The rise of online vendors offering to buy bulk gift cards is drawing the attention of investigators who believe the nascent industry may serve as an avenue for money launderers.
It's a scenario that federal regulators have long warned against: use a privately-owned automated teller machine and you might unwittingly walk away with the proceeds of crime in your pocket.
Displeased with proposed regulations, federal and state law enforcement officials are asking lawmakers and the U.S. Treasury Department to strengthen controls on the cross-border movement of prepaid access products.
Senators chastised the U.S. Treasury Department Wednesday for delays in regulating prepaid access products that can be used to smuggle drug proceeds from the United States into Mexico.
Concerns about drug cartel money smuggling could shape expected U.S. Treasury Department compliance rules on how companies should treat stored value cards, according to investigators.
The U.S. Treasury Department remains on schedule to issue regulations early next year that will bring stored-value cards under the purview of the Bank Secrecy Act, according to a government official.
Nevada Senate Judiciary members Thursday approved a measure that would allow law enforcement officers to freeze, and in some cases seize, prepaid credit and stored-value cards without a warrant.
The European Union proposed rules Tuesday on how electronic money might be issued, a step meant to further expand the market for prepaid and stored value payment products.
The U.S. Treasury Department's financial intelligence unit did not meet a number of its 2007 goals, including finalizing anti-money laundering rules for investment and commodity trading advisors, a government report released Wednesday revealed.
U.S. Senator Charles Grassley, who last year proposed a bill that would expand the power of prosecutors to include money laundering charges in a criminal case, will amend the proposal to account for "new and emerging trends," in stored value and prepaid cards and other issues.
Because AML regulation for cards is "unclear," they "provide an ideal laundering instrument to anonymously move monies associated with all types of illicit activity, without fear of documentation, identification, law enforcement suspicion, or seizure," according to a federal government report.