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June 10th, 2009
09:50 AM ET

Official: Drug lords using 'gift cards' to smuggle money

Arizona Attorney General Terry Goddard says Mexican drug cartels use gift card technology to smuggle money across the U.S. border.

Arizona Attorney General Terry Goddard says Mexican drug cartels use gift card technology to smuggle money across the U.S. border.

The state of Arizona is finding itself on the front line of the war against Mexican drug cartels. Their attorney general will meet this week with leaders of other southwestern states to try to stop the flow of drugs across the border with Mexico. To do that, they say they will have to stop the flow of cash as well, including a new way smugglers are trying to get past the cash-sniffing dogs.

Lawmakers say gift card technology is now making it easier for drug lords to move cash across the border undetected. These 'stored value instruments' are often issued by offshore banks and allow large sums of money to be moved throughout the world. Arizona Attorney General Terry Goddard spoke to Kiran Chetry on CNN’s “American Morning” Wednesday.

Kiran Chetry: Walk us through these gift cards. How have they become so useful to the drug cartels?

Terry Goddard: This isn't your Starbucks or Best Buy gift cards. What we're talking about here are stored value instruments, which have chips in them…that basically can store fairly large amounts of cash. The total amount is undetermined; it depends on who the depositing bank or financial institution is. As a result, since they're not considered monetary instruments, they can be taken across the border and you don't break any laws. It is a huge loophole in our financial crimes observations.

Chetry: So you're talking about gift cards, these blank cards that can be preloaded with large amounts of cash. How do they cash it in once they get across the border?

Goddard: These basically are your passport for cash. They are your way of getting into a financial institution. If you're buying coffee with them, obviously your return is not that big. But if you've got a participating financial institution, say in the Cayman Islands or in Central America, then all you have to do is go to a group that corresponds with that financial institution, present your card and take out your cash. So there's nothing at the border that you have to display. Under U.S. law, these cards, however much they may be worth are not considered financial instruments. Therefore, the border patrol, customs agents when they see them there is no violation because they're not part of the money that you're required to declare. And they can't read them, which is a big problem. Basically we need to have transparency so that if a law enforcement agency looks at one of these cards, he or she knows how much it is worth.

Chetry: So you want Congress to take up this issue. You made some recommendations about this situation. What do you hope to achieve and are they listening to your concerns about this?

Goddard: Well, they finally are. This is not a new concern. FinCEN, the Treasury Department report over three years ago, said here's a loophole that is causing large amounts of money to go across the border undetected. And my goal and our goal in law enforcement is to cut off the flow of cash to the organized criminal cartels that are bringing drugs and people in to the United States. This is one way we can do it.

Chetry: It seems the other big problem is these banks and these largely unregulated countries like the Cayman Islands don't have mechanisms in place that follow suspicious transactions, large amounts of money. Is there any way that the U.S. government or the states’ attorneys general can do anything about that?

Goddard: As a state attorney general, I cannot. However, the U.S. government being involved in international financial money laundering observation and interdiction can play a major role. But this is an international problem. You put your finger on it. There are huge amounts of money being electronically transferred across borders throughout the world. Not just to Mexico. And so we need to play a much more observant role if we're going to cut off this flow of illegal cash. That's a big, big problem. But let’s start with these gift cards. They're a huge loophole in our currency transaction regulation.

Chetry: How big of a dent do you think you'll be able to put in drug trafficking by being able to get this gift card loophole closed?

Goddard: Nobody knows, because nobody knows how much cash is going because it's not reported. So how much is going across the border into Mexico? I cannot tell you. But it is one source of money that is completely below the radar screen. It's not being observed. It's not … being sniffed by cash-sniffing dogs. It is an entirely different way to smuggle money. Let's bear in mind that organized crime depends on money. They're not in it for the love of the game. They're in it for the cash. If we can cut off or restrict the cash we'll go a long way to cutting down the cartel violence in Mexico.

Chetry: You made these recommendations to Congress. We'll see what action, if any, they're prepared to take.

Goddard: I hope they take action soon.

Filed under: Drugs • Mexico
soundoff (177 Responses)
  1. Montana

    Legalizing the drugs would just create a problem that was a thousand times worse... a nation full of heroin and coke and meth addicts. It would become as widespread as tobacco and alcohol and prescription pain pill use is now.

    We have a paradox here. We are in an unwinnable war, which MUST be fought.

    June 10, 2009 at 1:23 pm |
  2. Brandon

    Cartels will ALWAYS find a way to outsmart the system, just as bootleggers did during Prohibition. The answer is simple: legalize drugs. Perhaps not all of them, but at a bare minimum the least harmful ones (marijuana is a no-brainer here). It's the only way to completely and utterly defeat the foreign drug cartels (and a great way to profit at it simultaneously).

    June 10, 2009 at 1:22 pm |
  3. arw

    The drug war is a farce. It is evident there is no way to win a war on drugs, yet we continue to pour money into it. Drug laws were originally passed under false pretenses, and today it has turned out to be one of the biggest money rackets in existence. The government makes money from it on both sides. Do you really think that 5 tons of cocaine are destroyed once it is confiscated?

    Government has no right to protect you from yourself, only from others. When will the public demand that government respect our rights? We are a republic, not a democracy—a fine but crucial distinction. The public would be far better served if drugs were made legal but controlled. There would be hardly any accidental overdoses or toxic side effects from poor quality control. Crime would be reduced substantially (if they were sold for fair value which most cost but a pittance to make). Built into the price could be taxes that would pay for those who did become addicted but wanted to turn their lives around.

