Thread: AZ: Over $300K seized from ‘coyotes’ who use banks to funnel

http://www.eastvalleytribune.com/story/ ... =STY-84682

February 24, 2007
Over $300K seized from ‘coyotes’ who use banks to funnel funds
Gary Grado, Tribune

One man claimed on a bank account application that he is a street vendor who sells corn. One woman claimed to be a housekeeper and another claimed to be a student.

Those are a few of the hundreds of Arizona bank customers who hold accounts that flow with tens of thousands of dollars in out-of-state deposits.

Authorities allege they are funneling money for drug and human smuggling operations, and the state is now stepping up efforts to seize their bank accounts, according to court records.

Investigators allege in search warrant affidavits filed in Maricopa County Superior Court that “coyotes,” or human smugglers, have switched from laundering their funds through money transmitters such as Western Union in favor of traditional banks.

But smugglers “don’t like the banks as much because they require identification,” said Arizona Attorney General Terry Goddard.

The Valley is known as a staging area for smugglers who send illegal immigrants to other parts of the country. Authorities have estimated that $300 million to $400 million in human smuggling funds is moved through Western Union annually in Phoenix.

Since 2001, the attorney general’s office has seized millions of those dollars.

Goddard said that operation’s success forced coyotes and drug smugglers to change their money-laundering tactics, leading him to expand his operation by seizing Western Union money transfers from other states to Mexico.

A Superior Court judge ruled in January that Goddard can’t seize the money going from other states to Mexico, but Goddard plans to appeal the decision.

The Illinois Coalition for Immigrant and Refugee Rights also sued Goddard in federal court, alleging thousands of innocent people were swept up in some of the operations.

Meanwhile, coyotes began moving their money through traditional banks with branches nationwide, court documents state.

The scheme works like this: A person opens an account in the Valley at a national bank such as Wells Fargo, JPMorgan Chase Bank or Washington Mutual. The person typically opens the account with the minimum required amount.

People in other states begin depositing funds, usually in large amounts but less than $10,000 to avoid reporting requirements.

The Arizona account holder then withdraws the money almost immediately.

“Hundreds of thousands of dollars in currency were funneled to receivers in Arizona from other states, and no money was deposited in Arizona for the purpose of being withdrawn in the other states,” wrote Phoenix police Detective Tim Burk.

Investigators asked three banks in January 2006 to look for that kind of account, and they “located hundreds of such accounts in their systems,” Burk wrote.

The attorney general’s office has executed four seizure warrants targeting 40 accounts between June 30 and Feb. 5, seizing $386,053 and getting court approval for $131,112 in forfeitures so far, said spokeswoman Andrea Esquer.

The bank seizures work like the Western Union ones. Investigators use software to pinpoint the suspected illegal accounts and then seize the money.

The account holder has to call a toll-free number to get it back, and a detective questions the person to decide whether the account is legitimate.

If the detective determines it is, then the money is released. If not, then the account holder has to go to court to get it back.

Mary Rowland, an attorney for the Illinois Coalition for Immigrant and Refugee Rights, hadn’t seen the seizure warrants for the bank accounts, but from a description of them over the phone she said they may contain some of the same constitutional problems as the Western Union warrants that are the subject of the lawsuit.

Rowland said the warrants seem to violate the due process clause and Fourth Amendment.

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Wells Fargo, JPMorgan Chase Bank or Washington Mutual, Western Union

This story should be huge, but it will be cancelled out by Anna Nichole and Britney, unfortunately.