THE NEW YORK TIMES

FRIDAY, SEPTEMBER 5, 1997

Cash Transfers Monitored in Effort to Track Drug Money

By BENJAMIN WEISER

'Treasury Department said yesterday that it is expanding a crackdown on the laundering of

drug money from the New York region to focus on electronic cash transfers to Dominican Republic.

The move follows a similar Treasury last year, which focused on transfers from New York to Colombia. That order led to a sharp on in the amount of narcotics proceeds transferred between the two areas and a 400 percent increase in seizures of drug money, Treasury official said.

The latest order, which went into effect on Tuesday, will, require 15 money transfer companies in the New York area and about 3,400 smaller money-wiring agents, which operate out of storefronts, to report to the Government on transfers of $750 or more to the Dominican Republic.

Under Federal bank secrecy laws, money transfers do not have reported unless they exceed $10,000. Treasury officials said the $750 limit in the New York-Dominican transactions will make it harder for narcotics traffickers to move large amounts of money, forcing them to break sums into much smaller amounts to avoid detection.

The Treasury Department, with the aid of other law enforcement and intelligence agencies, has been taking more aggressive steps to curb the laundering of profits by drug cartels, officials said. Last spring, the Treasury proposed rules that would expand the reporting requirement on $750 cash transfers from any part of the country to destinations anywhere in the world.

Raymond W. Kelly, the Treasury's Under Secretary for Enforcement and a former New York Police Commissioner, said in a telephone interview that the 15 money transfer companies in the New York area send more than $500 million a year to the Dominican Republic, of which about $100 million is drug money.

Last November, Federal prosecutors in Manhattan announced the indictment of a money transfer company in the Bronx, Remesas America Oriental Inc.. Five current or former employees were charged in what was described as a scheme to launder millions of dollars in proceeds from unlawful narcotics trafficking to the Dominican Republic. The case is scheduled for trial later this year, prosecutors said.

The latest order, and a second one aimed at electronic transactions from Puerto Rico to the Dominican Republic, will likely force narcotics traffickers to take the more risky step of smuggling cash out of the country, in trucks, boats, containers - even in bowling balls and coffins, Mr. Kelly said.

"We don't want it to go out, but ft makes it easier for us to seize it and ups their cost of doing business," he said. "We want to attack the profit motive here."

The Treasury said the order was requested by Federal prosecutors in New York, New Jersey and Puerto Rico and other law enforcement agencies. Mary Jo White, the United States Attorney for the Southern District, said yesterday that such orders had proven to be "extremely effective in stemming the flow of drug money through money remitters."

Ezra Levine, a Washington lawyer who represents the Non-Bank Funds Transmitters Group, which includes companies like Western Union, said he doubted that the initiative would stem drug dealing and said it was going to increase the burden on honest companies.