in Mexico, with another 2 percent or so coming from Colombia and the remainder from other countries around the globe.

That represents a massive shift in our heroin supply since roughly 1980, when a lot of our heroin came from the Far East, and had for decades.

Interestingly, Brownfield said, a lot of Afghan heroin does make it to Canada, but not to the United States, where Mexican trafficking organizations, too close by, enjoy a more advanced and efficient distribution network, and offer therefore cheaper prices.

 

Brownfield was talking about the just-issued International Narcotics Control Strategy Report (INCSR), which talks a lot about the heroin/opioid problem in America. Brownfield’s message was a positive one about cooperation between Mexico and the United states on issues of drug enforcement.

A wall of law enforcement cooperation is in place, without constructing an actual wall, he said. Serious problems existed, he said, “but we have a far better architecture to address them today than we did in years past.”

Nevertheless, his answer on heroin’s origin stunned even me. I would not have guessed the estimate would be that high.

I’ve written elsewhere about my belief that it’s unlikely that more border walls between the two countries will do much to staunch the flow of heroin into the United States. What’s really necessary is even deeper cooperation, frank discussion with Mexico that a wall and the emotion it provokes would do much to corrode.

Yet Brownfield’s response highlights two things worth mentioning.

One is that Mexico must truly step up to this challenge. Its unconscionable that such a high percentage of illegal highly addictive dope come from one country to another. China had a similar issue in the 1800s, when the British forced opium into that country, resulting in the massive addiction of Chinese people for decades after.

If border walls are insulting to Mexico, it must understand that they are proposed because of Mexico’s own failings – both with regard to law enforcement and criminal justice, and in channeling the desires of its most hardworking citizens, who then feel the need to migrate illegally to the United States.

Second is that U.S. demand for heroin grows organically out of doctors’ massive prescribing over the last 20 years of pharmaceutical narcotic painkillers – the subject of my book DREAMLAND — something that no border wall will stop, of course. Also, if we get into discussions with Mexico about this topic, soon that discussion will also turn to our very accessible market for guns, many of which then go south through a variety of channels and end up being weapons in that country’s bloody drugs wars. So if we ask a neighbor to behave with maturity, we better be willing to do the same.

We have almost 700 miles of walls along the border that separate the two countries. Drugs aren’t much trafficked through those areas that have no walls, most of which are in forbidding terrain. Our drugs, instead, are trafficked through ports of entry where walls already exist. They are trafficked in cars, trucks, and by pedestrians. With heroin, the problem is exacerbated, as I’ve written elsewhere, by the fact that is the most condensable drug, thus the most easily and profitably trafficked,and one that we now have a huge demand for.

All in all, the issue begs a binational, cooperative solution, seems to me.

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The Last Velvet Painter in Tijuana

For many years, Alfredo Rodriguez Ortiz – Argo – was among the throngs of velvet painters making a living in Tijuana painting Elvis, Marilyn, John Lennon and John Wayne.

Those were velvet’s glory days of the 1970s. Now interest in the art has fallen off considerably. He keeps at it. Painting Bob Marley and Tupak more than any others.

He’s now among the last velvet painters, and the only one, from what I can determine, who still knows how to paint Elvis Presley on velvet.

I hope you like the video.

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January 14, 2017 · 3:34 pm

Juan’s Story – The high cost of cheap prices

We came upon this taxi driver who started telling us of how, in order to build his family a house, he went to Texas to cut rock for housing facades, using a legal visa provided by his employer. Did this for three years, six days a week, 12 hours a day minimum.

Hope you like this video, which I did last week in Mexico.

Let me know what you think, either here on in the Youtube comment box. Please share it if you like it.

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Tijuana, cops, & why people leave Mexico

I have no doubt that (yet another) wall between the United States and Mexico would be a disaster. The biggest reason: it would provide Mexico’s elite with some distracting issue to point to to avoid having to address all that has made it a country that people risk death to leave.

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The other day I was in Tijuana working on another story about the deportees who have congregated in that city.

