How much money does drug trafficking make
By PATRICK RADDEN KEEFE JUNE 15, One afternoon last August, at a hospital on the outskirts of Los Angeles, a former beauty queen named Emma Coronel gave birth to a pair of heiresses.
The twins, who were delivered at 3: But his bride is a U.
So authorities could only watch as she bundled up her daughters and slipped back across the border to introduce them to their dad. He is a quasi-mythical figure in Mexico, the subject of countless ballads, who has outlived enemies and accomplices alike, defying the implicit bargain of a life in the drug trade: In fact, according to the Drug Enforcement Administration, Chapo sells more drugs today than Escobar did at the height of his career.
To some extent, this success is easily explained: Alone among the Mexican cartels, Sinaloa is both diversified and vertically integrated, producing and exporting marijuana, heroin and methamphetamine as well. Statistics on underground economies are inherently speculative: That range alone should give you pause.
Still, even if you take the lowest available numbers, Sinaloa emerges as a titanic player in the global black market. The drug war in Mexico has claimed more than 50, lives since But what tends to get lost amid coverage of this epic bloodletting is just how effective the drug business has become. A close study of the Sinaloa cartel, based on thousands of pages of trial records and dozens of interviews with convicted drug traffickers and current and former officials in Mexico and the United States, reveals an operation that is global it is active in more than a dozen countries yet also very nimble and, above all, staggeringly complex.
And after prevailing in some recent mass-casualty clashes, it now controls more territory along the border than ever.
How Big Is the U.S. Market for Illegal Drugs? | RAND
From the remote mountain redoubt where he is believed to be hiding, surrounded at all times by a battery of gunmen, Chapo oversees a logistical network that is as sophisticated, in some ways, as that of Amazon or U. As a mirror image of a legal commodities business, the Sinaloa cartel brings to mind that old line about Ginger Rogers doing all the same moves as Fred Astaire, only backward and in heels.
In its longevity, profitability and scope, it might be the most successful criminal enterprise in history. Chapo was born in a village called La Tuna, in the foothills of the Sierra, in His formal education ended in third grade, and as an adult, he has reportedly struggled to read and write, prevailing upon a ghostwriter, at one point, to compose letters to his mistress.
For decades, Mexican smugglers had exported homegrown marijuana and heroin to the United States. But as the Colombian cocaine boom gathered momentum in the s and U. Eventually, he caught a commercial flight back to Mexico, and shortly thereafter, he was summoned to a meeting with Chapo, who was by then an underboss in the cartel.
With the decline of the Caribbean route, the Colombians started paying Mexican smugglers not in cash but in cocaine. More than any other factor, it was this transition that realigned the power dynamics along the narcotics supply chain in the Americas, because it allowed the Mexicans to stop serving as logistical middlemen and invest in their own drugs instead.
Not five years later, he was marshaling hundreds of flights laden with cocaine for Chapo. The young pilot became a gatekeeper to the ascendant kingpin, fielding his phone calls and accompanying him on foreign trips. He and Chapo — Fatty and Shorty — made quite a pair. But byit was moving three tons of cocaine each month over the border, and from there, to Los Angeles.
The Sinaloa has always distinguished itself by the eclectic means it uses to transport drugs. Working with Colombian suppliers, cartel operatives moved cocaine into Mexico in small private aircraft and in baggage smuggled on commercial flights and eventually on their own s, which they could load with as much as 13 tons of cocaine. They used container ships and fishing vessels and go-fast boats and submarines — crude semi-submersibles at first, then fully submersible subs, conceived by engineers and constructed under the canopy of the Amazon, then floated downriver in pieces and assembled at the coastline.
These vessels can cost more than a million dollars, but to the smugglers, they are effectively disposable. In the event of an interception by the Coast Guard, someone onboard pulls a lever that floods the interior so that the evidence sinks; only the crew is left bobbing in the water, waiting to be picked up by the authorities. Moving cocaine is a capital-intensive business, but the cartel subsidizes these investments with a ready source of easy income: So marijuana tends to cross the border far from official ports of entry.
The cartel makes sandbag bridges to ford the Colorado River and sends buggies loaded with weed bouncing over the Imperial Sand Dunes into California. Michael Braun, the former chief of operations for the D. According to the D.
