WASHINGTON (CNN) - Top federal law enforcement officials and regulators said Wednesday that criminals are finding news ways to hide and move funds from drug trafficking and other illicit activities.

Tighter scrutiny of the traditional banking industry has forced criminals to look for alternative methods of laundering money, the officials told reporters about a new report.

Officials say $1 million in $20 bills translates to six stacks of bills three feet high and weighing more than 100 lbs.

The report says prepaid "stored-value" cards, including ones from phone companies and retail gift cards, are increasingly being used by criminal organizations to avoid law-enforcement detection.

"Drug dealers load cash onto prepaid cards and send the cards to their drug suppliers outside the country," the report says. The suppliers are then able to cash the gift cards in foreign countries.

Criminal organizations are increasingly forced to turn to bulk cash smuggling rather than risk being detected depositing large sums in financial institutions, authorities say. Most of the shipments cross the Southwest border into Mexico.

"Smugglers conceal cash in vehicles, commercial shipments, express packages, luggage and on private aircraft or boats," according to the report.

Officials say $1 million in $20 bills translates to six stacks of bills three feet high and weighing more than 100 lbs. That tends to limit major illegal cash shipments by air.

"Because of both its bulk and its weight, the challenge in moving bulk cash is either to use large commercial shipping containers or specialized compartments in vehicles," the report states.

Authorities say money laundering in the United States remains a "massive and evolving challenge," but add they cannot offer any estimate of how much "dirty money" is circulating through the U.S. financial system.

"We know there's a lot of it, but we don't know how much and we don't have faith in any of the estimates that have been made," said Treasury Under Secretary Stuart Levey.

Levey brought officials from 16 federal agencies to the Treasury Department to release the first government-wide money-laundering threat assessment, which examines 13 methods used by criminals to hide money stemming from illicit transactions.

"Before you can effectively treat a problem you must first have an accurate diagnosis," Levey said.

The report indicates money laundering to finance terrorism is a tiny fraction of the problem, with less than 1 percent of the instances filed suggesting any possible ties to terrorism.

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