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Print| FOR IMMEDIATE RELEASE September 4, 1997 |
TREASURY CRACKS DOWN ON REMITTANCES TO DOMINICAN REPUBLIC
Treasury under Secretary for Enforcement Raymond W. Kelly has issued two Geographic Targeting Orders (GTOs) against money remitters in the New York Metropolitan area and Puerto Rico to stop drug money laundering to the Dominican Republic.
"The targeted money remitters in New York send more than $500 million to the Dominican Republic each year, of which a significant amount is believed to be drug profits," 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 cash remittances of $750 or more to the Dominican Republic. Beginning on September 2 for a 60-day period, the New York GTO applies to 15 money remitters and their approximately 3,400 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 or increments of funds remitted to the Dominican Republic through the targeted money remitters. Investigations in Puerto Rico have also uncovered widespread abuse of money remitters by Dominican-based narcotics money launderers.
"Money laundering is the ‘Achilles heel’ of drug traffickers," said Treasury Secretary Robert E. Rubin. "Drug kingpins may be able to separate themselves from street-level activity, but they cannot separate themselves from the profits of that activity."
A GTO, issued under the Bank Secrecy Act, a key anti-money laundering law, is used to impose stricter reporting and record keeping requirements on specified financial service providers 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 crucial step in our joint law enforcement efforts to identify and target drug cash proceeds by targeting financial sectors that are being misused by money laundering professionals."
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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 Eastern District of New York and the U.S. Attorney for the District of New Jersey along with senior law enforcement officials of the U.S. Customs Service and Internal Revenue Service. The Financial Crimes Enforcement Network is responsible for administration of the new orders which are designated to assist the law enforcement agencies affiliated with the New York based El Dorado Task Force and the High Intensity Drug Trafficking Area (HIDTA) Task Force in San Juan, Puerto Rico.
The Dominican Republic GTOs are similar to the order issued last year against New York money remitters and covering funds to Colombia. Still in effect, the Colombian GTO has been renewed six times and is credited with the dramatic reduction of the transfer of narcotics 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 York GTO.
"We expect the Dominican GTOs to generate substantial enforcement activity against Dominican drug money launderers and provide information to develop a permanent rule lowering the reporting threshold for all cash remittances outside the U.S. through money transmitters," said Kelly.
On May 21 of this year, Treasury proposed reporting requirements for all cash remittances of $750 of more along with two related proposals. The second proposal would require nationwide registration of "money service businesses," and the third would require suspicious activity reporting by money transmitters and issuers, sellers and redeemers of money orders and traveler’s checks. The comment period for all three proposals is currently scheduled to expire at the end of September.
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