National Forest land to supply the market in Chicago. He personally negotiates shipments to the United States and stands by its quality, which is normally 94 percent pure. But the future of the business may be methamphetamine. During the s, when the market for meth exploded in the United States, new regulations made it more difficult to manufacture large quantities of the drug in this country.
This presented an opportunity that the Sinaloa quickly exploited. Here was a drug that was ragingly addictive and could be produced cheaply and smuggled with relative ease.
When they first started manufacturing meth, the Sinaloa would provide free samples to their existing wholesale clients in the Midwest. They wanted the market. To grasp the scale of production, consider the volume of some recent precursor seizures at these ports: When Mexico banned the importation of ephedrine, the cartel adapted, tweaking its recipe to use unregulated precursors.
Recently they have started outsourcing production to new labs in Guatemala. In the late s, Chapo hired an architect to design an underground passageway from Mexico to the United States. What appeared to be a water faucet outside the home of a cartel attorney in the border town of Agua Prieta was in fact a secret lever that, when twisted, activated a hydraulic system that opened a hidden trapdoor underneath a pool table inside the house.
The passage ran more than feet, directly beneath the fortifications along the border, and emerged inside a warehouse the cartel owned in Douglas, Ariz. As the deliveries multiplied, Sinaloa acquired a reputation for the miraculous speed with which it could push inventory across the border.
Eventually the tunnel was discovered, so Chapo shifted tactics once again, this time by going into the chili-pepper business. He sent drugs in the refrigeration units of tractor-trailers, in custom-made cavities in the bodies of cars and in truckloads of fish which inspectors at a sweltering checkpoint might not want to detain for long. He sent drugs across the border on freight trains, to cartel warehouses in Los Angeles and Chicago, where rail spurs let the cars roll directly inside to unload.
He sent drugs via FedEx. They are often ventilated and air-conditioned, and some feature trolley lines stock market microstructure and return volatility up to a half-mile to accommodate the tonnage in transit. You might suppose that a certain recklessness would be a prerequisite for anyone contemplating a career in the drug trade.
But in reality, blue-chip traffickers tend to fixate, with neurotic intensity, on the concept of risk. Now in his 60s and a grandfather, El Mayo has been in the drug business for nearly half a century and has amassed a fortune. Smugglers often negotiate, in actuarial detail, about who will be held liable in the event of lost inventory. After a bust, arrested traffickers have been known to demand a receipt from authorities, so that they can prove the loss was not because of their own negligence which would mean they might have to pay for it or their own thievery which would mean they might have to die.
Some Colombian cartels have actually offered insurance policies on narcotics, as a safeguard against loss 20 minute binary options seizure.
To prevent catastrophic losses, cartels tend to distribute their risk as much as possible. Before sending a kilo shipment across the border, logistics coordinator work from home might disaggregate it into five carloads of 20 kilos each.
Chapo and his associates further reduce their personal exposure by going in together market prediction software stock shipments, so each of those smaller carloads might hold 10 kilos belonging to Chapo and 10 belonging to Mayo Zambada.
How much money does drug trafficking make Sinaloa is occasionally called the Federation because senior figures and their subsidiaries operate semiautonomously while still employing a common smuggling apparatus.
The organizational structure of the cartel also seems fashioned to protect stock broker income canada leadership.
No one knows how many people work for Sinaloa, and the range of estimates is comically broad. Malcolm Beith, the author of a recent book about Chapo, posits that at any given moment, the drug lord may havepeople working for him.
John Bailey, a Georgetown professor who has studied the cartel, says that the number of actual employees could be as low as The way to account for this disparity is to distinguish between salaried employees and subcontractors. Even those who do work directly for the cartel are limited to carefully compartmentalized roles. But there was trade ideas stock screener sign of Chapo.
Once the discussion concluded, an emissary left the group and approached a Hummer that was parked in the distance and surrounded by men with bulletproof vests and machine guns, to report on the proceedings. Chapo never stepped out of the vehicle.
The brutal opportunism of the underworld economy means that most partnerships are temporary, and treachery abounds. To reduce the likelihood of clashes like these, the cartel has revived an unlikely custom: All of this intermarriage, one U. The surest way to stay out of trouble in the drug business is to dole out bribes, and promiscuously. The cartel bribes mayors and prosecutors and governors, state police and federal police, the army, the navy and a host of senior officials at the national level.
