ABA Banking Journal - January 2008 - (Page 46)
Compliance Clinic Microstructuring: Dark side of today’s retail banking ngela Jimenez was just another New Yorker making her way through Manhattan’s crowds getting her weekly banking done. Or so it might have seemed. Instead, Jimenez was a key link in a chain helping to keep drugs on the city’s streets—laundering money for drug traffickers. But Jimenez wasn’t the classical “mule,” sent to banks with bags filled wi th cash for deposit, in amounts below $10,000. Jimenez had cash—lots of it—but was making many very small deposits all over Manhattan. At one point, when government enforcement agents stopped her during a surveillance tail, she still had $165,000 in her handbag, and, apparently, a lot of stops still to make. Some of the cash was destined for purchases of goods, to be shipped for resale in Colombia. And some of it was used to purchase money orders for amounts under the $3,000 trigger point. But a good deal of it was entering the U.S. banking system for the first step of its electronic transformation into Colombian pesos. Jimenez was opening accounts at financial institutions, typically placing just $1,000 in each. She had counterparts in Colombia who were waiting for her scheduled deposits into the accounts linked to the many ATM cards they carried. Using cash machines in Colombia they withdrew pesos, which they gath- A ered into bigger bunches for delivery to the drug lords. By herself, federal authorities estimate, Jimenez helped move at least $1 million in drug sales proceeds, all in itty-bitty batches. Call it the wireless wire transfer, or, call it by the name law enforcers are using: microstructuring. By Steve Cocheo, executive editor 46 JANUARY 2008/ABA BANKING JOURNAL Citibank flags the trend This case—and there have been others—was related by Salvatore A. Dalessandro, deputy special agent in charge of the New York Field Office of the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) Office of Investigations. Dalessandro, who spoke last fall at the ABA/American Bar Association Money Laundering Enforcement Conference, is also director of the El Dorado Task Force, a multi-agency enforcement group. Dalessandro spoke of the emerging threats that ICE is seeing, including storedvalue cards, online payments, and ATMs, notably through microstructuring. He described microstructuring as a form of “smurfing,” where huge amounts of cash were structured into smaller deposits. Using specialized software and other techniques, many banks are able to track such attempts at evading Currency Transaction Reporting mechanisms. Unlike traditional smurfing, however, microstructuring aims to fly under the radar of traditional systems by dealing in very small amounts. Dalessandro said that transactions of $500 to $1,500 are more the rule. This method of money-laun-
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