700 Miami Businesses Being Monitored For Drug Money Trafficking
Apparently the U.S. Treasury Department thinks that a lot of Miami business who say they're "electronics exporters," are just exporting electronics. The Department's Financial Crime Enforcement Network believes that some of the businesses are being used to launder drug money, and has placed a dragnet on any electronics exporter in the area. The so-called "Geographical Targeting Order" will effect approximately 700 businesses in South Florida.
Most businesses are only required to report a cash transfer of over $10,000 to the federal government, but now Miami electronics exporters must report all cash transfers over $3,000. Those filings must also prove that the business knows the customer, and can produce the customer's phone number and a copy of their ID.
"Law enforcement investigations reveal that many of these businesses are exploited as part of sophisticated trade–based money laundering schemes in which drug proceeds in the United States are converted into goods that are shipped to South America and sold for local currency, which is ultimately transferred to drug cartels," reads a press release from the feds on the new rules. "This GTO enhances the transparency of the covered businesses' transactions; it does not make any determination about their knowledge or lack thereof of the money laundering schemes."
So in other words, some of these businesses may be being used for money laundering, and might not even know it.
A member of a drug trafficking gang might for example smuggle drugs into America, sell them for cash, use that money to buy, say, 500 TVs, ship them back home, sell those TV, and then collect their profit that way. So the feds now wants the businesses on the Miami side of that transaction to report any large cash transactions they may receive.
The order is not unprecedented. Last year, businesses in the Los Angeles fashion district were placed under a dragnet after federal investigators suspected money laundering schemes were rife in the area.
“When we issued a similar GTO in the Los Angeles area last year, many speculated about whether we’d be doing the same in other parts of the country,” said FinCEN Director Jennifer Shasky Calvery in a statement. “We are committed to shedding light on shady financial activity wherever we find it. We will continue issuing GTOs, as necessary, as well as exercising FinCEN's other unique anti-money laundering authorities, to ensure a transparent financial system that impedes money launderers and other criminals from masking their identity and illicit activity.”
South Florida Business Journal notes that in addition to the businesses, local banks who have those businesses as customers will also be affected.