    Quite frankly, I see no downside to legalizing drugs. It will not lead to greater drug addiction. You could put a ton of heroin in my reach forever and I would never touch it. Those who want to do drugs do them already—both legally and illegally. Most stop substantial drug usage as they take on greater responsibilities in life. And for those who do become addicted... I mean, really, why kick a person when they’re down? Nobody incarcerates people for the many other kinds of addiction people fall prey too.

    So wake up people. Show a little tenderness. Abolish laws that restrict your rights to live your life as you see fit, laws that cannot possibly do good or make the world a better place. Give up your alcohol and grow a little pot—legally, of course. Nobody ever died from smoking that. Recreational drug use just might free your mind.

    June 10, 2009 at 1:21 pm |
  4. Homer


    June 10, 2009 at 1:20 pm |
  5. Shake

    If the cartels are moving money with gift cards then the politicians are doing it too. The ponzi schemers are taking money out of the country as well. The loophole was not put in place for drug cartels. This little story has such major implications and we thought swiss banks and off shore accounts were big.

    June 10, 2009 at 1:19 pm |
  6. Chris

    Clearly this was written for those uninformed about how these stored value cards work. Issuing banks screen these deposits as part of their AML practices.

    But more important still is the legalization issue. Legalize it and tax it, problem solved.

    June 10, 2009 at 1:19 pm |
  7. Damian

    mexico doesnt only smuggle weed. heroin, Amphetamines, Cocaine, Ecstasys, you name it, they smuggle it.

    June 10, 2009 at 1:19 pm |
  8. Pep

    Death sentence for all drug trafficers, life in prison for all drug users. end of problem.

    June 10, 2009 at 1:18 pm |
  9. Dave Mishem

    Why are law enforcement people such morons?

    Letting them "read" a card will be like giving a monkey a microscope. Ever heard of steganography? Plausible deniability? You can hide data in a reusable Macy's card if you know how.

    The problem is in data inspection by the authorities. We've known since the 90s that you can't do it. And there are a LOT of mathematicians who value privacy more than the drug war, and will continue to make this the status quo.

    June 10, 2009 at 1:18 pm |
  10. Rick O.

    US government is a bunch of idiots and the cartels take us for that!
    Legalize Dummies! Legalize just pot to start and see the effect...answer: more tax dollars, less police and jail house costs. The only downside: Probably put a lot of lawyers out of business. Oh darn!
    And we let these ding-dongs make decisions for the country and its people...America, Wake up!

    June 10, 2009 at 1:17 pm |
  11. dan

    I have read many of these posts by users. The only one that makes any sense at all is legalize the drugs. Forget trying to combat the drug cartels, forget trying to charge drug users with murder. that won't work, and it's ridiculous. Legalize drugs. If you want leave heroin illegal or something that is fine. Heroin is very dangerous, and not NEARLY as lucrative as pot and other more mainstream drugs. Things like POT for god sakes need to be legal. ITS EVERYWHERE ANYWAY.... and I do mean E-V-E-R-Y-W-H-E-R-E... Those of you who do not smoke pot or are out of the loop would be SHOCKED to see how much pot is out on the streets. AND ITS NOT EVEN FROM MEXICO. It comes from EVERYWHERE. Oh by the way YOU CAN GROW YOUR OWN POT RATHER EASILY... SO maybe just maybe its time to stop wasting money looking for everyone in the world with a grow light set up in their basement... By the way alcohol is legal and the country didn't fall apart. Alcohol is far worse for the body and mind that marijuana..... Look at how alcohol has ruined people and families. Try to find a person who has been ruined by pot... Yeah exactly, you can't... Anyone who is opposed to legalizing pot simply has no idea what it does. They must have never tried it. Pot really is not very strong. Even "today's pot" is not very strong. If you are worried about drug trade stop heroin!!!!!! You may actually save some lives in the process...

    June 10, 2009 at 1:16 pm |

    Admit it, we americans are a bunch of drug addicts. Don't blame the Mexicans, Colombian, and whom ever else we want to blame. We are a nation of addicts.

    June 10, 2009 at 1:15 pm |
  13. stephen

    With the kind of money the cartel is making, they will always find a way to do what they want to do. It can't be won. Exactly as Brian said, "Sure, let’s spend another billion dollars cracking down on these gift cards. By the time that’s done, the next trick will come along and require another billion dollars to counteract."

    This war on drugs is so ridiculous, it makes me think the proponents of it are just as doped up as the people they're trying to persecute. Marijuana is bad- take xanax, or oxycotin, or klonzepam instead. Support American drug dealers, not mexican.

    June 10, 2009 at 1:15 pm |
  14. Brtandon B

    I agree... The drug war is a money pit 1.3 Trillion dollars between 1992 and 2002. Drugs are cheaper and more available. Just give up for the sake of the country. Tax and regulate drugs and spend the proceeds on treatment and rehab of addicts. It is just a waste of 50 billion dollars a year.

    June 10, 2009 at 1:13 pm |
  15. Kyle

    Uhhh..... this is no surprise Wal-Mart has a similar card/ accounts that one can transfer money across any state to someone else.... same thing smaller scale

    June 10, 2009 at 1:13 pm |
  16. RevRayGreen

    legalize a plant that isn't a drug, drug dealers sell it because it's illegal but it can be a cure for many illness, wanting to feel good one of them.

    cannabis is an ancient healing herb and relegalization is the solution.