I was hanging out in the Zona Norte, a neighborhood right at the border where I suspect 90 percent of the residents have been deported. I was in a humble, cramped one-story apartment complex, where many men have rented cheap rooms – the kind of place that dots this neighborhood. (Btw, this neighborhood is a hundred yards from not one, but two walls separating the country.)

I was interviewing one of these guys, when another came to his door and said the police were there. After the interview, I went outside to the patio to find heavily armed police menacing the guys in the apartment. One had teeth clenched, right up in the face of one man whose hands were cuffed.

I don’t know the whole story here. There are a lot of good reasons why these guys were deported: DUIs, drug use, etc. Some may have been selling drugs. I don’t know. The neighborhood is full of problems, and I would understand a police officer’s frustration with it.

But I do know that to a man, every deportee I’ve interviewed has stories (plural) of cops beaten him, taking his money, insulting him for speaking English, for being a deportee, and in general using their power in a manner that would seem to have little to do with combating crime or drugs in the area. On the contrary, it does a lot to keep poor men down.

I suspect these men, while they were working in the United States and part of that workforce sending money home to Mexico, were applauded. Now they’re deported and it’s a different story.

What I saw that day was minor, really. But this minor experience gets to the bigger issue of what Mexico must do to become a place that people don’t want to leave.cropped-IMG_0910.jpg

Mexico is bereft of institutions that common Mexicans can have faith in. Mexico’s economy has been doing well, but the day prior I met two groups of people – one from Michoacan, the other from Guerrero – that had traveled up from Mexico’s interior to ask for political asylum, so scary was the violence that surrounded them.

So there’s two Mexico’s: one reflected in the (real) statistics of economic growth; the other in the (also very real) experience on the ground in many Mexican states of complete disintegration of the basic institutions of civil society.

I recently did a story for National Geographic about Ciudad Juarez and all that it did to reverse years of nightmarish violence: by investing in local infrastructure.

I have seen good Mexican cops, but there aren’t enough of them. Political parties have become the new dictatorship. City government is so lacking in funding and civil service that it – the most effective level of government in attacking poverty – is completely incompetent, and too often unaccountable. Meanwhile, Mexico seems always ready to shoot itself in the foot – to wit, the recent release of drug cartel leader and killer Rafael Caro Quintero, now marshaling forces to go to war with El Chapo Guzman in various parts of the country, including in Cd. Juarez.

(Read two related stories in the latest edition of America’s Quarterly with the views of Mexico’s central banker Agustin Carstens and its former ambassador to the U.S., Arturo Sarukahn.)

So if Mexico is inflamed at the demagoguery of one of our presidential candidates, I don’t blame it. That demagoguery – yet another wall along with it — poses real threats to the United States and its standing in the world. It would also poison relations between the two countries, thus removing an important lever with which the United States can push Mexico to change, and closing off the ways in which the countries currently and beneficially work together.

Mexico ought to strongly note its disapproval. Then it ought to turn inward and begin examining why for decades it has been a country so many poor people have risked death to leave.

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That NY Heroin

I was interested in knowing more about that huge heroin bust in New York City last week.
The seizure totaled 154 pounds  (and $2 million in cash), the largest ever in that city – larger even than the legendary French Connection bust of the 1970s (100+ pounds). Which is saying something, as New York was the U.S. heroin hub for most of the last century.heroin20n-1-web

I was surprised to see the traffickers were from Mexico.  Virtually all the heroin coming into NYC and New England has been, since the 1980s, from Colombia – that’s what I understood.

So I reached out to a law enforcement source in the NYC metro region who works heroin. The source said that while the traffickers were Mexicans, the heroin was from Colombia: “Colombians have almost totally removed themselves from the distribution directly in the US.”

