N4T Investigators: Banks accusing border businesses of money laundering, locals say
A recent report from the U.S. Treasury Department pinpoints U.S. banks as the source for more than $300 billion a year in dirty money. That leads to big fines for banks. But on the U.S.-Mexico border, it’s small business owners who are being blamed.
Nearly a quarter million head of cattle are brought in to the U.S. from Mexico, and distributed throughout the country. It’s a legal business, regulated by the U.S. Food and Drug Administration, but legitimate business people on both sides of the border say they are being treated like criminals. Not by American law enforcement, but by banks.
Juan and Gracy Fleischer’s family have cattle-ranched on both sides of the Mexican border for more than four decades.
“I mean they tell us that the problem is the money-laundering. Well, we’re not money laundering. We buy cattle in Mexico. We sell it in the United States. We buy it in from ranchers and people who trade cattle that have been doing it for many years,” Juan said.
Financial institutions like Chase Bank have shuttered the accounts of some legitimate businesses that do business on both sides of the border. Chase confirmed to the News 4 Tucson Investigators that it started shutting down accounts along the border to comply with anti-money laundering regulations.
Big national financial institutions were targeted by the Department of Justice after organized crime syndicates used them to launder their money. The Sinaloa Cartel, under Joaquín El Chapo Guzmán once used the now-defunct Wachovia Bank to launder nearly half a trillion dollars. Other banks, like HSBC, have come under heavy scrutiny for allowing their systems to be utilized by the cartels.
A spokeswoman told us Chase Bank closed less than 5,000 accounts and said the bank started looking at closing foreign business accounts in 2013.
The closures mean that a lot of Mexican ranchers can no longer have accounts with U.S. banks. But they also can’t get paid by U.S. checks because Mexican banks won’t accept them. So ranchers recently tried paying by wire transfer Then this happened.
“In two banks, they closed my accounts, at Wells Fargo and Chase,” said Daniel Barancini.
Barancini is a Mexican national but he’s a U.S. businessman. He tried paying Mexican ranchers with wire transfers. But both banks closed him down.
He says he and other cross-border businessowners are being unfairly targeted.
“I don’t know if some people do it but we are here every day so it’s very easy to check,” Barancini said.
Wells Fargo sent us this statement:
“We continually evaluate our banking relationships to ensure we meet strict regulatory guidelines. As a result, we have made a business decision to close a number of customer accounts. Wells Fargo is committed to serving communities across the border states and to meeting the financial needs of our border customers.”
Washington D.C. has tried to intervene on these border residents’ behalf. The FDIC told smaller banks to take customers on a case by case basis. But larger banks like Chase and Wells Fargo are supervised by the Office of the Comptroller of the Currency, not the FDIC.
Stephanie Collins, with the OCC sent us this statement:
“As a general matter, the OCC does not direct banks to open, close, or maintain individual accounts for particular customers, nor does the agency encourage banks to terminate entire categories of customers without regard to the risks presented by an individual customer or the bank’s ability to manage that risk. Banks must have adequate controls in place to manage the risks for their products and services, and they are expected to assess the risks posed by customers on a case-by-case basis, implementing controls commensurate with the risks associated with each customer.”
Meanwhile, Fleischer isn’t holding out much hope for a solution. He’s still paying by wire transfer which has cost him thirty thousand dollars. He hopes the banks don’t grow suspicious of the wire transfers he’s been sending into Mexico. He wants the government to step in more aggressively to control bank closures.
“They’re the only ones who have control what the banking system does as far as international trade and the fact they’re not coming in and creating a some kind of an organization where you can register what you do,” Fleischer said.
