A Dept. of Justice report estimates that billions in cash go south into Mexico yearly; and an Arizona legislator has proposed a bill to to close a money smuggling loophole.
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The National Drug Intelligence Center's 2010 Drug Threat Assessment estimates that at least tens of billions of dollars are annually smuggled out of the country in bulk cash. Here's an excerpt from the "Illicit Finance" section, which can be found on page 53 of the report:
"Tens of billions of dollars are laundered each year by drug traffickers operating in the United States. There are no current estimates for the annual amount of money either laundered domestically or smuggled out of the United States by DTOs. However, a 2007 NDIC study shows that from 2003 through 2004, at least $17.2 billion was smuggled into Mexico in bulk cash shipments alone."
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Here's a story from my colleague on the proposed legislation to close a loophole that allows people to put as much money as they want on stored-value cards:
By Stephen Ceasar
Arizona Daily Star
New legislation aimed at closing a federal loophole that allows drug cartels to move large amounts of money across the border on stored-value cards was introduced to Congress Thursday.
The cards aren’t currently classified under federal law as a “monetary instrument,” which means holders don’t have to declare them while crossing the border. By contrast, anyone carrying over $10,000 in cash across the border must declare it to customs officers.
The proposed law — dubbed the Anti-Cash Smuggling Act of 2010 — would reclassify the cards and allow border authorities to regulate them like other monetary instruments.
The legislation was introduced by Rep. Ann Kirkpatrick. The Arizona Democrat serves on the House Committee on Homeland Security.
A threat assessment by the U.S. Department of Justice National Drug Intelligence Center in 2006 dubbed the cards “an ideal money-laundering instrument,” citing loose regulation; cardholder anonymity; and liberal limits on value, reloading, withdrawal and spending on some types of the cards.
Federal officials have no way of knowing how much money travels in and out of the United States on the cards because they have no way to track them. But Arizona Attorney General Terry Goddard — a vocal leader for card regulation — believes it’s millions, based on conversations with law-enforcement officials.
“I can declare that I have $100,000 on the card, and they still can’t do anything about it,” Goddard said.
A new focus on southbound inspections by border authorities has netted record seizures at Southwest border ports. About $44 million has been seized during the inspections of vehicles and people exiting the United States over the past 1 1/2 years, compared to $43.6 million seized during the previous four years combined, U.S. Customs and Border Protection figures show.
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Stephen Ceasar wrote a story on these stored value cards taht you can read by clicking on the related box top left.
There is also a link in that box to the story I wrote on U.S. efforts to slow the cash smuggling.