    June 10, 2009 at 1:12 pm |
  17. A Man In Houston

    After watching a program on National Geographic and finding out the US spends 35 billion on fighting marijuana. I was angry. I also learned that these cartels make 68% of their money on this drug alone. We are fighting something that should be legal!! This money and possible new industry would help save dollars, earn dollars, create jobs and cripple the cartels’ cash flow. Now we are going to spend billions on fighting gift stupid!

    I see religion get in the way of this matter and the government that’s irresponsible and more concerned about votes. Being here in Texas, I see the narrow mindset of this topic but, it's an "issue" that’s growing and I know law enforcement can’t stop it. People wake up! It's time for legalization NOW! How many more people have to die? How much money has to be wasted that can go to education, research, the homeless, etc...

    America....get your head out of the 50's and realize what needs to be done. We are allowing a law from the early 1900's to affect us and false understanding of a drug. It’s time to change the law of a century ago.

    June 10, 2009 at 1:11 pm |
  18. Felix

    Sure legalize drugs.

    There will still be "illegal" drugs because the "legal" drugs will cost way to much due to taxes. Legalization alone will not fix the problem. To think so is kind of naive.

    June 10, 2009 at 1:11 pm |
  19. jdmeara

    Give up the war on drugs. We are in the midst of a huge financial crisis. Direct the money to places progress can be made. Tax the dope and knock the black market of marijuana out. Let it be left to the entrepreneurs of our country. Not only do they smuggle into the country they are using our national parks. All over whether or not some people can get high, which is practically a pre-requisite for being president in this country now. Obama – Check. Bush – Check. Clinton – Check. That's 20 years of our chief executive that have experience with a substance we wage a multi-billion war against.

    June 10, 2009 at 1:11 pm |
  20. Bard

    No wonder the country is in such a credit mess! The government encourages people to use credit cards and other easily trackable financial conveyances through its failure to print practical-denomination bills (how many $100 bills do you need to buy a car? or a house at a courthouse auction where cash is required? - why don't we have $1,000 and higher denomination bills?) and the promulgation of the stereotype that if you carry around a lot of cash you must be a drug dealer, so your money can be confiscated on the assumption that you must have obtained it illegally.

    What obnoxious snoops!

    June 10, 2009 at 1:10 pm |
  21. T

    I agree with Bryan. Legalize/decriminalize drugs and tax it. This is another way for a failed system to gain access to our privacy. From what I read on CNN they are trying to create a bill that will have more "transparency" for law enforcement officers see the value on these gift cards. So what happens if they decide to see the value in your bank account by just grabbing one of your atm cards..

    Is there no privacy in the US anymore?

    June 10, 2009 at 1:10 pm |
  22. David Rogers

    Also, I think it is clear and evident that the American people want legalization.

    June 10, 2009 at 1:09 pm |
  23. John

    The answer is not another intrusion into privacy, it is getting the money out of the business. When was the last time that the Seagrams boys had a shoot out with the Jack Daniels mob? It stands to reason that if we can't stop the drugs coming in, we won't be able to stop the money going out.

    Find legal distribution methods, and treat drug abuse as a public health issue and not a legal issue. The war on drugs is 40 years old. It has cost too much and has provided far too few returns on investment. One of the biggest costs has been in terms of our personal liberty and privacy.

    Repeating the same action that provides a negative reaction and expecting a different outcome each time you do it is the definition of insanity.

    June 10, 2009 at 1:08 pm |
  24. David Rogers

    The answer to this problem is real simple. The solution to all drug lord related issues can be solved by the American government right now if they really cared about smugglers laundering money based on illicit sales of drugs. Legalize. If you legalize then these "Drug Lords" won't be lords of anythings. That's how you win the war on drugs, you take away their black market by legalizing.

    June 10, 2009 at 1:08 pm |
  25. Helen

    They can't legalize the drugs because they haven't found a way to legally to check to see if you are under the influence that is foolproof at this point. So when you get stopped they don't have a any roadside games to play to check to see if under the influence, and to what level. When science catches up to that point you will see legailization of certain drugs, but until then, it's not going to happen.

    June 10, 2009 at 1:07 pm |
  26. crazytrpr

    Ok 1 ) legalize weed so it stops being sucha gateway drug for the hard stuff.

    2) What the hell are people thinking banning stored value or gift cards? With as power mad and money grubbing governments we have at all levels, cash falling out of use and people want "ban" these things under the guise of on the war on drugs.

    Has anyone really thought out the ramifications of a cashless society be? Stalin would have had an orgasm at the thought of a cashless society. And not because he was dedicated communist either. The power governments and well connected would have plus the paranoia knowing that every transaction is monitored & traceable would be pretty scary. As society become less free it will become a nasty little pressure cooker with a host of un-intended consequences. Not the least of which would be a black/gray market for anonymous money

    June 10, 2009 at 1:07 pm |
  27. dan in Tucson AZ

    The fed and the US government would like nothing better than controlling the flow of international money. That is where I see this going. Seems like a good excuse for our government to get more control. Well it won't happen, and the private banks can see right through this charade.

    June 10, 2009 at 1:06 pm |
  28. Eric

    WOW!!! Billions of dollars in tax money and you just figure this out??? COMMON SENSE!!!!

