Thread: Law change urged to help stem 'flood' of money

Goddard: Mexican cartels move cash with gift cards

Law change urged to help stem 'flood' of money

by Casey Newton -
May. 17, 2009 12:00 AM
The Arizona Republic .

Mexican cartels have many tools at their disposal as they bring drugs into Arizona, and Attorney General Terry Goddard is bringing attention to one that often escapes attention: the gift card.

Cards issued by retail stores or banks - law-enforcement officials prefer to call them "stored-value cards" - can bring hundreds of thousands of dollars across borders. Difficult to track and often unreadable by law enforcement, the cards are an emerging front in the war against money laundering.

Goddard wants Congress to recognize gift cards as "monetary instruments," which would require people to declare their value when they cross international borders. To that end, Goddard is speaking at next month's Southwest Border Anti-Money Laundering Conference in Scottsdale on June 9-10. We sat down with Goddard to talk to him about fighting the cartels.

Why do these cards concern you?

You could have a million dollars on one of these cash cards, and you're not even breaking the law, going to Mexico, holding this in your pocket. The bottom line is, we've got to change the regulations. The flow of cash from the Untied States to the cartel bank accounts is a torrent. It's a flood. One of the most important ways you can strike back against cartel violence is by cutting off their source of funds.

In Arizona, are you finding these kinds of cards on people when they're being arrested?

The cards are literally below the radar screen. There's nothing illegal about having one of these cards. And there's no requirement that they be readable to law enforcement. I literally have no way of knowing what kind of money is going to Mexico in these things because we don't account for it. We're not watching it. That is a serious problem.

Even if you found these cards on someone, you might not be able to read them. Won't enforcement be a challenge?

They are easy to hide. But right now, you don't have to hide them. Most law enforcement will not be able to read what these cards say, so there needs to be some transparency. Cellphones have to transmit in a way that is intelligible to law enforcement. . . . The same should be true for this.

You've made other recommendations to Congress, such as lowering the amount of cash people can bring across borders and auditing wire transfers based on risk instead of a random sample. What would that achieve?

You wouldn't stop the criminal activity, but I think you would diminish it by an extraordinary amount. And you would strike back at the violence in Mexico in a palpable way, which we're not doing today. The violence is fueled, literally, by this flood of cash. And if we could slow the flood to a trickle . . . you're not going to be arming the cartels. You're going to be starving the cartels.

Would it be easier to pressure Congress to take action on this if you were governor? Is that something you've considered?

(Laughs) Many things are easier when you're in the top spot. I hope I'm persuasive as attorney general.

http://www.azcentral.com/news/articles/ ... tml?&wired

Other criminal entities have been using gift cards for money laundering purposes. One organized crime group was doing it years ago.

They should also look at bank ATM cards/checking savings accounts, these should be declared also...

Oooops. This is posted in the wrong place. Can someone move it over to OTHER.

Originally Posted by JohnDoe2

Oooops. This is posted in the wrong place. Can someone move it over to OTHER.

Moved.

This is tricky.

I have an ATM Card in my pocket. With that and a phone call from any place in the world I have access to all of the money in my checking account, savings account, C.D.s, I.R.A., etc. So am I breaking the law if I leave the country without declaring all of my deposits as going with me?

Because this law they want has to be for everyone, not just some people.

Focus needed here, please take ACTION!!!

http://www.alipac.us/ftopicp-900143.html#900143