This article was produced in collaboration with Court Watch, an independent outlet that unearths overlooked court records. Subscribe to Court Watch here.
A money laundering organization allegedly connected to large seizures of cocaine inside the United States and works with cartels in Mexico and Colombia has moved at least tens of millions of dollars using a string of front businesses, cash drop-offs, and massive transfers of cryptocurrency, according to recently unsealed court records reviewed by 404 Media.
The court records provide deep insight into how alleged drug traffickers have turned to cryptocurrency, and in particular Tether (USDT), as a way to quickly move wealth across borders in recent years. 404 Media also reviewed other recently unsealed court documents which appear to describe another money laundering organization doing much the same thing for Mexican drug cartels including the Sinaloa, showing that cryptocurrencies have become a normal part of large scale drug trafficking in the 21st century. One of the documents even highlights that Tether is sold for cheaper in Mexico because it is known to be from drug proceeds.
One confidential source told investigators “the current trend was to purchase USDT from Mexico-based groups at a cheaper rate than the market price, and then sell the USDT in Colombia at Casa de Cambios [currency exchanges], virtual currency exchanges, over-the-counter (OTC) transactions, or peer-to-peer transactions (P2P). The USDT was sold at a cheaper rate in Mexico because it was known to be drug proceeds.”