U.S. Cracking Down on Border Money Exchanges

Federal agents Thursday arrested operators of unregulated currency exchanges along the Texas-Mexico border on felony charges in a major crackdown designed to thwart the laundering of narcotics money.

A sting operation by U.S. Customs and Internal Revenue Service agents that began a year ago showed that less than half the 50 casa de cambio --money exchange--operators from Brownsville to El Paso who were approached by undercover operators had refused to launder money, officials said.

Internal Revenue Service agents late Wednesday began arresting the suspects, indicted in the last 10 days by federal grand juries in the southern and western judicial districts of Texas. By Thursday, 21 of them had been arrested, said Asst. U.S. Atty. Christopher Lee Milner.

“Narcotics traffickers utilize currency exchanges to thwart the proper reporting of large currency transactions, thereby concealing their illegal activities,” Milner and IRS agent Michael Grubich of Austin said in a statement given to reporters.

“Our understanding is that currency exchanges along the border are not regulated by any state or federal agency,” Grubich said. “I don’t think there’s any question but many of them are laundering money.”

The 25 people charged operated exchanges in Brownsville, El Paso, Del Rio, Eagle Pass, Laredo, McAllen and San Antonio, they said.

The suspects were charged with failing to file IRS Currency Transaction Reports on transactions over $10,000, an offense punishable by up to five years in prison and a $250,000 fine.

Milner said the crackdown on money exchanges will continue, and in the future specific charges involving drug money could be filed.

Grubich said the operation began a year ago with agents visiting about 100 money exchanges along the border and distributing IRS regulations and explaining to the operators they must file Currency Transaction Reports on all exchanges of pesos and dollars totaling more than $10,000.