National Drug Intelligence Center   Nevada High Intensity Drug Trafficking Area Drug Market Analysis 2008   June 2008

Abuse

According to data from the Substance Abuse and Mental Health Services Administration (SAMHSA) Treatment Episode Data Set (TEDS), the number of methamphetamine-related admissions to publicly funded treatment facilities in Nevada exceeded those for any other substance of abuse, including alcohol, during 2006 (the latest year for which such data are available); this has been the case for the past several years (see Table 3). Nevada also leads the nation in reported rate of methamphetamine abuse, according to the 2006 National Survey on Drug Use and Health.³ In response to high levels of methamphetamine abuse in the state, the governor of Nevada commissioned a Governor's Working Group on Methamphetamine Use in January 2007. This program funds methamphetamine-related substance abuse prevention, education, treatment, and law enforcement activities from 2007 through 2009.

Table 3. Treatment Admissions to Publicly Funded Facilities in Nevada, by Substance, 2004-2006

Source: Treatment Episode Data Set.

While methamphetamine is the most often reported substance of abuse for publicly funded treatment admissions in Nevada, diverted pharmaceutical drugs are cited in more drug-related deaths in Clark County than any other substance. Moreover, the number of drug-related deaths associated with diverted pharmaceutical drugs in Clark County increased significantly between 2006 (165) and 2007 (336). However, a portion of this increase may be the result of an improved reporting mechanism implemented by the Clark County Coroner's Office in Nevada. (See Table 4.)

Table 4. Drug-Related Deaths, Clark County, by Drug, 2004-2007

Source: Clark County Coroner's Office.

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Illicit Finance

Bulk cash smuggling is the primary method used by traffickers to move illicit drug proceeds from the Nevada HIDTA to source areas. They generally smuggle bulk cash in hidden compartments of private and commercial vehicles that they drive to California or Mexico. Traffickers also smuggle bulk cash through parcel delivery services and, to a lesser extent, by couriers aboard commercial aircraft and buses. Additionally, some traffickers consolidate illicit proceeds generated in the region at stash locations, combine them with funds generated in other regions of the country, and transport the proceeds in bulk to Mexico.

Traffickers also use traditional depository financial institutions and money services businesses (MSBs), including money transmitters located in the area, to launder drug proceeds within the HIDTA region. They generally use MSBs to wire funds to other locations, typically along the Southwest Border, where they are collected and smuggled in bulk to Mexico; they also wire funds directly to Mexico. The funds are often deposited into a Mexican bank or a casa de cambio (exchange house) and then repatriated to the United States through electronic wires or bulk cash transportation by armored car or courier services.

DTOs, gangs, and independent dealers operating in the region also invest in cash-intensive front business such as restaurants, night clubs, and convenience stores that they use to commingle drug proceeds with legitimate business earnings. Additionally, they invest drug proceeds in residential real estate property that they improve slightly and sell to associates or complicit individuals for a profit, enabling them to conceal the true nature of their proceeds.

Law enforcement and media reports indicate that criminals typically attempt to launder money through casinos by exchanging illicit cash for casino chips and then either cash in the chips as legitimate gambling winnings or wire-transfer the money as winnings to out-of-state accounts. They can use slot machines in much the same manner. This method typically is used to launder smaller amounts of drug proceeds, as the process is slow, cumbersome, and easily tracked and documented by the casinos. Large sums would require employment of a smurfing⁴ crew and numerous accounts to transfer the money to avoid detection. The Nevada Gaming Commission and Internal Revenue Service closely monitor currency transaction reports.

End Notes

3. From 2002 through 2005 an estimated 1.4 million persons (0.6 percent of the total U.S. population) aged 12 or older used methamphetamine in the past year. Rates of abuse were highest in Nevada (2.0%), Montana (1.5%), and Wyoming (1.5%).
4. A technique whereby large amounts of cash are divided into smaller amounts to avoid Bank Secrecy Act (BSA) filing requirements and then deposited or wired.

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