    June 10, 2009 at 1:04 pm |
  29. Tevil

    legalizing all drugs will just make problems worse. legalizing pot will do nothing (even though pot should be) because people dont usually get shot over pot.

    you CANT legalize heroine/crack/coke/X/ETC because they are overly damaging drugs that inadvertantly involve others.

    children, people who get mugged for drug money. these drugs people get shot for are killers themselves.

    problem here is mexico itself. they need to be regulated by a big brother....... US.

    mark my word, next 5 years PR is the next state and Mexico is the next common. WE NEED to get in there and start coming down hard or LITTERALLY tell them we are putting up a shooting wall (berlin wall). start telling the locals they will have NO CHANCE of EVER coming to the states and i bet they will all change their tunes fast. its sad because i have been to bad parts of mexico and none of those people deserve the lifestyle they are trapped in.

    removed all traffic to and from mexico, basically give them the choice.

    1) let us in and let us start cleaning you up in return for a,b,c and in return we get a safer enviroment, some hard working people and new land that companies can not escape to for tax breaks.

    2) make them national pariahs and force them into a cuba like state, which we all know they WONT go for.

    June 10, 2009 at 1:03 pm |
  30. Aaron

    Here is how this works:

    Drug Zar walks into reputable Swiss bank and purchases a $200,000 "gift card" with cash under an assumed name. Swiss bank doesn't file suspicious activity report with the FBI so no record is generated in the US. Misc Drug lacky enters the US via plane, train, or automobile with the "gift card" stuck in behind his mastercard. Misc Drug lacky walks to the reputable national bank branch that has a relationship with reputable Swiss Bank and sticks the card into an ATM or goes through the teller line and withdraws however much he needs. The name doesn't appear on the OFAC list so no report is generated and the transaction isn't stoped. No large cash deposits are being made so no record goes to the FBI. Outside crimal and/or terrorist group has succeeded in smuggling cash into the united states.

    June 10, 2009 at 1:03 pm |
  31. James

    Well, it would seem that the Drug Lords or whomever thought this one up is smarter than it would appear.

    June 10, 2009 at 1:01 pm |
  32. adam12

    Just to add, why can't gift card companies add a metal strip or plate that sets off an alarm like when shop lifters get caught at the store? This sounds like such a simple problem to divert. What's next, no gold sales in the U.S. because drug dealers are accepting gold?????

    June 10, 2009 at 1:01 pm |
  33. Tyler

    Time to finally legalize drugs, tax them, and not only see the rewards from that taxation but also stop funneling money down the black whole which is the US War on Drugs.

    June 10, 2009 at 1:00 pm |
  34. Common Sense

    Ok the gift cards are filled with unknown amount of cash and than taken to shady banks in Cayman Islands and Central America and that point. However, how did the gift cards get filled. It has to happen here. So there are shady banks here too. So before pointing fingers at Cayman Islands and Central America lets look at ourselves. If a developed country like ours can stop banks from depositing unknown amounts of money in gift cards than I think it is a little bit too much to ask other countries to control on cashing the gift cards.
    So Mr. Attorney General are you looking in how to catch the banks here too or do thay have lobbiest who pour campaign money? This is all linked. Politicians, banks, drug lords...all of them are linked to make money. A catch here and there is to fool us the general public who in the end pay for all this.

    June 10, 2009 at 1:00 pm |
  35. Justin

    Gift cards themselves don't have names attached to them. Although Credit and Debit cards do. Just as Cash, Giftcards work the same way. I can see why they would use it, but there was a way to ban it, they would use a trade good. Or, they would deal as we deal with China.

    We send goods to China, China trades with North Korea, North Korea trades with Mexico. You can't win.

    June 10, 2009 at 1:00 pm |
  36. Cindy

    It's good to see so many commentors "seeing the light" on the failed War on Drugs and the need for legalization.

    June 10, 2009 at 1:00 pm |
  37. CM

    This is just the latest scheme of the cartels and my question for our government is when are you going to stop throwing our money at this problem without actually having a plan?! maybe im just naive but it seems pretty simple to me: legalize the most popular drug in the U.S., marijuana, and cut the cartels off to their number one money maker. Then the U.S. can regulate the growth and distribution of marijuana and maybe oh i dont know help this country get out of this recession!! people all ages are smoking up everyday for both medical and recreational reasons so instead of punishing them why not make money from them? Our government just needs to wake up and realize that no matter how many "preventative" measures they take, they are fighting a much more powerful and wealthy opponenet who will always come back stronger unless the U.S. takes an offensive approach and hits them where it hurts the most: their wallets.

    June 10, 2009 at 12:59 pm |
  38. pgh

    The following question must be asked. Which is more harmful, drug use by citizens or giving the Government the power to track every single one of your financial transactions?

    It's sad to say, but the decision to abuse drugs is personal. Most of us make the right choice. If we allow the government such unlimited access to every aspect of our daily commerce, it will affect each and every one of us an anyone who thinks that such power won't be abused is dangerously wrong.

    The most despicable aspect of the drug war has been its effect on justice. Property seizures provide an incentive for corruption. Prison overcrowding as a result of mandatory sentencing robs us of both our tax dollars and the contributions that many of those incarcerated might make to society. We have, in essence, provided unlimited financing to the scum of the earth in the form of drug profits. Yet none of this has, in any way, reduced thedrug problem. I'm reminded of the defintion of insanity as being doing the same thing again and again and each time expecting a different outcome.

    It's time to end the madness and treat drug abuse as a social problem, not a ciminal one.

    June 10, 2009 at 12:59 pm |
  39. Jessica

    i'm utterly confused why we can't even – at a bare minimum – have an honest discussion about legalizing marijuana. the pro's, the con's...and how we could save money, heck MAKE money...while trying to address addiction (which is a problem, but people can be addicted to so many things, alcohol, gambling, sex, ect...why single out marijuana as infinitely worse than the others?)

    there's very little logical reasoning why it's illegal...and we have more and more mounting reasons as to why to legalize it!

