By Jeffrey A. Newman Esq.
The U.S. Treasury FInancial Crimes Enforcement Network (FinCEN) announced that it would be examining over 100 U.S. money services that are operaitng along the southwest border of our country. These services provide financial services outside of a formal bank. The operation will reveal potential cartel-related money laundering from the U.S. financial system according to the Secretary of the Treasury Scott Bessent.
MSBs on the receiving end of these actions are on notice that Treasury will not tolerate Bank Secrecy Act violations that could put Americans at risk. This data-driven operation is based on a review of over one million Currency Transaction Reports and 87,000 Suspicious Activity Reports, which financial institutions are required to submit to FinCEN to provide highly useful data to law enforcement.
Money services businesses (MSBs) in the U.S., like currency exchangers, check cashers, and money transmitters, are prime targets for money laundering, where criminals disguise illegal cash as legitimate funds, often through placement, layering, and integration. Regulated by FinCEN under the Bank Secrecy Act, they must register, report large transactions (CTR) and suspicious activity (SAR), and maintain AML programs, with recent crackdowns targeting those along the U.S.-Mexico border for links to cartels and drug trafficking.
How MSBs are exploited for money laundering
- Cash-intensive activities: MSBs handle large amounts of physical cash, making them ideal for introducing illicit funds (placement).
- Structuring: Criminals break large sums into smaller transactions just under reporting thresholds (e.g., $10,000 for CTRs).
- International Transfers: Moving funds out of the country or converting them to foreign currency.
- Digital services: Using crypto exchanges and digital payment platforms for laundering, sometimes through specialized “money laundering as a service” providers.
U.S. Regulations & Enforcement
- FinCEN & BSA: The Financial Crimes Enforcement Network (FinCEN) oversees MSBs to enforce the Bank Secrecy Act (BSA).
- Registration: All MSBs must register with FinCEN.
- Reporting: Mandatory filing of Currency Transaction Reports (CTRs) for cash over $10,000 and Suspicious Activity Reports (SARs) for transactions over $2,000 or any suspicious activity.
- AML Programs: Required to have policies, training, and internal controls to prevent illicit finance.
- Enforcement: Recent operations target MSBs near the border for links to cartels, using data to identify non-compliant businesses
Jeffrey Newman is a whistleblower lawyer, whose law firm represents whistleblowers revealing violations of export controls, tariff evasions, money laundering, healthcare fraud and other kinds of WB cases. The firm represents individuals both in the United States and other countries. Mr. Newman and his firm also represent physicians and other healthcare providers who become whistleblowers in healthcare fraud cases. Whistleblower laws in the U.S. allow individuals anywhere with information about export control violations or tariff fraud to reveal the information under The False Claims act or through the Securities and Exchange Commission’s Whistleblower Program. The Firm’s website is at www.JeffNewmanLaw.com and attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