This is because:

“1. Colombian communities have matured and the criminal elements have for the large part been killed, jailed or been deported.
2. The Colombian drug-trafficking organizations (DTOs) can make money still selling it to other DTO’s in Colombia and/or in Mexico and parts nearby without the fear of the long arms of US authorities. Example: If they sell to Mex DTO they make $5,000 with minimal exposure. If they sell in US directly they make $10,000, but with possible major problems.
3. For Colombians, they can make major profits if they can get it to Western Africa and/or Europe with less exposure.
4. In today’s world, post 09/11, the Achilles Heel entry point into the US is over the southwest border. That area is within the realm of the Mex DTO’s. The Colombians feel they have more control if they conduct business in their area of operation and have less problems.”
All of which is to say that what happened to cocaine in the late 1980s – Mexican DTOs took over the trade from Colombians and, fueled by those profits, began the growth into the organizations they are today – is now happening with heroin as well.
If that’s so, it’s likely there’ll be more busts like this one, given the nationwide demand nowadays for the drug generated by widespread addiction to opiate painkillers.
LINKS:                                                    #Dreamland
Photo: DEA

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Filed under Border, Drugs, The Heroin Heartland, Uncategorized

Xalisco Boys – now in northern Ohio

In case anyone thought the Xalisco Boys – the heroin traffickers from Xalisco, Nayarit, which I write about in Dreamland — were an old Screen Shot 2015-05-03 at 3.33.02 PMstory, there’s this recent bust from the Cleveland and northern Ohio areas.

The interesting part of this story is that they have apparently moved into the Cleveland market. I know they’re in Columbus, Nashville and Memphis, Indianapolis and elsewhere.

Until recently, apparently, they hadn’t made a move into northern Ohio, which seemed too close to Detroit, another heroin hotspot.

But things change in the underworld, particularly as the Xalisco Boys (delivering black-tar heroin like pizza with drivers and operators standing by) work like a lot of corporations in that they’re always competing with each other and seeking new sales territories.

Never ceases to amaze me how this system evolved and spread like a fast-food franchise – gaining special momentum after it arrived in 1998 in midwestern and Appalachian areas where pain pills were just then being massively over-prescribed.

That was the first example of a heroin distribution system discovering the market inherent in pain-pill overprescribing.

Here goes some of the above cited newspaper story:

“This group utilized numerous men to act as couriers to deliver the heroin to customers. Many of these couriers were brought illegally to the United States from the Nayarit/Tepic area of Mexico to the Painesville area with the promise of working on a farm or in an automobile garage. Once in Ohio, these individuals became couriers for the drug trafficking group, according to court documents and the FBI.”

Tepic is the capital of the state of Nayarit, which is on Mexico’s Pacific Coast. Tepic is a few miles from Xalisco, where this system started and where the guys who started the system are from.

Dreamland-HCBig

 

 

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DREAMLAND … in two weeks

Two weeks from today, my third book, Dreamland: The True Tale of America’s Opiate Epidemic (Bloomsbury Press), is officially Dreamland-HCBigreleased.

The story of this epidemic involves shoelaces, rebar, Levi’s 501s, cellphones, football, Walmart, American prosperity, with marketing, with Mexican poverty and social competition, and with the biggest swimming pool in the US and what happened when that was destroyed.

It’s about the marketing of prescription pills as a solution to pain of all kinds, and about a small town in Mexico where young men have devised a system for retailing heroin across America like it was pizza.

The tale took me from Appalachia to suburbs in Southern California, into one of the biggest drug-abuse stories of our time – and one of the quietest, and whitest as well.

Until April 21, you can buy the book presale, at a discount, at Amazon here … or at Barnes & Noble here.

It’s been a long haul, and I thank the many people I met and spoke to along the way as I put together this American saga.

Hope you like it.

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Filed under Border, Business, Drugs, Global Economy, Mexico, The Heroin Heartland

A Deportee’s Story

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The other day, I met a kid who was deported to Tijuana from Long Beach.

I’ll call him Carlos, 21.

When he was three, Carlos’s mother took him from their town in Zacatecas, Mexico. They crossed the border illegally and settled in Long Beach, where Carlos grew up and graduated from Lakewood High School.

He studied fashion design at Long Beach City College and got a job in the shipping department of American Apparel in L.A.

Then one night Long Beach police stopped a car he was in and found the driver had some drugs and took everyone in the car into custody. They put an immigration hold on Carlos and a while later he was sent back to Mexico.

