A federal judge in Texas granted temporary relief to two small money service businesses operating along the U.S.-Mexico border from having to enforce a Trump administration policy intended to disrupt clandestine financial laundering operations by cartels.
In March, the U.S. Treasury Department issued a “Geographic Targeting Order” that lowered the required reporting threshold on cash transactions from $10,000 to just $200 in certain ZIP codes along the southern border in Texas and California. Two businesses – Valuta Corporation, Inc., and Payan’s Fuel Center, Inc. – sued in the Western District of Texas in June, claiming the policy was driving them out of business and spooking customers skeptical of having to submit Social Security numbers and other personal information for lower sums of cash.
U.S. District Judge Leon Schydlower – an appointee of former President Joe Biden – issued a brief order on Wednesday, marking the third time federal courts have rejected the policy.
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“There are simple measures that cartel members can take to render the Border GTO completely toothless,” Schydlower wrote. “Innocent businesses can be profoundly disadvantaged if they are located on the ‘wrong’ side of an El Paso street, and thus within a covered zip code, vis-a-vis their competitors across the street in an uncovered zip code.”
“One of the covered zip codes is 79935, and the Court notes that Yarbrough Drive in El Paso separates 79935 from 79925, an uncovered and nearly identical part of El Paso,” the order says. “Accordingly, a cartel member, or anyone for that matter, could simply cross Yarbrough Drive from a 79935 business to a 79925 business to avoid the Border GTO’s reporting requirements.”
The judge said, “Using their feet, cartel members can avoid 79935’s lower reporting threshold, but innocent businesses in 79935 would likely lose innocent customers understandably reticent to furnish personal information for small monetary transactions.”
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U.S. Judge Janis Sammartino, who was nominated to the Southern District of California bench by former President George W. Bush, issued a temporary restraining order in April that broadly granted relief to all businesses in San Diego and Imperial County. In the Western District of Texas, U.S. District Judge Fred Biery – an appointee of former President Bill Clinton – also issued a temporary restraining order in response to a lawsuit brought by 11 businesses, but he stressed that it could not be interpreted more broadly.
The owner of Valuta Corporation, Inc., Ashley Light, and the owner of Payan’s Fuel Center, Inc., Andres Payan Jr., testified as witnesses. They filed a new lawsuit in June after Biery’s narrow ruling.
Schydlower also kept Wednesday’s temporary restraining order narrow in scope, meaning other Texas businesses who did not join the earlier lawsuits would still have to enforce the Trump administration’s GTO – at least for now. The order expires on July 8 but may extend, Schydlower wrote.
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