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Law Enforcement Officials to Lobby for Stronger Prepaid Transport Rules
By Colby Adams
printDispleased with proposed regulations, federal and state law enforcement officials are asking lawmakers and the U.S. Treasury Department to strengthen controls on the cross-border movement of prepaid access products. Under a departmental proposal published in October, individuals leaving or entering the United States would be required to disclose when they are carrying more than $10,000 on stored value products, including prepaid cards. The rule, proposed by the Financial Crimes Enforcement Network (FinCEN), has yet to be finalized. But the plan would do little to curtail the cross-border transfer of illicit funds via the products, according to Doug Leff, chief of...
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Law enforcement officials in most U.S. states have quietly deployed controversial handheld scanners as part of an effort to interdict suspicious funds held on prepaid cards and other magnetic-stripe products.
Prompted by signs that criminals are increasingly exploiting prepaid cards, federal and state investigators are turning to a handful of recent legal decisions to justify reading the value held on the instruments, sources say.
An apparent decision by White House officials to postpone the issuance of final rules governing the cross-border transport of prepaid access products has once again drawn criticism from U.S. lawmakers.
A congressionally-mandated plan to require U.S. border crossers to declare funds held on prepaid cards remains stalled at the White House more than a year after its submission for final review.
The theft of $45 million by cybercriminals exploiting and manipulating stolen prepaid card data highlights weaknesses in how financial institutions monitor the use of stored value products, say security experts.
U.S. lawmakers Thursday criticized federal officials for delays in finalizing anti-money laundering rules and failing to prosecute banks and bankers that facilitate billions of dollars in illicit transactions.
As U.S. officials work to shield American prepaid cards from abuse by financial crooks, foreign-issued stored value products remain a relatively easy avenue to move money into the United States anonymously.
Lobbying by the world's largest stored value payment facilitator has indefinitely delayed, and perhaps permanently blocked, a plan to give customs officials the ability to read prepaid cards, say sources.
Trade-based schemes and bulk cash smuggling are among the most common tactics used by international money launderers, according to Joseph Gallion, the deputy assistant director of the Financial, Narcotics and Special Operations Division for the Homeland Security Investigations (HSI).
Personally letting law enforcement agents know about clients' questionable activity can be crucial to identifying money launderers, according to Hector Colon, unit chief of the Illicit Finance and Proceeds of Crime Unit of Homeland Security Investigations at U.S. Immigration and Customs Enforcement.
The U.S. Treasury Department Tuesday prescribed new compliance rules on the prepaid product industry, a sector largely unregulated despite concerns about its vulnerability to money launderers.
Senators chastised the U.S. Treasury Department Wednesday for delays in regulating prepaid access products that can be used to smuggle drug proceeds from the United States into Mexico.
The U.S. Treasury Department remains on schedule to issue regulations early next year that will bring stored-value cards under the purview of the Bank Secrecy Act, according to a government official.
Merchants and automatic teller machines that help customers reload stored value cards do not necessarily qualify as money services businesses subject to anti-money laundering regulations, the U.S. Treasury Department said.