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Classical music in Tijuana’s slums

Yesterday, I toured the Centro de Artes Musicales in Tijuana, a nonprofit that has set up youth orchestras in several of the worst slum neighborhoods of this sprawling town.

The CAM formed four years ago and is modeled on El Sistema, Venezuela’s youth orchestra network, which produced LA Phil director Gustavo Dudamel.

IMG_1705Kids whose parents are swap meet shoe vendors and security guards are playing in these orchestras in shantytown neighborhoods, including some of Tijuana’s worst. Caminos Verdes, which has a string section, spawned Teodoro Garcia Simental, aka El Teo, one of the city’s most insane narcos, which is saying a lot. There’s a choir in the north-end neighborhood where most of the kids are children of prostitutes in the Calle Coahuilas redlight district.

This is the next step in the evolution of classical music in Tijuana.

The story of how classical music came to Tijuana, a town that mostly used music as the soundtrack to a striptease, is fascinating.

I wrote about this in my second book, Antonio’s Gun and Delfino’s Dream.

In 1991, an astronomer and classical music fan had recently moved from Mexico City to Tijuana, where he found no classical music of any kind. But he had a Mexican friend in studying conducting in Moscow.

Together, they arranged to import an entire Russian chamber orchestra – 25 highly trained classical musicians, who left Moscow in the dead of January and arrived in sunsplashed TJ. They stayed, taught music and formed the Orquesta de Baja California and a music conservatory.IMG_1710

Like everything in Tijuana, classical music came from elsewhere. The musicians’ main support came from Tijuana’s middle classes, which are relatively large for Mexico.

From there ushered an entire movement in classical music and opera, which to me felt very underground, very punk rock – as these folks operated with an entirely DIY ethos, bracing themselves against the headwinds of the city’s dominant musical forces: the chintzy disco, techno and heavy metal that boomed from Tijuana’s many bars.

Now the CAM, 20 years later, is taking classical music to the rough neighborhoods that began as squatter settlements in so many parts of Tijuana, and some of which only recently got paved streets.

The connection to Eastern Europe, meanwhile, didn’t stop with those Russians.

Musicians from the region have continued to flow across the globe to Tijuana. Of seven female musicians in the orchestra, two are from the Ukraine, one from Armenia, and one is from Cuba, too.

Just love these stories!

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An attorney speaks to Tijuana deportees

IMG_1665I just sat through a meeting of a Mexican immigration attorney in Tijuana at a shelter for recently deported men, as she explained President Obama’s recent remaking of immigration policy.

At the Casa del Migrante in east Tijuana, Esmeralda Flores wound her way through the intricacies of US immigration law. But the cold hard facts were, she said, “that none of you are eligible” for the temporary reprieve in deportations that the president announced.

Even if you crossed again tonight, it wouldn’t make any difference, she said.

About 30 men, rough and worn out, listened as she spoke. All had to be living in the U.S. as of November 20 – ironically Mexico’s Revolution Day holiday – to be eligible; and they weren’t.

Most of the men had lived for years in the United States. Most had learned to co-exist with their illegal status.

One I met was Filiberto Ruiz, who crossed at 15, and got his first job washing dishes in Oceanside without papers. He showed me, nevertheless, his real Social Security card and California driver’s license, all obtained without legal papers.

“For years, I didn’t need a green card,” he told me. “I preferred not to have one. I knew that sooner or later I’d be going to prison and then I’d lose all that money I’d spent getting a green card.”

Ruiz, now 50, was one of those who took advantage. He got involved in drugs, was deported several times, walking back in at the border crossing in each time. Then things got rough after 9/11 and he was caught one more time and sentenced to eight years in federal prison for illegal re-entry.

All of this – Ruiz, the men at the meeting, and the hundreds of thousands just like them, the president’s speech – are the fruit of Americans’ schizophrenia and double standards when it comes to immigration, particularly the low-wage sort from Mexico.

We have spent all our time enforcing immigration law at the border, where it’s politically sexy to do so. We’ve not enforced the law on Americans – people who hire illegal immigrants, from housewives to factory owners to sandwich shops and homeowners with pools that need cleaning.

