Consumers are warned that con artists are impersonating banks to trick consumers into transferring them cash via person-to-person payment apps.
San Diego, California – A controversial federal order now in effect across parts of San Diego County is drawing sharp criticism from small business owners and civil liberties advocates, prompting a lawsuit over what plaintiffs say is unconstitutional government overreach.
The order, issued by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), mandates that money services businesses (MSBs) report any transaction over $200 — a dramatic reduction from the previous $10,000 threshold. The order applies to 30 ZIP codes in California and Texas, including seven in San Diego County, as part of an effort to combat money laundering and cartel activity along the U.S.-Mexico border.
In neighborhoods like Southcrest, where businesses frequently handle remittances and wire transfers, the impact has been immediate. “It’s pretty ridiculous because it’s $200,” said Fiona Ortega, who works at her mother Esperanza Gomez Escobar’s business, Novedades y Servicios Plus. “It’s not going to get any criminals.”
Ortega estimated that 98% of their customers transact over $200. Each Currency Transaction Report (CTR) takes between 15 to 25 minutes to complete, requiring sensitive customer information such as Social Security numbers — a demand that has already driven some customers away. “It’s been slowing us down because people don’t want to provide all their information,” she said.
Escobar is now suing the federal government, challenging the legality of the order. Her attorney, Katrin Marquez, argues that the order constitutes an unconstitutional search and seizure under the Fourth Amendment. “FinCEN is essentially just using a dragnet search to see what is going on without any individualized suspicion,” Marquez said.
The lawsuit seeks a temporary restraining order to halt enforcement while the case moves through the courts, with the ultimate goal of having the rule struck down.
While the Treasury Department declined to comment on ongoing litigation, a spokesperson defended the order, citing the southwest border as a “point of vulnerability” exploited by “drug cartels and professional money launderers.”
The order is currently set to expire in 180 days, but Marquez warned it could be extended. Ortega expressed broader concerns about the precedent being set: “They’re just putting it in at the borders right now. But this could be something that affects everyone someday. If we don’t stop this, it could be you next.”
