Feds targeting smuggling rings to combat border crisis

• The federal government is now going after smuggling organizations to counter border crisis.
• Investigators are targeting bank accounts used by smuggling organizations to funnel profits.
• The new tactic comes as the flow of Central American migrants in the Rio Grande Valley has dropped.

The federal government has begun targeting the money-laundering operations of smuggling organizations as part of an effort to counter an unprecedented surge in Central Americans, including unaccompanied children, who have been streaming across the border in Texas' Rio Grande Valley for months.

The latest tactic, announced Tuesday by Department of Homeland Security Secretary Jeh Johnson, comes as the Obama administration has been criticized by Republicans in Congress for being slow to address the crisis.

It also comes as the flow of Central American families and unaccompanied children crossing illegally into the Rio Grande Valley has decreased significantly in recent weeks. Johnson acknowledged, however, that the drop may have more to do with the summer heat.

"This could be seasonal, but the numbers are dropping," Johnson said. "Nevertheless, the recent rise in illegal migration requires a sustained aggressive campaign."

As part of that campaign, the government has launched a three-month initiative to go directly after the criminal organizations that charge migrants to be smuggled from Central America through Mexico and into the United States, Johnson said.

Since the start of the fiscal year on Oct. 1, the Rio Grande Valley Sector accounted for nearly three-fourths of the more than 57,000 unaccompanied children apprehended by the Border Patrol. About three-fourths of the children were from Honduras, El Salvador, and Guatemala. The Border Patrol also has apprehended more than 55,000 children and adults traveling in families; roughly 90 percent from those same three countries.

To help go after money-laundering operations, Johnson said the Department of Homeland Security has deployed 60 additional special agents and support personnel to the Rio Grande Valley. They are investigating organizations smuggling illegal immigrants from Central America and other countries.

Since the initiative started June 23, federal authorities have arrested 192 people involved in smuggling operations and seized more than $625,000 in smuggling profits from 288 bank accounts, Johnson said.

"We are interdicting the flow of money that goes to these smuggling organizations," he said.

Adam Isacson, a senior associate for regional security policy at the Washington Office on Latin America, said targeting profits is one of the most effective ways to combat smuggling.

"It could certainly disrupt some of the traffic," Isacson said. "Following the money is one of the best ways to really disrupt this practice."

Seizing smuggling profits makes it difficult for criminal organizations to continue operating, he said. It also forces them to charge higher fees, which could deter some migrants by making the cost of the trip to the U.S. unaffordable, he said.

However, Isacson said, in the long term, smuggling organizations typically adapt and find new ways to launder money to keep operating, he said.

"They can maybe take that tactic off the table, but that's about it," he said. "In the same way, you can reduce the amount of drugs that get shipped in train cars or by ultralights ... but you end up hardly ever reducing the amount of drugs that get shipped."

Federal authorities are targeting the increased use of so-called "funnel" bank accounts by smugglers.

Under the schemes, the organizations pay associates to open legitimate bank accounts. They instruct relatives of migrants to deposit cash into the accounts, said Scott Brown, deputy special agent in charge of investigations for the Phoenix office of Immigration and Customs Enforcement.

The bank accounts allow smuggling organizations to collect cash deposits made anonymously throughout the country and withdraw them immediately, he said.

ICE agents deployed to the Rio Grande Valley in Texas will use techniques first developed in Arizona to investigate money-laundering activities, Brown said.

For example, in March, a 29-year-old Guatemalan man, Joel Mazariegos-Soto, was sentenced to five years in federal prison after pleading guilty to running a criminal organization that smuggled undocumented immigrants from drop houses in the Phoenix area to a dairy farm in Fonda, N.Y., where he worked, ICE officials said.

As part of the operation, Mazariegos-Soto used a "funnel account" to receive payments from individuals to smuggle family members into the U.S. After the money was deposited, it was withdrawn by members of the smuggling organization in Phoenix, officials said.

During the first four months of the operation in 2012, ICE investigators discovered Mazariegos-Soto had laundered more than $70,000 in smuggling fees, officials said.

ICE investigators in Arizona first began noticing the use of funnel accounts to collect smuggling fees in 2006, Brown said. Smugglers began using accounts in response to a crackdown by the Arizona Attorney General's Office on the use of electronic wire payments through Western Union Co. and other money-transfer businesses to collect smuggling fees, he said.

At the time, Arizona was the main corridor for illegal immigration along the Southwest border, and Phoenix was the hub for transporting illegal immigrants to other parts of the country.

Since then, illegal immigration in Arizona has plummeted and shifted to the Rio Grande Valley.

At the same time, the use of funnel accounts by smuggling organizations then spread to other parts of the country, including the Rio Grande Valley, he said.

"There is a perception amongst some people out there that modern-day human-smuggling networks one way or another equate to a modern-day underground railroad and that couldn't be further from the truth. It is treating desperate people purely as a commodity. It is violent. It's exploitative and it's profit driven," Brown said. "If we can take that profit out, we take the incentive to commit that crime out. We take that incentive to abuse those people away."