So every working-class Mexican learned this fact: Cross the border and you could live and work without too much trouble; even brushes with the law were sometimes not enough to disqualify you from living and working illegally in America.IMG_1204

Father Pat Murphy, who runs the Casa del Migrante, told me of a family in San Diego who own a pool-cleaning business, a house, with kids in school, and 25 years in America – and are illegal.

But these days all that led to that appears to have changed. Tonight it fell to Esmeralda Flores to explain the truth to the 30 or so men who sat with her.

On a related note, Tijuana is a town of deportees: My taxi driver this evening was a deportee; so was the guy who changed the shower head in my hotel room.

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New Deportees in Tijuana, in NatGeo

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This is my first story for National Geographic online  — on the large numbers of deportees who end up staying in Tijuana, the city that they and their parents first crossed through years ago with such optimism on the way to a better life.

images-1These men are everywhere in the city. You see them wandering, with ball caps and small backpacks. Most are undocumented in the country of their birth, as they’ve lost, or never had, birth certificates, Social Security cards and the like.

For Tijuana, though, the question is, how does a town that lived from the energy of people passing through to a better life absorb tens of thousands of men returning traumatized, depressed, beaten.

A timely topic given the president’s speech last night.

The piece contains fabulous photographs by Eros Hoagland. (The shots on this post are mine.)

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Fashion District drug money laundering

L.A., and the Fashion District in particular, is the “epicenter” of narcodollar money laundering, mostly by Mexican drug cartels, said authorities at a press conference today.

They came together from the FBI, DEA, IRS and US Attorney’s office to announce a bunch of arrests in the Fashion District early Wednesday and describe a scheme through which dollars are laundered into pesos.download

In one location, they came upon boxes of cash that they expected would total $35 million when they were done counting, which they weren’t by midday. They seized another $19 million in bank accounts and $10 million at a house in Bel-Air – $65 million in all.

Among all that’s interesting in this topic is the fact that virtually all of this takes place within the immigrant economic ecosystem in L.A., which has long fascinated me as it basically involves almost no native-born Americans. In this case, mostly Chinese sewing-company owners were doing business with Mexican drug traffickers.

Apparently these exchanges with Fashion District businesses on behalf of drug traffickers has become a popular way of laundering money ever since 2010 when Mexico put strict controls on the quantities of dollars that could be deposited in its banking system without being reported.

Used to be traffickers would just pack stack of dollars into a car and drive home. Now putting that money somewhere isn’t as easy. Hence this new Black Market Peso Exchange scheme.

Basically, it works thus: traffickers in the US with ill-gotten bucks find a peso broker – someone whose job it is to search out companies already selling goods into Mexico. A trafficker delivers large quantities of these dollars to Fashion District companies to pay for massive deliveries of clothes down to Mexican clothing importers who are in the scam.

“The cash never crosses the border, but the goods do,” said Robert Dugdale, chief of the U.S. Attorney’s criminal division in L.A. The Fashion District firm sends the clothes to a clothing importer in Mexico. The clothes are sold for pesos and the pesos are given to the cartel traffickers, after the broker takes a cut for himself.

A lot of this appears to depend on Fashion District clothing companies with owners who are willing to say nothing when some guy shows up with a duffel bag of cash, using only a nickname as ID.

Homeland Security had previously sent out notices to 160 companies in the district, telling them of U.S. legal reporting requirements for cash. The selection of which companies were notified “was not random,” said Claude Arnold, special agent in charge of Homeland Security Investigations here.

Apparently this scheme has sent floods of cash through the Fashion District. Be interesting to see after all this what happens to some of these companies.

One Fashion District company – Q.T. Fashions on 12th Street – allegedly laundered $140,000 in ransom money for the kidnapping of a cartel courier, a U.S. citizen, whose load of cocaine was confiscated by law enforcement. To get repaid, members of the Sinaloa Cartel kidnapped him, took him down to Mexico, tortured him and got the family to take the ransom money to QT Fashions, which allegedly got the cash down to Mexico. The hostage was eventually freed.

Photos: Stashes of cash; Source: US Attorney’s office

 

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