Money launderers adapting, report finds
Prepaid cards seen as their latest tool
WASHINGTON -- Gift cards from stores and malls, phone cards, and other prepaid cards are emerging as ways for criminals to launder money they have gotten through illegal activities.
That was among the findings in a federal report, released yesterday, examining different methods criminals use to conceal and move dirty lucre.
As drug lords, terrorist financiers, and other money launderers have found it increasingly difficult to move money through the United States' traditional banking system, they are on the lookout for alternative methods, federal officials said.
Prepaid cards ''are an emerging cash alternative for both legitimate consumers and money launderers alike," the report noted.
The cards ''provide a compact, easily transportable, and potentially anonymous way" to store and access cash, the report said.
The universe of prepaid cards is diverse.
Some are referred to as ''open system" cards because they can be used to connect to ATM machines or for debit purposes.
The US Drug Enforcement Administration, Immigration and Customs Enforcement, and the Internal Revenue Service's Criminal Investigation unit have all found prepaid cards used in conjunction with bulk-cash smuggling, the report said.
''Drug dealers load cash onto prepaid cards and send the cards to their drug suppliers outside the country. The suppliers then use the cards to withdraw money from a local ATM," the report said.
