Burning Atlanta

This is a long read and I'm not going into all of it, I'm only going to hit on a couple of points. In short, there have been several legal battles fought over how Arizona intercepts money from the smugglers and how they try to keep track of that money, where it comes from and where it goes. Arizona's fighting this battle nearly alone. No other states are involved and I don't know how much or little the Fed is involved.

Just follow the money

One way or another, at least $1.7 billion a year flows to Arizona's drophouse rings, federal and state investigators estimate. The money sustains illegal immigration, a big business characterized by gunbattles among smugglers and attacks upon immigrants. Every few months coyotes kill an immigrant.

The money maneuvers have frustrated Arizona investigators. Focusing on unscrupulous Western Union outlets, they had slashed wire transfers to smugglers from a peak of $500 million in 2002 to less than $50 million in 2006.

Arizona's crackdown began in 2001, when undercover agents watched coyotes walk out of Western Union outlets in the state with tens of thousands of dollars in cash. Often, they didn't bring valid ID to get cash and picked up payments wired to dozens of illegal immigrants.

As investigators tightened the net, coyotes starting bringing illegal immigrants to some Western Union shops to sign for the cash in smaller amounts. Store clerks took bribes and kept loose records, investigators testified.

Over the next five years, investigators tracked wired money and chased the evidence that emerged. Detectives pieced together a picture of drophouses, coyotes and smuggling rings. They collected troves of smuggling lists, interrogated thousands of immigrants and coyotes and conducted undercover stings of coyotes and Western Unions in Arizona. All the evidence pointed in the same direction: Vast amounts were being laundered.

The effort led to the largest money-laundering case of its kind. In January a grand jury indicted Bruce Dennis Love, a Phoenix-area Western Union franchisee, on money-laundering and other charges. Love has not entered a plea, pending a ruling on whether he is mentally competent to stand trial.

Statewide, about 5 percent of Western Union outlets were responsible for 80 percent of the most suspicious transactions, investigators with the state financial-crimes task force say. Transaction records and follow-up investigations show that two- to three-dozen stores depended on the coyote business.

"We haven't finished (prosecuting) the highly corrupt Western Union agents," said Cameron Holmes, senior litigation counsel at the Attorney General's Office.