Moving Illegal Proceeds: Opportunities Exist for Strengthening the Federal Government's Efforts to Stem Cross-Border Currency Smuggling

Testimony issued by the Government Accountability Office with an abstract that begins "This testimony discusses federal efforts to stem currency smuggling across our nation's borders. Mexican drug-trafficking organizations, terrorist organizations, and other groups with malevolent intent finance their operations by moving funds into or out of the United States. For example, a common technique used for taking proceeds from drug sales in the United States to Mexico is a method known as bulk cash smuggling. The National Drug Intelligence Center (NDIC) has stated that proceeds from drug trafficking generated in this country are smuggled across the southwest border and it estimates that the proceeds total from $18 billion to $39 billion a year. NDIC also estimates that Canadian drug-trafficking organizations smuggle significant amounts of cash across the northern border from proceeds of drugs sold in the United States. In addition to bulk cash smuggling, 21st century methods and technologies of laundering money have emerged. In 2009, NDIC stated that new financial products and technologies present unique opportunities for money launderers as well as unprecedented challenges to the intelligence, law enforcement, and regulatory communities. NDIC and others cited the use of prepaid cards or gift cards that are loaded with currency or value--also called stored value--as presenting a compact and easily transportable method to move money into and out of the United States. U.S. Customs and Border Protection (CBP)--a major component in the Department of Homeland Security (DHS)--is the lead federal agency in charge of securing our nation's borders. In March 2009, the Secretary of Homeland Security called on CBP to help stem the flow of bulk cash and weapons moving south by inspecting travelers leaving the United States for Mexico--an effort called outbound operations. In addition, the Financial Crimes Enforcement Network (FinCEN)--a bureau in the Department of the Treasury (Treasury)--seeks to deter and detect criminal ...