    June 10, 2009 at 12:58 pm |
  40. Jon

    musicjunkie – oh yea! Actually if you look at it during a recession the BEST companies to put your money into are tobacco and alcohol! I believe they've posted pretty good profits during this ENTIRE economic downturn

    June 10, 2009 at 12:57 pm |
  41. Andy

    This is getting ridiculous. Stop wasting resources to prohibit plastic coming over the border and just legalize drugs altogether. I'm sick of wasting my tax dollars on your pathetic War on Flowers

    June 10, 2009 at 12:57 pm |
  42. adam12

    Anyone ever try to buy a prepaid gift card bearing a visa or mastercard logo? You have to show a valid state ID now to get one. Even when you buy them online, you must fax a valid state ID copy before they will send it. President Bush made it this way after 9/11 to cut terrorist funding this way. Arizona is either way behind the 8 ball or just real slow. They should of made these changes way back when the rest of the country did.

    June 10, 2009 at 12:57 pm |
  43. FrancV

    This business will always be ahead of the game – they have no rules or anything to lose.
    Make pot legal and you'll hit them in the pocket, tax it and we can have a real fight on our hands.

    The only ones winning here are the politicians and the makers of of police equipment

    June 10, 2009 at 12:56 pm |
  44. Justin


    Your idea is flawed as well. If we confiscate gift cards at the border, how are you supposed to access your cash in different nations?

    June 10, 2009 at 12:56 pm |
  45. Juan

    These guys are amazing... (I'm not talking about the druglords)... I think the key to stop the drugwar is to:
    1) Stop buying drugs
    2) Stop selling weapons to drugdealers

    I guess by doing this the drug problem will be over...however their jobs and black market economy would be over too.

    No wonder why they keep "fighting.."

    June 10, 2009 at 12:54 pm |
  46. Justin

    The ongoing debate. What is the real issue at hand?

    We know how to easily solve this issue. And we don't.

    There is going to be no end to the drug war. It's impossible.

    After Billions of years, these items still exist. Marijuana has only been illegal for 40 years.

    We have had nothing but problems with the system used to help counteract the marijuana situation.

    Why is it so hard to have reform? I could go back to saying it was illegal to ban it in the first place, but since the start of the constitution, we have done everything we can to modify it, although the document itself says it cannot be modified.

    We lost since day 1. Government has full power. Prove me wrong.

    June 10, 2009 at 12:54 pm |
  47. bryan

    i cant believe drug cartels are ahead of Govt before govt find it out. Govt need few more step ahead before drugs cartels do!.

    June 10, 2009 at 12:54 pm |
  48. jeb b

    this is why you see mexican restrauants popping up all over the united states. sometimes 4 and 5 on a corner. the start up bussiness is a way to clean that drug money from ma and pop stores who send money orders back south of the border to automotive mechanic and body shops. to you name it. all these nova costra mob entities are just lining up in the united states. where is ellioit ness when we need him. cause who's in there now, seems to me like their always slow out the shue

    June 10, 2009 at 12:54 pm |
  49. Pete

    Let's create a brand new method for concealing large amounts of cash.....what could possibly go wrong? I mean – how could be brilliant financial wizard possibly foresee that criminals might use them to, oh, I don;t know, smuggle and transfer large amounts of money?

    The time to legalize, oversee, tax, and tax certain drugs is 30 years overdue. Make the hits legal, bring the price down to what people pay for a regular cigarette or shot of liquor – and I have a feeling there will be no further market for criminals in the product(s).

    Logic 101. Something any child of 12 could figure out. And yet it continues to elude the grasp of our politicians.

    June 10, 2009 at 12:54 pm |
  50. phat

    so when is obama going to DO HIS JOB and close down the border from ALL ILLEGAL ACTIVITY?

    June 10, 2009 at 12:53 pm |
  51. Chad N.

    Once again, in order to get to the few criminals engaging in this process the average every day guy has to suffer. If they start checking these "gift cards" in order to catch the drug cartels, the cartels just move on to the next method of moving money that is not detectable. Meanwhile, the average person is now having to declare the value of gift cards, have them scanned or whatever they decide to do adding to waits, more loss of personal liberty and further invasion of privacy.

    End result, people suffer and the cartels simply move on.

    This is just stupid.

    June 10, 2009 at 12:52 pm |
  52. David Mostel

    The drug cartels pay off the politicians and government officials not to legalize drugs. If the cartel pays out 10% of what they bring in it's a lot of money for these politicians and officials and a small amount for the cartels. Corruption is everywhere, the U.S.A., Mexico, S. America Etc. Legalization is probably the answer as proven by the repeal of prohibition but before this can be done we have to solve the corruption problem.

    June 10, 2009 at 12:52 pm |
  53. Benjamin

    Legalize it!

    June 10, 2009 at 12:52 pm |
  54. Major

    I completely agree with the comments advocating the decriminalization of marijuana. However we should also realize that international money laundering is a component to many different criminal enterprises, not simply limited to marijuana or even the drug trade for that matter.

    June 10, 2009 at 12:51 pm |
  55. Richard Martin

    Congress won't touch the issue. The RNC has been using those exact gift cards as ways of avoiding government oversight for years by paying or rewarding "volunteers" to political campaigns. They have to report cash donations to campaigns but they don't have to report gift cards given to campaign staffers during campaign events. It's soft cash for everyone, not just drug lords. It's also fairly untraceable. Can't accept a cash donation? Lower your out of pocket expenses by having your campaign staffers not cost anything!