With most of the facility on his payroll, he is said to have ordered his meals from a menu, conducted business by cellphone and orchestrated periodic visits by prostitutes, who would ninjatrader forex interactive brokers aboard a prison truck driven by a guard.
I spoke with one drug producer who negotiated a joint venture deal with Chapo while he was behind bars.
Eventually, as the story goes, Chapo was smuggled out in a laundry cart. View all New York Times newsletters. The tacit but unwavering tolerance that Mexican authorities have shown for the drug trade over eur usd daily historical data download years has muddled the boundaries between outlaws and officials. Daylight killings are sometimes carried out by men dressed in police uniforms, and it is not always clear, after the fact, whether the perpetrators were thugs masquerading as policemen or actual policemen providing paid assistance to the thugs.
On those occasions when the government scores a big arrest, meanwhile, police and military officials pose for photos at the valedictory news conference brandishing assault weapons, their faces shrouded in ski masks, to shield their identities.
In the trippy semiotics of the drug war, the cops dress like bandits, and the bandits dress like cops. Presumably, such gargantuan bribes to senior officials cascade down, securing the allegiance of their subordinates. But in key barrier option monte carlo simulation matlab, the cartel most likely makes payments up and down the chain of command.
And then there are the Americans. Guards at the U. Paradoxically, one explanation for this state of affairs is the rapid expansion of border forces following the creation of the Department of Homeland Security. In their hurry to fortify the U.
In some instances, job offers have 1001 ways to make money as a speaker extended to the immediate relatives of known traffickers. When corruption fails, there is always violence. But Sinaloa has risen to pre-eminence as much through savagery as through savvy.
But the reality is that in a multibillion-dollar industry in which there is no recourse to legally enforceable contracts, some degree of violence may be inevitable.
The most gratuitous practitioners of violence right now would be the Zetas, a rampaging league of sociopaths with a notable devotion to physical cruelty. The Zetas are a new kind of cartel, in that they came somewhat late to the actual business of smuggling drugs.
Illegal drug trade - Wikipedia
They started out as bodyguards for the Gulf Cartel before going into business for themselves, and they specialize in messaging through bloodshed. Sinaloa is responsible for a great deal of carnage as well, but its approach to killing has traditionally been more discreet. Whereas a Sinaloa subsidiary allied with a Tijuana farmer known as the Stewmaker, who dissolved hundreds of bodies in barrels of lye, the Zetas have pioneered a multimedia approach to violence, touting their killings on YouTube.
One strategic choice facing any cartel is deciding when to intimidate the civilian population and when to cultivate it.
Sinaloa can be exceedingly brutal, but the cartel is more pragmatic than the Zetas in its deployment of violence. They want the big business — and the big business is in the United States. Just how active the cartel is north of the border is a divisive question.
Special Reports - Do The Math - Why The Illegal Business Is Thriving | Drug Wars | FRONTLINE | PBS
Inthe D. They spotted the foil in Los Angeles first, then in Oklahoma, Chicago, Atlanta and New Jersey. But some observers question the extent to which the perpetrators in these cases were actually working for the cartel.
Often, the gatekeepers and logistics men that the D. But this was more true of high-level importers dealing in kilos than run-of-the-mill retailers pushing grams. When The Associated Press tracked down Otis Rich, a Baltimore dealer who was ensnared in one of the operations, he answered the obvious question with a telling reply: When you adjust for all that added risk, the windfall starts to seem less alluring. What Sinaloa does do inside this country is ferry drugs along highways to regional distribution hubs, where they are turned over to trusted wholesalers, like the Flores twins of Chicago.
Pedro and Margarito Forum earnings on binary options without attachments grew up in a Mexican-American enclave of the city during the s. Their father and an older brother had moved drugs for Sinaloa, and by the time the twins were in their 20s, they had gone into business as distributors, purchasing cocaine and heroin directly from Mexican cartels, then selling to dealers throughout the United States.
The kingpin is an intimidating interlocutor; one criminal who has negotiated with him face to face told me that Chapo tends to dominate a conversation, asking a lot of questions and compensating for his short stature by bouncing on the balls of his feet. But the meeting went well, and before long, the brothers were distributing around two tons of Sinaloa product each month. This might seem unlikely, given the pervasive distrust in the underworld, but the narcotics trade is based on a robust and surprisingly reliable system of credit.
