Then a local reporter appeared. A few days later he called his bank and a letter from the state arrived, confirming what he had seen on social networks. His border neighborhood of El Paso was in the spotlight of the Government of Donald Trump.
Only a few months before, after the death of his father, Light had taken care of the small family business of monetary services, Valleuta Corporation, which offers a change of checks and currencies. Now her company-and all others like her in 30 postal codes disseminated by Texas and California-was suddenly obliged to inform the government of any transaction of US $ 200 or more, together with the customer personal identification data. For decades, the notification threshold had set at US $ 10,000.
The Treasury Department described the intensification of business scrutiny already very regulated as a crucial element of President Trump’s strategy to punish Mexican cartels and stop the flow of illicit drugs and money through the southern border.
But the owners trapped in the offensive said the new regulations were overwhelming. And the theory that they could be blind participants in the plans of violent criminals to hide dirty money looked little to the border communities and the working class clients they knew.
Several companies filed demands, and the judges of both states have ruled that the most likely is that the policy be illegal. In both cases, the judges were skeptical of the possibility that additional standards were effective in discovering the type of sophisticated transnational operators pursued by the government.
“Although the objective of the government to discover the illegal money laundering from drug trafficking is commendable, the tactics used here is similar to using a trabuco to kill a fly,” Judge Fred Biery wrote, of the US District Court. Uu. For the West District of Texas. Government’s methods continued, would probably cause “economic destruction to citizens respectful of the surrounding law.”
On May 30, Valleuta presented a new legal challenge separately, stating that the “ruinous charges” imposed by the Trump government had taken her to the edge of collapse.
Trump’s policy change
Scott Besent, secretary of the Treasury, said in March that the new policy had been conceived to capture any sign that the cartels were taking advantage of the US financial system.
The effort, led by the network for the repression of financial crimes of the department, or Finnn, for its acronym, focused on 30 postal codes in California and Texas for its proximity to an important border step, according to an internal memorandum without date that the Government presented before the Court.
The memorandum said that the network had decided not to include the border counties of Arizona or New Mexico, but “might consider expanding” the scope later. In its current form, the order expires in mid -September and can be extended.
In response, Texas and California’s financial services companies filed two demands in which they accused the government of carrying out a wrong persecution campaign that could destroy their livelihoods, without making a dent in cartels operations. A libertarian law firm of public interest, the Institute for Justice, has helped represent a small coalition of companies in each state.
“The idea that these border postal codes are a savage west in which everyone operates winking and letting cartels with canvas bags full of money whiten their money is false, that is, ridiculous,” Jeff Rowes, the main lawyer of the institute who participates in the challenges, said in an interview.
In fact, Judge Biery said that a man accused of drug trafficking and bleaching money-who appeared before him in a different case-laughed between teeth and then smiled when asked if he would ever use a “exchange house”, to “turn dollars into pesos in denominations of 200 to 1 thousand to wash the drug money.”
“No,” said the man. His method was the fraudulent purchase of real estate.
“If the colloquium had occurred in text messages,” Judge Biery wrote in a recent statement, “he could have written ‘hahaha'”.
Government’s attention to monetary service companies is only a piece of Trump’s internal agenda related to the southern border. He has considered the possibility of launching the US army against Mexican drug cartels, and has cited fentanyl traffic as justification to impose tariffs both Canada and Mexico, as well as drastic restrictions on immigration.
Last month, the Republicans of the House of Representatives approved their project of star law, which proposes a new remittance tax, the money that immigrants send to their countries of origin. If the project becomes law, or if the Trump government expands the order of the network for the repression of financial crimes, as it has suggested that it could do, the pressure on the general financial system that allows money to flow from one side to another could be considerable.
Much of the business that Valleuta is intensely local, turning dollars and pesos for tourists, people looking for affordable medical attention in Mexico and workers and relatives who visit their family.
“Construction worker, waiter, teacher, retired; he is an Amazon employee, a photographer,” said Light of his clientele. “It’s a kind of cross section: nurse, baker … They are normal people.”
