Money-transfer firm will open books to feds in deal to end Detroit case involving food stamps
By Ed White, APThursday, January 21, 2010
US drops charges in money-transfer investigation
DETROIT — A company accused of illegally transferring money overseas from food-stamp fraud in Michigan will pay $25,000 and open its books as federal investigators try to determine where cash landed and who received it.
At the government’s request, a judge dismissed all criminal charges Thursday against North American Money Transfer, based in Stone Mountain, Ga.
The company was indicted last year after the government found food-stamp recipients had used an Ypsilanti store to take cash off their electronic debit-style cards and send it to Somalia, Europe and the Middle East.
The store moved at least $265,000 to a credit union account in Seattle maintained by North American Money, the indictment says. The company has denied wrongdoing and said it had no knowledge that money sent overseas was linked to fraud from the federal food program.
North American Money will provide names of people who sent “hawala” cash from Michigan and other states where the company is not licensed to operate, Assistant U.S. Attorney Cynthia Oberg said in a court filing.
Hawala, which means “trust” in Arabic, refers to a money-transfer system common in Islamic societies.
The company will provide names of recipients of money and give the U.S. Treasury Department “unfettered access to its books” over an 18-month period, Oberg said.
It’s a good deal for North American Money, whose ability to operate could have been threatened by the conspiracy charge and other alleged offenses. It will pay $25,000.
A message seeking comment was left with Oberg, who is part of the national-security unit of the U.S. attorney’s office.
North American Money’s lawyer, Sam Rosenthal, said the company will cooperate. He called the agreement an “appropriate resolution” but declined further comment.
North American Money’s Web site says it serves mostly low-income immigrants and refugees who send money to their native countries. It has locations in eight states. The government says it wired at least $12.8 million from the U.S., from January 2008 to mid-April 2009.
The money-transfer charges were just part of the indictment. Four people who worked at Abbas Phone Card and Grocery have pleaded guilty in a scheme to get $718,743 in payments from the food-stamp program.