In a sense, a cartel like Sinaloa has no choice but to offer a financing option, because few wholesale buyers have the liquidity to pay cash upfront for a ton of cocaine. One convicted Sinaloa trafficker told me that it often took him more time to count the money he collected from his customers than it did to actually move the product. It may also help that the penalty for defaulting could involve dismemberment. As wholesale buyers, the Flores brothers occupied a crucial bottleneck between the cartel and its consumers.
They grew so indispensable, in fact, that after taking delivery of a shipment of drugs, they could retroactively bargain down the price. Then he added something significant: For the Sinaloa cartel, pushing product north into the United States is only half the logistical equation.
So while politicians tend to focus on cartels primarily as importers of drugs, the narcos also devote an enormous amount of energy to the export of money. Cash is collected in small denominations from individual buyers and then bundled in great stacks of broken-in bills that are used to pay wholesalers, like the Flores brothers. These bills are counted, hidden in the same vehicle compartments that were used to smuggle drugs in the opposite direction and then sent to stash houses in Los Angeles, San Diego and Phoenix.
From there, they move across the border into Mexico. What happens to the money when it gets there? The cartel employs professional money launderers who specialize in drug proceeds, and according to Robert Mazur, a former D. In the early s, a Sinaloa accountant sent planeloads of U. A sizable share of the cash is devoted to paying bribes, and some is sent to Colombia to purchase more product, because drugs offer a strong return on investment.
I would put a large portion of my portfolio in cocaine. Even so, the business generates such volumes of currency that there is only so much you can launder or reinvest, which means that money can start to pile up around the house. And that was the money Zhenli held onto — he was an inveterate gambler, who once blew so much cash in Las Vegas that one of the casinos presented him, in consolation, with a Rolls-Royce. Placido also pointed out that, as a precursor guy, Zhenli was on the low end of the value chain for meth.
It makes you wonder about the net worth of the guy who runs the whole show. Inthe Flores twins were indicted in Chicago and began secretly cooperating with law enforcement. He will be the highest-ranking member of the cartel ever to face trial in the United States, and his favorite wholesale customers will be the star witnesses against him. It might be impossible to eradicate all the cartels in Mexico, this theory goes, so the government has picked a favorite in the conflict in the hope that when the smoke clears, a Sinaloa monopoly might usher in a sort of pax narcotica.
My repeated requests for interviews with relevant officials in Mexico were denied. The suggestion that the D. In the past, Chapo has occasionally authorized employees to provide information to American law enforcement.
Immigration and Customs Enforcement and announce their willingness to become informers — then feed the Americans intelligence about rival cartels, thereby using law enforcement to eliminate their competitors. Recently, a career criminal named Saul Rodriguez testified that Vicentillo solicited his help at the Metropolitan Correctional Center in downtown Chicago, where they were both being held, in an effort to have the Flores twins assassinated. Authorities have expressed concern that the cartel might undertake a daring jailbreak to get Vicentillo out.
They have also voiced the opposite worry — that Vicentillo will himself be killed. He has since been moved to a more secure facility. It might seem far-fetched that the cartel would try to assassinate one of its own, the son of Mayo Zambada, no less.
But Sinaloa guards its secrets ruthlessly. In that assault, and another that followed, he sustained more than a dozen stab wounds, which punctured his lungs, pancreas and intestines. After the second attack, he was moved to another facility and kept in a segregated unit. The roof caved in, and he barely survived. Today he is living in witness protection in the United States.
Between the coming trial and the increased political drumbeat on both sides of the border for his capture, Chapo may be more embattled today than at any time in his career. In February, he escaped a raid by Mexican authorities in the resort area of Los Cabos. With so many dead and so little progress, the Mexican populace has grown war-weary.
In addition to the threat of capture, there is the threat of competition. Rex is the Zetas. But to fend off the Zetas, Sinaloa is resorting to new levels of barbarism. One thing Chapo has always done is innovate.
Even as he engages in violent brinkmanship along the border, the cartel is expanding to new markets in Europe, where a kilo of cocaine can sell for three times what it does in the U. Patrick Radden Keefe is a staff writer for The New Yorker and a fellow at the Century Foundation. From tohe was a policy adviser in the Office of the Secretary of Defense. A version of this article appears in print on June 17,on Page MM36 of the Sunday Magazine with the headline: The Snow Kings of Mexico.
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