DOJ alleges that the activities of Argentine “blue dollar peso exchangers” in the United States are illegal
According to U.S. authorities, the U.S.-based activities of “blue dollar peso exchangers” are illegal, and those exchangers that maintain U.S. bank accounts are subject to asset forfeiture and criminal prosecution. The recent U.S. forfeiture case brought by U.S. authorities in the U.S. District Court for the Southern District of New York against Partners Capital Investment (“PCI”) illustrates intense interest by U.S. authorities in the “blue dollar peso exchange,” and additional U.S. actions should be expected.
PCI was a British Virgin Islands entity. The U.S. Government alleged that PCI lied to the U.S. bank where it opened an account about the nature of its business. PCI falsely told the U.S. bank that it was a mutual fund. By itself, the false representation exposed PCI and its principals to U.S. criminal prosecution for bank fraud. PCI also used its U.S. bank account to move money at the direction of its Argentine clients as part of the “blue dollar peso exchange.” PCI’s U.S. business, i.e., transmitting money at the instruction of its clients, required U.S. registration and licensing as a money transmitter. Because PCI was not registered or licensed as a money transmitter, it was exposed to U.S. criminal prosecution, as well as forfeiture of their U.S.-located funds.
The U.S. court papers contained a chart of the criminal money flow:
According to U.S. authorities, PCI was a “blue dollar peso exchanger,” a system that enables users to evade strict capital controls set by the Argentine government. U.S. authorities were concerned that the “blue dollar peso exchange” facilitates the movement of funds between the United States and Argentina without the use of international wire transfers, making it difficult to track and to monitor for potentially suspicious activity.
For Argentine companies and individuals who take part in “blue dollar peso exchange” activities, the PCI case presents a stark risk of criminal prosecution and business interruption. Before conducting transactions for clients that involve the use of U.S. bank accounts, Argentines should consider and address the legal risks. Once U.S. authorities seize the money, it will be extremely hard to get it back.
Our law firm has successfully defended Argentine entities alleged to be involved in the “blue dollar peso exchange” and obtained the release of funds that were seized. Our team of Argentine lawyers, former U.S. prosecutors and anti-money laundering experts can advise Argentine clients about the risks of moving money in the United States and advise about how to structure their business to avoid violating U.S. law.
For further information please contact:
- Arthur D. Middlemiss at email@example.com or +1.212.826.7001
- Cristián Francos at firstname.lastname@example.org or +1.202.659.6878
The foregoing is for informational purposes only. It is not intended as legal advice and no attorney-client relationship is formed by the provision of this information.