No one knows how big a role the cards play in moving more than $20 billion in drug earnings that U.S. authorities estimate crosses from the U.S. to Mexico annually. While anyone crossing that border with $10,000 or more in cash must declare it, prepaid cards are legally exempt.
"These prepaid cards are offering them (criminals) a great alternative to sneak into our financial system," Tobon said.
It was bank and wire-transfer records that enabled law enforcement to identify the 9/11 hijackers and their overseas cells. "Had the 9/11 terrorists used prepaid (stored-value) cards to cover their expenses, none of these financial footprints would have been available," a U.S. Treasury Department report observed.
The cards are barely distinguishable from credit or debit cards and the most versatile let users reload them remotely without having to reveal their identity. Some cards can process tens of thousands of dollars a month.
"I'm not so sure we have a sophisticated understanding of how to deal with this," said Richard Stana, who oversaw a report on prepaid access for the General Accounting Office, the U.S. Congress' research arm.
Prepaid cards also are changing the way law-abiding citizens, businesses and governments handle money. Walmart uses them to distribute payrolls, U.S. government agencies to deliver benefits and migrant workers to send money home.
Join us on our
Share this page with your friends
on your favorite social network: