BMPE+TBML=MONEY LAUNDERING THROUGH FAST FASHION

If you were wondering why US law enforcement pulled off a major raid of Los Angeles-area clothing wholesalers last year, here's why. FAST FASHION, the sale of cheap copies of the latest fashion trends, manufactured quickly in Mexico, and sold to hungry young American consumers, is a cash cow for retailers. The fact that its manufacture is also an environmental nightmare appears to be irrelevant to all the participants involved, but compliance officers in Los Angeles know that it is a clear and present danger to their banks.

The fast-moving pace of transactions between American fashion houses and Mexican clothing manufacturers, acting to capitalize on short-term fashion trends, masks the illicit movement of narco-profits earned in the US to Mexico, where it is eventually delivered to the cartels converted to Peso form, thereby evading Mexican restrictions on the conversion of US Dollars into local currency. Some experts refer to it as a variation on the Black Market Peso Exchange well all know, but with a twist; there's no retailer at the southern end needing greenbacks to buy US goods. the transactions appear to simply be American company payments to Mexican factories for fast fashion. Piggy-backing additional Dollars to wire transfers, and then diverting the difference to Cartel financiers smack of Trade Based Money Laundering, so I must call it an amalgam of both BMPE and TBMl to be accurate.

If you are a compliance officer at ANY American financial institution whose clients purchase goods from Mexico, you will want to check to see whether the funds headed south, through your bank, are in excess of the purchase price of the goods being bought. You should expect that it's not only fashion companies that are pulling this trick. Watch for it.