A money services business (MSB) is a type of non‑bank financial institution that deals with cash and payment services. Under U.S. rules, an MSB is any person or company that does business in one or more of these roles: • Currency dealer or exchanger (buying/selling cash in different currencies) • Check casher • Issuer or seller/redeemer of traveler’s checks, money orders, or prepaid/stored‑value cards • Money transmitter (sending or receiving money, including many remittance and wire services) • The U.S. Postal Service when it provides these services
In practice this includes many check‑cashing stores, remittance businesses (like some wire transfer or bill‑pay shops), foreign‑currency exchange kiosks, and some crypto or prepaid card businesses. They must register with FinCEN and follow anti‑money‑laundering rules.
FinCEN (the Financial Crimes Enforcement Network) is a bureau of the U.S. Department of the Treasury. It is the U.S. financial intelligence unit and a regulator for anti‑money‑laundering (AML) laws.
Authority: • By statute (31 U.S.C. §310) FinCEN is established within Treasury to collect and analyze financial transaction data, support law enforcement, and carry out delegated regulatory duties. • Treasury Order 180‑01 delegates to FinCEN the responsibility to implement, administer, and enforce compliance with the Bank Secrecy Act (BSA) — the main U.S. AML law.
Because of this, FinCEN can write BSA regulations, require reports (like CTRs and SARs), examine or coordinate examinations of financial institutions, bring civil enforcement actions (fines, orders, etc.), and refer potential crimes to the IRS Criminal Investigation division, DOJ, or other law‑enforcement partners.
• Currency Transaction Report (CTR): A CTR is a mandatory report that financial institutions must file with FinCEN when a customer’s cash transactions are more than $10,000 in a single business day (cash in or cash out, including multiple related transactions). Banks, credit unions, casinos, and MSBs file CTRs electronically on FinCEN Form 112.
• Suspicious Activity Report (SAR): A SAR is a confidential report that financial institutions must file with FinCEN when they know, suspect, or have reason to suspect that a transaction (or pattern of transactions) may involve money laundering, terrorist financing, fraud, or other illegal activity, even if the amount is below $10,000. MSBs must generally file a SAR (FinCEN Form 111) for suspicious activity involving $2,000 or more.
Who files them: Banks and credit unions, broker‑dealers, money services businesses, casinos, and many other regulated financial institutions file CTRs and SARs electronically through FinCEN’s BSA e‑Filing system.
These are early enforcement steps that usually lead to more detailed review and possibly penalties or other actions:
• FinCEN “notice of investigation”: This is a formal notice that FinCEN is investigating potential violations of the Bank Secrecy Act. After such a notice, FinCEN typically requests documents and data, interviews staff, and evaluates the institution’s anti‑money‑laundering program and reporting. Depending on what it finds, FinCEN can close the matter with no action, issue a warning letter, require corrective actions, impose civil money penalties, or refer the case for criminal investigation.
• IRS “examination referral”: Under delegations from FinCEN, the IRS is responsible for examining many MSBs for BSA compliance. A referral means FinCEN (or another agency) has sent a case to IRS examiners to conduct a BSA/AML examination of that business. The IRS will review policies, records, and prior filings; interview management; and then either find the business in compliance, require it to fix deficiencies, or, if violations are significant or willful, refer the case back to FinCEN for civil penalties and possibly to IRS Criminal Investigation or DOJ for prosecution.
Violations of the Bank Secrecy Act (BSA) can lead to both civil and criminal consequences, depending on how serious and willful they are.
Civil penalties (typically imposed by FinCEN): • Fines for recordkeeping/reporting failures (e.g., not filing CTRs or SARs, or having no effective AML program). Maximum amounts are set in 31 U.S.C. §5321 and adjusted for inflation in 31 C.F.R. §§1010.820–1010.821. • Penalties for structuring transactions to evade reporting (often up to the amount involved in the structured transactions). • Penalties for willful violations of BSA program, registration, and reporting duties (which can reach tens or hundreds of thousands of dollars per violation, depending on the provision and inflation‑adjusted caps).
Criminal penalties (under 31 U.S.C. §5322 and related statutes): • For willful BSA violations, fines up to $250,000 and/or up to 5 years in prison. • If the violation occurs while violating another U.S. law, or as part of a pattern of illegal activity over $100,000 in 12 months, fines up to $500,000 and/or up to 10 years in prison. • Additional consequences can include forfeiture of assets, and for individuals involved at a financial institution, repayment of certain bonuses tied to the period of the violation.
Civil and criminal penalties can be applied together in serious, willful cases.
The press release’s “Homeland Security Task Force” refers to Homeland Security–led, multi‑agency task forces that focus on border and financial crime, such as ICE Homeland Security Investigations’ El Dorado Task Force (EDTF) and Border Enforcement Security Task Forces (BEST).
• El Dorado Task Force (EDTF) is led by ICE/HSI and brings together federal, state, and local agencies to investigate cross‑border financial crimes and dismantle money‑laundering organizations. • Border Enforcement Security Task Forces (BEST) focus more broadly on transnational criminal organizations operating across U.S. borders.
How they work with FinCEN and IRS: • FinCEN supplies these task forces and the IRS with financial intelligence (CTRs, SARs, and other BSA data) and may share leads or patterns of suspected laundering. • IRS (including IRS Criminal Investigation) participates in such task forces, bringing tax and BSA expertise and conducting criminal investigations into money laundering and related offenses. • Together, they combine data analytics (FinCEN) with on‑the‑ground investigative powers (HSI, IRS‑CI, and other agencies) to build cases against cartels, human‑smuggling networks, and other cross‑border criminal groups.
For ordinary customers who use MSBs legitimately (for remittances, check cashing, money orders, etc.), this operation mainly plays out behind the scenes:
• More questions and ID checks: Border‑area MSBs may ask for more identification, ask extra questions about large or unusual transactions, or decline transactions that look suspicious, as they tighten their compliance programs. • More reporting by the MSB: Your large cash transactions and any activity the MSB finds suspicious may be reported to FinCEN via CTRs or SARs, but customers are generally not told when a SAR is filed. • Potential service changes: Some small MSBs might change hours, limit certain high‑risk services, raise fees, or in extreme cases close locations if the compliance burden or enforcement risk becomes too high.
For law‑abiding users, using valid ID and being prepared to explain large or unusual transactions should be enough; the main goal of the operation is to detect and disrupt cartel‑related and other illicit money flows rather than to target ordinary customers.