    June 10, 2009 at 12:51 pm |
  56. TommyBoy

    So the law will have to be written very carefully. Or the U.S. would be search all tourist carried bank and gift cards... Would they hold a card of some Middle Eastern prince or European with millions on his bank card as smuggler?

    June 10, 2009 at 12:51 pm |
  57. C

    Yeah because making harsh penalties has stopped everyone from using drugs in every country. The point really is you get the death penalty for drugs in Singapore but people still do it. Making the drug penalties higher makes the cartels and users far more dangerous and equals far more death. We can't train the Mexican guard because more than half of them work for the cartels. We can't beat the cartels in a war because they have more money and soldiers than you can even imagine. If you fight a war on drugs you are fighting a war on your own family and friends. No one should have the right to tell anyone what they can and can't put in there bodies. It's been proven with Portugal and the Netherlands that legalization brings a short increase of use followed by a meteoric fall in drug use and violence. Prohibition has never worked for any drug or drink anywhere. someone will always find a way to profit and then become violent. People are never going to stop using and wanting. The demand isn't going anywhere. Locking up non violent drug users is a waste of time and my tax dollars.

    June 10, 2009 at 12:51 pm |
  58. Mike

    And, it doesn't even have to be large deposits. With electronics, they could use computers to send thousands of small transactions.

    June 10, 2009 at 12:49 pm |
  59. skb

    Confiscate ALL gift cards at the border . . . no deposit, no return!! Second choice: Xray all people crossing the border with enough "bernoulis" to delete any information on any card.

    June 10, 2009 at 12:48 pm |
  60. Tonky

    Why are these cards even necessary? All you need is a computer and an internet connection to access funds electronically. It does not matter the conveyance device.

    Isn't actual hard currency still being used to buy drugs on the street level?
    These electronic cards are a red herring.

    What we need is a way to regulate giant deposits made in the Caymens by these violent parasites.

    June 10, 2009 at 12:48 pm |
  61. Joe Taxpayer

    Excellent. I did not think about how great this would be to hide money from the ex-wife's lawyers. Money orders also work well for small amounts under 5K too, but they have a face value stamped on them.

    This is probably why most 'gift' cards have limits of $300 dollars or so. International bank gift cards...very interesting.

    June 10, 2009 at 12:48 pm |
  62. Jim

    Legalize it, regulate it and tax it. Problems solved...

    June 10, 2009 at 12:47 pm |
  63. Erik

    I would love to have the government be able to check how much money is in my bank accounts whenever I cross the border... NOT.


    June 10, 2009 at 12:46 pm |
  64. M.R.

    I have the same question as MarkB. has...

    These cards have to be loaded with money somewhere in the United States, right? The article doesn't talk about that at all. How is the money being put on these cards?

    June 10, 2009 at 12:45 pm |
  65. jamie

    Legalize drugs and stop the assault on civil liberties!

    June 10, 2009 at 12:45 pm |
  66. Mike

    Why does it even have to be gift cards? The money is out of US control as soon asit is deposited in an off-shore account. The card itself doesn't even have to move – just have two debit cards linked to the same account. Are our regulators that naive?
    The loophole is in regulating the banks themselves. Any large deposits into any institution in the world need to be tracked.

    June 10, 2009 at 12:45 pm |
  67. Ben

    The problem doesn't really stem from these "new" ways that drug cartels are laundering or keeping their money. Goddard even mentioned that this has been a concern for over three years.

    The problem stems from the sea of red tape that people have to swim through to get anything done. Let's say congress actually did start working on it three years ago, I wouldn't be surprised if it was still ongoing, and by the time they get it resolved, the drug cartels would have another new way to get things done.

    June 10, 2009 at 12:45 pm |
  68. Angie

    I agree about thinking outside the box. You can put limits on the cards but than how does one police how many cards they can have. The problem has to start in the global bank markets. Than one has to decide how much money is too much money to deposit at one time before you can even patrol this. The government needs to get people who have the street smart skills to think like the drug cartel people.

    If the codes within the cards are numbers and this is truly cash – find out where these cards are being created or are these cards fictitious and there really wasn't any cash to begin with – maybe these cards are like counterfeit but in the twenty-first century style with cash cards. How does anyone really know if this is real cash.
    Something to think about.

    June 10, 2009 at 12:44 pm |
  69. Larry Adamski

    Just another attempt at destroying our civil liberties in the name of the all important (yet totally failed) War on Drugs.

    June 10, 2009 at 12:42 pm |
  70. Jon

    The only people to blame for the cartels are ourselves. Drug smuggling is a profitable business, why? Because of demand. It's a demand driven market. If we take out one smuggler out another will jump to take his/her place because the rewards are far greater than the risk. The only real way to get rid of these people is to get rid of the demand. If noone wants to buy the drugs, then the smugglers will stop bringing them in.

    Many people use drugs recreationally. If we make the penalties harsh enough for simple possession, those people will stop using and the cash flow will dry up. It's not a difficult concept...

    June 10, 2009 at 12:42 pm |
  71. Rick McDaniel

    It is my view, that governments that want to stop the drug trade, can do so, one way or another. It is apparent that any drug operation large enough to be a major player in the international drug trade, has been identified by their governments, if for no other reason, but to collect income taxes.

    In most cases, the drug trafficking is ignored, as the governments really don't want to stop it. I think that is especially true of Mexico, and Columbia.

