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Washington Post - May 18, 2004 U.S. raids 17 businesses that send cash abroad By Mary Beth Sheridan Authorities have seized $3.6 million in the local raids, which began after the USA Patriot Act took effect in October 2001, tightening regulations on money senders. Although authorities have released few details of the operations, they suspect that three of the firms have sent funds to countries accused by U.S. authorities of supporting terrorism. No terrorism-related charges have been filed. "When you have an underground banking system, it tends to make us very vulnerable to terrorist activity" as well as other crime, said Kevin Delli-Colli, assistant special agent in charge of the local Bureau of Immigration and Customs Enforcement office, which has headed the effort. But some immigrants and crime specialists say the crackdown has targeted many mom-and-pop businesses that have nothing to do with financing terrorism. These informal money-senders are running afoul of the Patriot Act simply because they lack the resources to meet all of its licensing requirements, critics say. "We're alienating communities that we should be bringing together in our corner for coalitions against terrorism," said Nikos Passas, a professor at Northeastern University who has studied terror finance. The most recent raid occurred at the Eritrean Cultural and Civic Center at Sixth and L streets NW. On April 13, federal agents and D.C. police swept into a second-floor office at the center and seized documents and computers. The office, which was rented from the club, had allegedly been sending hundreds of thousands of dollars overseas. Immigrants who gather at the club to swap gossip and watch Eritrean television programs were shocked at the raid on the office, which many use to send cash to needy families back home. "To include us like a terrorist group is unacceptable. Of course we're offended," said Estefanos Mesmea, 55, a cabdriver from Alexandria who was sipping espresso at the club on a recent day. The case is under investigation, and officials declined to provide details. Informal money-transmitters have flourished in the United States, thanks to growing immigration and improved technology. For many immigrants, such services offer a quick, cheap way to send money to regions with inefficient banks -- or none at all. The businesses sometimes function through clan or family ties and use unorthodox methods to move cash to hard-to-reach areas. For example, some are hawalas, an Arabic word for transfer, in which money is not immediately wired to the final destination. Instead, a U.S.-based hawala operator tells his counterpart in another country to give cash to the recipient and leaves an IOU. The two hawala operators settle up later, sometimes through offsetting transactions or trade-finance arrangements. But after the Sept. 11, 2001, attacks, authorities grew increasingly concerned about such services and their hard-to-trace transactions. Under the Patriot Act, money transmitters must register with the Treasury Department and obtain state money-transfer licenses. The law also requires them to report suspicious transactions and run programs to prevent money laundering. Even as the new regulations were being rolled out, agents pounced on a money transmitter that appeared to illustrate their worst fears. On Nov. 7, 2001, FBI and Customs agents raided offices of Al Barakaat in six U.S. cities, including Falls Church and Alexandria. U.S. officials say Al Barakaat, an important institution for local Somalian cabdrivers and hotel workers, also was used by al Qaeda to move money around the globe. Well before the Al Barakaat raids, U.S. agents had been targeting businesses that handled money for drug traffickers or other criminals, but the Patriot Act gave them more tools. Since it passed, authorities have arrested more than 80 people nationwide in connection with the illegal transfer of millions of dollars to countries including Pakistan, Iraq and Yemen, immigration and customs officials said. Authorities have not publicized many details of the local raids, since some of the targets have cooperated and others are under investigation. But officials say they are scrutinizing some of the firms for possible terrorist links. Immigrants and some financial experts say some of the businesses caught in the crackdown are small operations that do not know the regulations or cannot afford the expense involved, particularly in getting a state license. Although many states have required money-transmitting licenses for years, enforcement was not strict until recently, immigrants say. http://www.washingtonpost.com/wp-dyn/articles/A34538-2004May17.html |