Treasury Department Issues Geographic Targeting Orders (GTOs) Against Money Remitters in New York and Puerto Rico

September 4, 1997

In an endeavor to combat financial crimes and money laundering, the Treasury Department, under the leadership of Treasury Under Secretary for Enforcement Raymond W. Kelly, announced two Geographic Targeting Orders (GTOs) against money remitters in the New York Metropolitan area and Puerto Rico. These orders aim to prevent drug money laundering to the Dominican Republic.

Preventing Drug Money Laundering

Under Secretary Kelly stated, “Money remitters in New York that send funds to the Dominican Republic annually total over $500 million, and a significant portion of this amount is believed to be drug profits.” The use of these remitters has been a vulnerability for drug cartels, specifically the Cali cartel, in the past. Therefore, the focus is now on Dominican money launderers.

Geographic Targeting Orders (GTOs) Details

effective September 2, 2017:

1. New York GTO: This order involves approximately 15 money remitters and their agents.
2. Puerto Rico GTO: This order covers five money remitters and their agents.

Both orders require certain money remitters and their agents to report specific information on cash remittances of $750 or more to the Dominican Republic.

Addressing Money Laundering Concerns

Investigations have revealed widespread abuse of money remitters by Dominican-based narcotics money launderers in the New York and Puerto Rico communities. Treasury Secretary Robert E. Rubin stated, “Money laundering is the ‘Achilles heel’ of drug traffickers… They cannot separate themselves from the profits of that activity.”

Background and Impact of GTOs

A GTO, issued under the Bank Secrecy Act, is a powerful tool used to impose stricter reporting and record-keeping requirements on specified financial service providers in a certain geographical area for a limited time period.

The new GTOs were requested by the U.S. Attorneys for the Southern and Eastern Districts of New York, the District of Puerto Rico, senior law enforcement officials of the U.S. Customs Service, and the Internal Revenue Service.

Enforcement Activity and Information Gathering

The Financial Crimes Enforcement Network will administer the new orders, which are expected to yield substantial enforcement activity against Dominican drug money launderers and generate valuable information for the development of a permanent rule lowering the reporting threshold for all cash remittances outside the U.S. through money transmitters.

Previous GTO Against New York Money Remitters

Just a year ago, a similar GTO was issued against New York money remitters and covering funds to Colombia, which is still in effect and credited with the reduction of narcotics proceeds transfer through money remitters in New York City. Instead, there has been a 400% increase in drug money cash seizures as a direct result of the New York GTO.

New Proposed Reporting Requirements

The Treasury Department also recently proposed reporting requirements for all cash remittances of $750 or more and three related proposals:

1. registration of ‘money services businesses’ nationwide
2. suspicious activity reporting by money transmitters
3. suspicious activity reporting by issuers, sellers, and redeemers of money orders and traveler’s checks

The comment period for all three proposals is scheduled to expire at the end of September.

Under Secretary Kelly concluded, “We expect the Dominican GTOs to generate substantial enforcement activity against Dominican drug money launderers and provide valuable information to develop a permanent rule lowering the reporting threshold for all cash remittances outside the U.S. through money transmitters.”