    It has occurred to me, that such a position of ignoring the drug trade, and making no effort to stop it, should be a sufficient reason for the US to step in, with military force, to eliminate it.

    June 10, 2009 at 12:41 pm |
  72. Frank Grimes

    Brilliant. Sometimes I wish I was in a drug cartel making all this money. But for now, I'm just a SQL slave.

    June 10, 2009 at 12:41 pm |
  73. Set it Free

    Just legalize. Done.

    June 10, 2009 at 12:41 pm |
  74. Sense

    You want to know how to cut off the cartels cash? Decriminalize (not legalize) marijuana and regulate and offer rehabilitation to users of harder stuff like coke or club drugs . People are gonna get high if they want to and no amount of enforcement or punishment will change that. Spend more money on the trafficking of Meth and opiates. You know the drugs that really ruin lives. Of course that will never happen because crime and law enforcement are two HUGE industries that go hand in hand. The war on drugs isnt meant to be won. The same as the war on crime or the war on terror or even the war on poverty. If you completely stop the flow of drugs then you put Judges who try the cases, Probation officers who supervise the offenders, Correction officers who guard the prisoners and rehab/drug testing facilities who deal with the addicts out of business. The truth is that drug dealers put a lot of money in the economy and if you were to take all that out it would have a very harmful effect.

    June 10, 2009 at 12:40 pm |
  75. Keitheith

    Ok. Let’s keep playing catch-up. Let’s do it forever. When drug runners find yet another loop hole, which they will, we’ll have to sit around to find another solution. Geeze! THE ANTI-DRUG LAWS MAKE DRUG DEALING SO PROFITABLE!! PROHIBITION MAKES DRUGS WORTH MONEY. These guys are killing each other over drugs, they are killing each other over the money that the drugs enable to make.

    June 10, 2009 at 12:40 pm |
  76. Andy

    It's only the illegality of drugs that makes them profitable. And more attractive to the thrill seeking user. No profits, no cartels, no back street suppliers.

    I don't care if bored idiots want to stupefy or kill themselves. Only the forced application of drugs to another or a minor should be illegal. But then hugely punished.

    June 10, 2009 at 12:39 pm |
  77. washingtonian

    These drug lords are so creative and smart with their submersibles, gift cards, etc. They really need to come to DC and be put on payroll. I am sure they could figure out ways to fix the economy and win the war on terror.

    June 10, 2009 at 12:36 pm |
  78. Twila Escalante

    Your reference to the Cayman Islands as a "largely unregulated" country is incorrect and misleading. The Cayman Islands is heavily regulated and has been operating under strict regulations since the 1980's. It is easier to open a bank account in the United States than it is in the Cayman Islands. Our primary laws among many include, The Proceeds of Crime Law (revised in 2007),, The Tax Information Authority Law, The Reporting of Savings Income Information Law. In addition, we have various supervisory bodies including the Cayman Islands Monetary Authority, The Financial Reporting Authority and the Tax Reporting Authority which are statutory bound to regulate illegal flows and means of funds.

    June 10, 2009 at 12:36 pm |
  79. Jason

    Sorry, but if this is Arizona's biggest problem, they are in good shape. Use your giftcard, you dirtbag, just put money in the u.s economy. How many times have we discussed the "war on drugs". It's a lost cause.

    June 10, 2009 at 12:36 pm |
  80. musicjunkie

    The government could just legalize drugs. And I'm not some junkie looking to get around a fine or jail time. Obviously outlawing drugs is not slowing the use of them at all. Legal or not, people will continue to use them. Take a look at other countries where drugs are legal and compare their crime rates to the states' crime rates, there's a significant gap. If drugs are legal they could be regulated just like alcohol and tobacco. Despite difficult economic times, people don't go without their cigarettes or alcohol, even with higher taxes.

    June 10, 2009 at 12:36 pm |
  81. ric chan

    The ONLY problem is the drug habits of Americans ! You guys stop using drugs. If an American is caught with illegal drugs they should also be charged with an accessory to murder – all the murders taking place in Mexico. And all their property should be seized and sold with the funds going to the Mexican gov't to fight drug crime. That should be a detterent. That will also end any drug war in Mexico or elsewhere on the American continent...

    June 10, 2009 at 12:35 pm |
  82. Duke

    It seems that if these funds are being put on electronic cards then it is a perfectly opportunity to track the money. Why not work on that more than trying to stop it. Not only do you know where the money originates, you know where it went as well as how much. At least use the tools we already have to discourage this procedure to transport money.

    June 10, 2009 at 12:35 pm |
  83. R.Lord

    The 'war on drugs' is a joke, like stomping ants and thinking the insects will go extinct because of your effort. Legalize and tax, and the profits the cartels have been enjoying will be available for good works in this country. Or just keep stomping at the ants.

    June 10, 2009 at 12:35 pm |
  84. PJ

    It's great seeing idiots in action- that's the attraction of the Three Stooges. Conservatives LOVE to blather on about Free Market principles and capitalism and economics (what little they know of it), UNLESS you start talking about the drug trade. Oh, oh, oh!!! Well, they backpedal, those principles don't apply. The HELL they don't! Does anyone gun down civilians for soap or microwave ovens or ice cream treats? The antediluvian drug laws of the US create artificial scarcity- there is an enormous permanent captive market, enforced scarcity, and a HUGE profit margin. The US- the biggest unregulated gun market in the World is also arming the gangs to the teeth. The problem ISN'T Mexico or corruption (you mean like AIG, Goldman Sachs, BOA and Citibank? THEY'RE even MORE corrupt than the Mexican Police and no one is doing anything...) or even drug trafficking- it's DRUG USE and DRUG LAWS and GUN LAWS and the fat dumb white people in the Ignorant US of ESCAPE...

