Senior Intelligence Research Specialist, Office of Trend and Issue Analysis
Financial Crimes Enforcement Network
Department of the Treasury
Worked with Mexican officials to study cross-border currency flows and help disrupt the laundering of billions of dollars derived from illicit U.S. drug sales.
Federal law enforcement authorities have suspected for years that violent Mexican drug cartels routinely smuggle cash from their American narcotics sales into their own country, deposit the funds in local banks and then funnel huge sums of the illicitly gained money back into the United States.
Working with the Mexican government, Ann Martin of the Financial Crimes Enforcement Network (FinCEN), analyzed tens of thousands of transactions, and in 2010, documented that billions of dollars in illegal U.S. drug proceeds were entering the Mexican banking system.
The highly detailed work by Martin, a 29-year-old intelligence research specialist, supported the Mexican government’s upcoming decision to issue new regulations restricting the amount of U.S. dollars that Mexican banks may receive. These new regulations have led to a sharp decline in the deposits of U.S. currency in Mexican financial institutions. At the same time, Martin’s report has provided American and Mexican law enforcement authorities with a number of leads into cross-border money laundering and transnational organized crime groups.
“These findings meant that for the first time, the Mexican government had empirical data on this topic,” said Nicholas Colucci, FinCEN’s associate director. “As a result, and in connection with the Mexican government's own efforts to curtail money laundering, in June 2010, the Mexican government limited the number of U.S. dollars that could be deposited into financial institutions.”
The new rules make it more difficult for criminals to launder their illicit funds through the Mexican financial systems, and may lead them to take greater risks as they try to move cash across the border. Where there is more risk involved, law enforcement can often more easily detect the activity and catch the illicit actors.
FinCEN, a bureau within the Department of the Treasury, is responsible for increasing the transparency of the U.S. financial system so that money laundering, terrorist financing, and other economic crimes can be detected, investigated, prosecuted, and ultimately prevented. FinCEN administers the Bank Secrecy Act, which mandates that financial institutions report large or unusual transactions and is responsible for overseeing terrorist financing provisions of the USA PATRIOT Act.
In the case of Mexico, James H. Freis, Jr., the director of FinCEN, said, “no one had ever before put together a picture of this kind of financial movement across our borders.” He said everyone understood that illegal proceeds from U.S. drug deals were deposited in Mexican banks, and then sent back to this country through wire transfers, traveler’s checks and cash shipments.
As a result, enormous sums of money are available to perpetuate the destructive drug trade in the United States, allowing the violent drug lords to live a lavish lifestyle and continue wreaking havoc in communities in both countries.
Freis said Martin’s work “helped Mexico understand that they needed to make fundamental changes to their regulations,” and has allowed the U.S. government to send advisories to U.S. banks to be on the alert for specific types of activity regarding funds from Mexico. He said this initiative is part of the broader partnership between President Obama and Mexican President Calderon to combat the deadly drug trade.
“Ann and her colleagues analyzed hundreds of thousands of pieces of data and somehow made coherent sense of it all, in addition to making it relevant for various audiences,” said Freis. “In fact, they were even able to explain it in plain language in both English and Spanish.”
Since preparing her report, which was co-authored with a counterpart from the Mexican Financial Intelligence unit, Martin has briefed a range of audiences, including law enforcement, financial regulators, affected financial institutions, policymakers and foreign government officials. Since the briefings, Colucci said, more than 700 suspicious activity reports regarding money coming to the U.S. from Mexico have been filed by these banks.
Martin, who joined FinCEN after a brief stint in the private sector, said two of the biggest challenges faced were sifting through the sheer volume of information and working through the data limitations. She also dealt with language and cultural barriers. But Martin, who led a team of experienced analysts, said she quickly found “a lot of money that couldn’t be explained by legitimate economic factors.”
“It’s really gratifying to feel that the work you’re doing is making a difference in the bigger picture,” said Martin. “The work that we did helped to support a lot of actions that are being taken in terms of combating international organized crime from the money side.” She said it was rewarding to collaborate with her Mexican counterparts to study a problem facing both countries.
Martin’s colleagues marvel that she could accomplish so much in only her second job out of college and at such a young an age. They universally describe her as quiet, unassuming, extremely bright, hard working and a committed public servant who leads by example.
“I’ve been in government for 35 plus years and Ann is the kind of person that you want to hold up as an example for others,” said Karen Fleischer, a deputy associate director at FinCEN. “These are the people we want in government. She is extremely dedicated to the agency’s mission.”