Treasury under Secretary for Enforcement Raymond W. Kelly has issued two GeographicTargeting Orders (GTOs) against money remitters in the New York Metropolitan area andPuerto Rico to stop drug money laundering to the Dominican Republic.
"The targeted money remitters in New York send more than $500 million to theDominican Republic each year, of which a significant amount is believed to be drugprofits," said Under Secretary Kelly. "The GTO has proven to be a powerful tool,enabling us to stop the Cali cartel from wiring their illicit drug profits home. Now,we’re going to use this tool to shut down the Dominican money launderers."
The GTOs require certain money remitters to report to the Treasury information on cashremittances of $750 or more to the Dominican Republic. Beginning on September 2 for a60-day period, the New York GTO applies to 15 money remitters and their approximately3,400 agents and the Puerto Rico GTO applies to five money remitters and their agents.
The demographics of the New York Dominican community do not support the volume orincrements of funds remitted to the Dominican Republic through the targeted moneyremitters. Investigations in Puerto Rico have also uncovered widespread abuse of moneyremitters by Dominican-based narcotics money launderers.
"Money laundering is the ‘Achilles heel’ of drug traffickers," saidTreasury Secretary Robert E. Rubin. "Drug kingpins may be able to separate themselvesfrom street-level activity, but they cannot separate themselves from the profits of thatactivity."
A GTO, issued under the Bank Secrecy Act, a key anti-money laundering law, is used toimpose stricter reporting and record keeping requirements on specified financial serviceproviders in a certain geographical area for a limited time period.
"I commend the Department of the Treasury for taking this important action,"said Attorney General Janet Reno. "Issuance of this GTO represents another crucialstep in our joint law enforcement efforts to identify and target drug cash proceeds bytargeting financial sectors that are being misused by money launderingprofessionals."
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The new GTOs were requested by the U.S. Attorney for the Southern District of New York,the U.S. Attorney for the District of Puerto Rico, the U.S. Attorney for the EasternDistrict of New York and the U.S. Attorney for the District of New Jersey along withsenior law enforcement officials of the U.S. Customs Service and Internal Revenue Service.The Financial Crimes Enforcement Network is responsible for administration of the neworders which are designated to assist the law enforcement agencies affiliated with the NewYork based El Dorado Task Force and the High Intensity Drug Trafficking Area (HIDTA) TaskForce in San Juan, Puerto Rico.
The Dominican Republic GTOs are similar to the order issued last year against New Yorkmoney remitters and covering funds to Colombia. Still in effect, the Colombian GTO hasbeen renewed six times and is credited with the dramatic reduction of the transfer ofnarcotics proceeds through money remitters in New York City to Columbia. By contrast,there has been a 400% increase of drug money cash seizures as a result of the New YorkGTO.
"We expect the Dominican GTOs to generate substantial enforcement activity againstDominican drug money launderers and provide information to develop a permanent rulelowering the reporting threshold for all cash remittances outside the U.S. through moneytransmitters," said Kelly.
On May 21 of this year, Treasury proposed reporting requirements for all cashremittances of $750 of more along with two related proposals. The second proposal wouldrequire nationwide registration of "money services businesses," and the thirdwould require suspicious activity reporting by money transmitters and issuers, sellers andredeemers of money orders and traveler’s checks. The comment period for all threeproposals is currently scheduled to expire at the end of September.