    June 10, 2009 at 12:34 pm |
  85. PhilLawrence

    Just another promotion for more tax dollars by a government agency. Scaring us citizens by citing "drug lords" and "cartels".

    If marijauana was legalized, then 60% (the feds numbers) of the problem goes away. But that would be too easy.

    Even if we spent the time and money to "defeat" cash cards, because of drug prohibition there will be incentive to get around it. We've been chasing our tail for 40 years.

    June 10, 2009 at 12:34 pm |
  86. Brian

    How about cracking down on drug addiction here in the U.S??!! We Americans are feeding into these Cartels. Without American Addicts..Cartels dont make money and in turn have no use for gift cards. Problem solved?

    June 10, 2009 at 12:32 pm |
  87. Kevin

    Just legalize it problem solved

    June 10, 2009 at 12:31 pm |
  88. realist

    Solution: Legalize all drugs.

    June 10, 2009 at 12:31 pm |
  89. NotoriousTyler

    I agree it is time to do something about these cards. I mean we have the technology to track these cards. Why not verify the amount of cash the cards are holding and keep tabs on where the cash is going.. track the cash and bam you'll nab the smugglers in the process. Other than that, I'd say that setting a limit on the cards is another option but seems pointless because then they'll just set up their money in multiple accounts and get several cards instead of just one, therefore making it harder to track and monitor the cash flow coming into and going out of the states.

    June 10, 2009 at 12:26 pm |
  90. C

    We have reached a crossroads in the completely failed war on drugs. We are honestly down to two options. We can declare a real war on the cartels and send more troops into dangerous areas to fight more people that are unorganized and unbeatable because the corruption runs so deep that it's penetrated our own government. Or we can completely legalize drugs taxing them to make money for our government and simultaneously pushing the cartels out of business. Neither of these options are attractive but I have yet to hear a better one from anyone.
    If we leave it the way it is the drug cartels will be the government in a lot of these country's shortly.

    June 10, 2009 at 12:25 pm |
  91. s

    Legalize drugs and you won't have this problem...

    June 10, 2009 at 12:24 pm |
  92. Tevil

    its too difficult to monitor a gift card....

    i mean they would have to have credit machines at border posts and people checking the mail for them.

    the only way to monitor it would be to have the banks alerting the government when a gift card with that much is used somewhere in the states reaching an off shore bank/account.

    even the cartels need to have the money transferred to a US bank to use it, right? but then next will just be credit cards these guys will use to launder money some how.

    seriously were in iraq and this stuff is happening right here in our border. we have our children being kid napped and wemon being abducted and sold (not just ours but even other coutries who get smuggled in under our noses, which is JST as bad) via the mexican border. we need to have some of our advanced troops go in and seriously maintain and train the mexican gaurd because most of them are worse than the cartels.

    its depressing how this infects our country when there REALLY ARE many good hard working mexicans who would love the chance to come here and do great things. No IM NOT MEXICAN!

    June 10, 2009 at 12:22 pm |
  93. MarkB.

    The article leaves out where the "cash" part of this is coming from...are the druglords depositing $$$$$ in some shady bank in the states or what? Somebody explain why this should be a concern...

    June 10, 2009 at 12:22 pm |
  94. Big John

    I do not need big brother looking into how much money I have on a gift card. Break the Cartel's backs by legalizing Marijuana. No profit for cartel's, crime goes down, Tax it .. Profit USA

    June 10, 2009 at 12:22 pm |
  95. Todd

    How about making a certain plant legal it, import it, export it, i am sure there is money to be made and tempers to be calmed by doing this...don't worry though, our US government will find a way to spend the money made off of that irresponsibly.

    June 10, 2009 at 12:21 pm |
  96. Jack Phoeninx,az

    If they are issued in the US, the Feds should lock the accounts for 30 days from issue and monitor all monies taken out, or take the money out for them......

    June 10, 2009 at 12:21 pm |
  97. RevRayGreen

    legalize marijuana

    June 10, 2009 at 12:21 pm |
  98. DKS

    Hmmm how about we take a page out of Portugal and legalize drugs? Look up thier statisics on what happen when they legalize drugs, purely amazing.

    It shouldn't be the governments job to say what drugs u can or can not have.

    June 10, 2009 at 12:20 pm |
  99. Bryan

    Sure, let's spend another billion dollars cracking down on these gift cards. By the time that's done, the next trick will come along and require another billion dollars to counteract.

    Or, we legalize, regulate and tax drugs.

    Take the billions we spend trying to enforce a failed prohibition (and locking up all of the non-violent drug offenders) and direct a small portion of that towards the treatment of addiction.

    If you've got kids, they can most likely get marijauna easier than beer, that's how successful prohibition has been... hardly worth the billions we spend.

    June 10, 2009 at 12:19 pm |
  100. OreciaHughes

    It time to start thinking outside the box when it comes to how, these drug cartels distribute and receive thier money and the drugs. Give me a break gift cards, then put limits on them and monitor if they are being abused. I am trying to come up with legal and innovative ways to make money, and these drug lords and using gift cards to get over the system. I am sick about hearing about how they are getting over the system and want to hear more about them being procecuted to the fullest.

    June 10, 2009 at 10:22 am |
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