Gone are the days when it was necessary to transport briefcases full of cash across borders. Now all money launderers need to do is pack a wallet full of prepaid debit cards.
For instance, one card promotes its annual load limit of $240,000 with “no link to your name or bank account.” It costs $500 and is “issued by an offshore bank and administered in Panama.” Yeah, that sounds legit.
An October report by the 34-nation FATF, the Financial Action Task Force that sets global anti-money laundering standards, cites just a half dozen laundering cases involving prepaid cards in their short history – each involving from $200,000 to $5 million and most in the U.S. Yet Tobon says they have in the past year or so become the preferred method for paying smugglers to move drugs across the U.S.
In Colombia, the financial investigations agency chief says he fears drug traffickers are repatriating huge sums from Europe and Asia with high-limit prepaid cards obtained there….
…”You enter (Colombia) carrying five cards in your pocket and that’s a quarter million dollars,” said Luis Suarez. “And of course they can be reloaded remotely.”
— using Western Union, Paypal or other services, without any links to the depositor’s identity.
More regulation and record-keeping is required to curb money laundering via prepaid debit cards but so far the industry has resisted restrictions saying that it would increase costs that would have to be passed on to the consumer.