The original demands, presented in April, argue that almost all the transactions carried out by these monetary service companies are usually at least US $ 200, and that the mere fact of being located near the southern border has made them pawns of an expanding data collection operation.
They argue that the drug cartels are more likely to resort to money bleaching with China and cryptocurrency to move cash in large quantities. Anyone who wants to send funds in small quantities could simply move to a nearby zip code to avoid scrutiny, the documents point out.
“To find more needles, Finnn is exponentially increasing the size of the haystack,” Rowes and his colleagues wrote.
A spokesman for the network of repression of financial crimes declined to comment on the demands, but said that drug traffickers and money bleachers often “introduce cash of smuggling and illicitly generated in the legitimate financial system.” They pointed out the results of a report published in April, according to which 32 percent of transactions related to the fentanyl supply chain were carried out through monetary service companies.
The network has issued similar orders of geographical selection in the past, even in important operations during the Barack Obama government.
In 2014, it focused on more than 2,000 companies in the Los Angeles Fashion District, on an operation against clothing wholesalers and other companies that the cartels used to buy wholesale products and resell them in Mexico. He used the same tactic in Miami in 2015, this time focusing on about 700 companies to disassemble a plot that involved exporters of electronic products.
In both cases, the limit was any cash transaction of at least $ 3000.
A “suspicion mantle”
Light inherited Valleuta from his parents, who began the business in 1981. When Texas began to regulate the sector years later, Valleuta received the first operability permit of the state: the license No.. 1. For decades, state officials trusted their parents’ experience when the time to update the rules, he said. The auditors who started came to form with them.
In 2024, with the previous threshold of US $ 10,000, the company presented just over 120 reports to the federal government. Between April 14 and May 14 of this year, Light said he had prosecuted almost 1,500.
Light said that a lifetime customers were concerned to deliver their identification, their social security numbers and other personal data for everyday transactions, knowing that their information was going to a federal database.
“This throws a mantle of suspicion about customers and companies,” he said.
In an affidavit filed as part of his lawsuit, Light said he saw at least 10 potential clients per day when they learned of the requirements. On one occasion, he said, he lost 10 clients in an hour.
In the statement, Light said that she and its general director-the only one other valute employee capable of filling the reports-had increased their working hours by 50 percent. The payment of overtime is not an option. And then there is the threat of economic sanctions for errors or delays in the presentation. The reports must be submitted within 15 days of each transaction, and even accidental errors entail a possible fine of US $ 1mil 400 by defective report.
“We have to make sure that everything is correct before presenting it. We cannot risk making mistakes or presenting the report too late,” he wrote, because an accumulation of fines could lead to bankruptcy.
Other border owners reported similar trails.
A company involved in the Texas demand, which used to submit five reports per month, provides that it will now have to submit about 6 thousand, according to a judicial statement. Another provided for an increase of 31 to 7,276 reports per month. Even according to the most optimistic calculation of about 20 minutes per form, which the Government has insisted that it is more realistic, that would require an additional workload of more than 2,400 hours per month, or about 300 additional turns of eight hours.
Andrés Payán Jr., another businessman who testified in the case of Texas but is not demanding, said that his small gas station and convenience store was affected by the policy of the Department of the Treasury due to the service collection service it offers. Since the new policy entered into force, said customers have decreased by 30%
“I can’t speak directly for them, but I think some are afraid to give their social security number to a gas station,” Payan said.
Payan has joined Light in the new demand filed in Texas last month.
In the case of California, Judge Janis Sammartino, appointed by President George W. Bush, prohibited the government from applying the new policy throughout the southern district of the State, exempting all the affected businesses of San Diego and the Imperial County.
But Judge Biery, appointed by Bill Clinton, limited the scope of his exemption to the plaintiffs of the original case before him, which means that most of the companies of the Texas postal codes continue to be subject to the new rules of the network of application of financial crimes. Light’s demand aims to change that, asking another federal judge to expand the precautionary measure to all of Texas.
“I don’t know if we are only the Indian bunches and this is going to be what they start up for everyone, or if it really is something temporary-I pray so that it is-because I do not see that this is sustainable,” he said.