Ecuador's Money Laundering Figures Don't Add Up

Money laundering has become the financial engine powering Ecuador's criminal underworld, according to the Ecuadorian Organized Crime Observatory (OECO). The illicit practice, which disguises money from crimes like drug trafficking, corruption, or illegal mining to appear legitimate, is a complex, three-stage process: placement of illicit cash into the financial system, stratification through circulation via transactions, and integration as seemingly legitimate investments.

Estimates for the scale of money laundering in Ecuador vary, but the OECO suggests it could represent between $3.91 billion and $6.51 billion annually, or 2% to 5% of the country's GDP. A 2021 study by Celag estimated $3.5 billion per year, while a more recent analysis by Revista Gestión in April 2026 placed the figure at $5 billion, roughly 4% of the 2025 GDP, based on seized drug quantities.

A case highlighted by the Latin American Financial Action Task Force (Gafilat) illustrates a typical scheme. A municipal official, using a pseudonym, registered $3.2 million in the financial system, nearly triple his declared income. A significant portion, 86%, was deposited in cash by young employees of companies that supplied the municipality where he served as mayor. One of these companies had his cousin as a shareholder. With these funds, the official purchased a $1.7 million house and five luxury vehicles. Gafilat included this case, involving document forgery, embezzlement, and tax evasion, in its 2025 Regional Typologies Report on Anti-Money Laundering and Counter-Terrorist Financing.

Surveys of justice and security sector representatives indicate that the sectors most associated with money laundering are vehicle sales (24.1%), commerce (19.3%), and sports betting (15.7%). Modalities differ by region. In Guayas, money enters through the rapid buying and selling of real estate and sports betting apps. In Pichincha, it flows through contraband cars legalized as "mirror cars" and then resold.