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Federal authorities have charged the managers of two L.A. check-cashing operations with money laundering.
Federal authorities Thursday charged the managers of two Los Angeles check-cashing operations with money laundering. The busts followed an investigation by the FBI and U.S. Immigration and Customs Enforcement.
Federal law requires banks and check-cashing services to tell the Treasury Department every time someone cashes a check for $10,000 or more.
In what appears to be a sting, “cooperating witnesses” presented bundles of checks to G&A Check Cashing and AAA Cash Advance from businesses that claimed to be health care companies. Officials say check-cashing firms are often used to launder “ill-gotten Medicare proceeds.”
For the past six years, one of the businesses in Los Angeles allegedly handled 800 transactions each in excess of $10,000 and paid out more than $20 million in cash without ever filing a report with the Treasury Department.
Three people in L.A. and four others in New York and Philadelphia were charged with violating anti-money laundering laws.
Unscrupulous check cashers "think that they are flying under the radar, but they are not," said Lanny Breuer, the Justice Department's criminal division chief. "We will not tolerate check cashing businesses evading anti-money laundering laws."
Such businesses enable people to cash checks without having to go to a bank or maintain a bank account. A check casher typically will charge a fee for this service.
Using check cashers to launder money is prevalent in health care fraud cases. Businesses convert proceeds of their ill-gotten gains to cash by presenting checks to check cashers who will not ask for proof of a customer's identity and will file false reports or not file reports at all.