Drug cartels and other criminal groups are increasingly using cryptocurrencies and a growing “gig” workforce of freelance brokers and couriers to launder cash and evade law enforcement, Bloomberg Businessweek reported.

The magazine cites the case of David Scotese, a Southern California man who allegedly offered “crypto for cold hard cash” with “no names” and “no questions asked,” and conducted thousands of transactions with little to no customer information. Scotese ran the business from at least 2021 to 2023, arranging in-person handoffs in the parking lot of Victory Park in Murrieta, California, and also accepting cash by mail. 

Scotese ultimately completed more than 4,000 no-paper-trail transactions before his arrest in June 2023, the news outlet said. 

Similar cash-for-crypto handoffs have appeared across the U.S., some involving parking-lot meetups, dark-web accounts, and “mules” collecting cash pickups worth millions of dollars. Officials described a spectrum of participants, from low-level “gig” workers to brokers linked to Chinese networks capable of coordinating pickups across multiple cities, Bloomberg said. 

Bitcoin remains widely used in such exchanges because of its liquidity and acceptance, while the Monero privacy coin is favored for anonymity and the stablecoin Tether is attractive for its low fees and the ability to fragment transfers into many small pieces, according to the report. 

The use of China-linked brokers is on the rise in part because they can undercut traditional laundering fees since U.S. dollars are prized for individuals seeking to circumvent Chinese capital-flight controls, the news outlet said. WeChat is seen as a particularly potent enabler for such networks, combining messaging, social media features, and payments in a system that is difficult for investigators to infiltrate or wiretap. 

The use of informal crypto brokers has proven particularly effective for organized crime groups. Once illicit proceeds are laundered through cryptocurrencies and hidden away in wallets, most law enforcement agencies face steep challenges in following the money, according to the report.

“We just don’t have the personnel,” Julie Shemitz, a former assistant U.S. attorney, told Bloomberg. “We absolutely cannot keep up.”

Read more at Bloomberg Businessweek