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National Drug Intelligence
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Traffickers use a variety of methods, including bulk currency smuggling, money remittance companies, stored value cards, luxury goods purchases, front businesses, and real estate investments, to launder illicit drug proceeds generated in the HIDTA region. Some Hispanic traffickers transport bulk currency derived from drug sales to family and friends in Mexico. They also transfer illicit funds through money remitters and by converting drug proceeds to stored value cards. African American distributors are less likely to transport illicit funds outside the HIDTA region and instead purchase expensive items such as luxury vehicles, apartments, vehicle accessories, and jewelry. Various traffickers use a number of front businesses to launder drug proceeds in the region, including barber shops, beauty salons, car washes, candy stores, child care facilities, restaurants, retail clothing stores, taverns, and used car dealerships.
Some traffickers also are increasingly purchasing residential real estate in an attempt to mask the illicit nature of their proceeds. The state of Wisconsin provides tax credits for housing rehabilitation; these credits are enticing some local distributors to purchase and refurbish dilapidated properties. Once a property is refurbished, the distributor either rents or sells the property. Distributors who rent the residential property report drug proceeds as rental income in addition to actual rent received from legitimate tenants. Additionally, some local distributors are purchasing residential properties and immediately selling them at substantially increased prices to indebted associates. The distributor receives profit from the sale, seemingly legitimizing the income, while the indebted associates typically default on the loans, often defrauding banks or mortgage companies.
Despite reported cocaine shortages in the Milwaukee HIDTA region, local distributors will be able to maintain their supplies, albeit at higher prices. If cocaine shortages intensify, local distributors would most likely increase their direct dealings with traffickers along the Southwest Border in order to purchase sufficient supplies of cocaine at more favorable prices.
Heroin abuse, particularly among younger abusers, is likely to increase in the Milwaukee HIDTA region; the increase will be caused, in large part, by prescription opiate abusers who switch to heroin because of lower prices and ready availability.
African American street gangs on the north side of Milwaukee will quite likely increase their distribution of MDMA, leading to increased abuse of the drug among African Americans who previously did not have access to the drug.
Recent law enforcement successes in combating street gangs in Milwaukee should have a positive effect on overall crime in the neighborhoods where these gangs operate, at least in the near term. Persistent law enforcement efforts and community involvement will be instrumental in ensuring that these gangs do not reestablish operations and that others do not replace them.
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