The BMPE consists of two interrelated activities.  One occurs in Colombia: the purchase of accumulated drug dollars in America.  And the other occurs in the United States: the actual delivery of drug dollars to the money exchanger’s associate in the United States.

1.      Purchase of Dollars in Colombia

The BMPE process begins when the cartel financial manager is contacted by his cartel representative in the United States, and advised that a particular trafficking organization in Miami is ready to turn over money owed to the cartel.  For purposes of this example, a figure of $ 1 million will be used.  The cartel financial manager notifies money brokers in Colombia of the $ 1 million available in Miami.

A money broker may purchase the $ 1 million at a discounted rate of exchange of 1500 pesos to the dollar (given an official exchange rate of 1800 pesos to the dollar), and is given thirty day

s after delivery to remit the 1.5 billion pesos to the cartel financial manager.  The money broker then will notify money exchangers in Colombia of the $ 1 million available in Miami.  Four different money exchangers may individually purchase $ 250,000 each of the $ 1 million dollar lot at a discounted rate of exchange of 1600 pesos to the dollar (compared to the official exchange rate of 1800 pesos to the dollar).

The money exchangers then notify their clients, who are likely to be Colombian businessmen and tourists, that they have dollars available in Miami.  Five different customers may individually purchase $ 50,000 each of the money exchanger’s $ 250,000 lot at a discounted rate of 1700 pesos to the dollar (compared to the official rate of 1800 pesos to the dollar).  When placing this order, the customer specifies the manner of delivery.  The customer will pay the money exchanger in pesos when the delivery has been confirmed.

The pesos received are then forwarded to the cartel family financial manager.  In this method, the cartel family receives the proceeds of their cocaine distribution activities without the dollars ever leaving the United States.

2.      Delivery of Dollars in Miami

Once the $ 1 million dollars available in Miami has been sold, the drug trafficker must deliver it to its new owner, the money exchanger and his “associate” in Miami.  How does the drug trafficker know who to deliver this money to?  Can any person approach the drug trafficker and say, “show me the money?”  Of course not.  The drug trafficker is extremely cautious about revealing his identity, not only for fear of being arrested but also because he does not want to get robbed.

A secretive system of code words, fake names, forwarding of beeper numbers, and covert meetings between unknown parties occur which culminates with the delivery of money to the money exchanger’s associate in Miami.  For example, when the money exchanger purchases $ 250,000 from the money broker, he will give the money broker the pager number of his associate in Miami, who will receive the money.  The money broker forwards this pager number to the cartel financial manager, who passes it on to the drug trafficker.  The trafficker is instructed to deliver $ 250,000 to whoever responds to the beeper number and gives the correct code word.

Next, the trafficker in Miami will contact the associate in Miami via the beeper number, placing the number of a payphone and a numerical code into the beeper.  The associate will recognize the numerical code as belonging to an anticipated money delivery and will know which code word to respond with.  He will call the number in his pager and have a short, cryptic conversation with the trafficker.

Once the correct code word is given by the associate, the trafficker will confirm the amount of the delivery.  The trafficker will arrange a meeting with the associate.  At the meeting location, once the trafficker has identified the associate, he may approach him with a bag, box, or suitcase full of money.  At this point, the trafficker may verify the associate by asking his name and password.  Upon proper verification, the trafficker will turn the money directly over to him and leave, never to meet again.

Once the money exchanger’s associated has received the box, bag, or suitcase full of money, the placement or initial laundering of money begins.  Placement has been called “the most difficult step for would-be money launderers.”  Through the placement phase, the associate further conceals the illegal source of the money by placing it into the stream of commerce in the manner requested by the money exchanger’s client.