Describing cash smuggling by cartels easier than stopping it

See this "Binational Criminal Proceeds Study" (pdf) from US Immigration and Customs Enforcement for a detailed discussion of currency smuggling from the US to Mexico. Time magazine described the topline results thusly:

Based on interviews with law enforcement officials on both sides of the border, along with confidential information, the study also describes routes the money often takes: Smaller dealers throughout the U.S. send cash to consolidators in five cities: Los Angeles, Chicago, New York, Charlotte and Atlanta. The money is then trucked overland to four secondary hubs — Phoenix, El Paso, Dallas and Houston — to be broken into smaller amounts and prepared for smuggling across the border.

The most common border crossings for cash smugglers are in San Diego, Nogales, Arizona, and the Texas cities of McAllen, Laredo and Brownsville, according to the report.

One often hears talk of "money laundering" by drug cartels, but that term is a misnomer for most of this activity. For the most part cartels smuggle bulk cash into Mexico, a nation which runs largely on a cash economy. About 75% of Mexico's economy operates on cash compared to 20% in the United States. Between 50% and 75% of smuggled cash never sees the inside of a bank, according to the report, even after it enters Mexico. Among the key findings:

The Criminal Enterprises that together operate the series of process steps required to smuggle criminal proceeds out of the United States, in to Mexico, and on to third countries are adept at compartmentalizing knowledge and responsibility to limit the impact of law enforcement (LE)’s interdiction and to impede LE’s investigative work. The end-to-end supply chain is designed with redundant nodes and simplified roles to limit the potential negative impact that any one individual or group of individuals can have on the success of the overall operation.

In English, that means when law enforcement busts a mule carrying drug cash, it's virtually impossible to trace responsibility up the ladder to the final recipients of the money. So little fish get caught, big fish swim free.

Notably, the report describes the problem in detail but offers no suggestion for strategies that might successfully stop it. However, the US Ambassador told Time that "it's going to be important for Mexico have restrictions on how cash can be used, or to require that large purchases are accompanied with notary certificates reported to the Treasury." Whether that's possible within the constraints of an underdeveloped economy, I don't know. But it's clear from this report that interdiction on the US side hasn't, and likely won't, make a dent in the problem.