Money Laundering Research Related to Stored Value Cards

Prepaid Cards: Vulnerable to Money Laundering?

This paper discusses the potential money laundering threat that prepaid cards face as they enter the mainstream of consumer payments. Over the past year, several government agencies have issued reports describing the threat to the U.S. financial system, including the use of prepaid cards by money launderers.

Stanley Sienkiewicz
Federal Reserve Bank of Philadelphia
February 2007
Discussion Paper - Payment Cards Center

Prepaid Stored Value Cards: A Potential Alternative to Traditional Money Laundering Methods

Prepaid stored value cards—a product experiencing explosive growth—provide an ideal money laundering instrument to anonymously move monies associated with all types of illicit activity, without fear of documentation, identification, law enforcement suspicion, or seizure. Therefore, it is very likely that drug traffickers and criminals alike are exploiting and will increasingly exploit the convenience and anonymity of prepaid stored value cards to launder and move funds associated with their illicit enterprises.

U.S. Department of Justice National Drug Intelligence Center
October 2006
Assessment