Little-Known Surveillance Program Captures Money Transfers Between U.S. and More Than 20 Countries
Law-enforcement agencies across the U.S. have direct access to over 150 million transactions housed at an Arizona nonprofit
WASHINGTON—Hundreds of federal, state and local U.S. law-enforcement agencies have access without court oversight to a database of more than 150 million money transfers between people in the U.S. and in more than 20 countries, according to internal program documents and an investigation by Sen. Ron Wyden.
The database, housed at a little-known nonprofit called the Transaction Record Analysis Center, or TRAC, was set up by the Arizona state attorney general’s office in 2014 as part of a settlement reached with Western Union to combat cross-border trafficking of drugs and people from Mexico. It has since expanded to allow officials of more than 600 law-enforcement entities—from federal agencies such as the Federal Bureau of Investigation, the Drug Enforcement Administration, and Immigration and Customs Enforcement to small-town police departments in nearly every state—to monitor the flow of funds through money services between the U.S. and countries around the world.
TRAC’s data includes the full names of the sender and recipient as well as the transaction amount. Rich Lebel, TRAC’s director, said the program has directly resulted in hundreds of leads and busts involving drug cartels and other criminals seeking to launder money, and has revealed patterns of money flow that help law-enforcement agencies get a broader grasp on smuggling networks.
“It’s a law-enforcement investigative tool,” Mr. Lebel said. “We don’t broadcast it to the world, but we don’t run from or hide from it either.”
After this article was published, a spokesman for the Arizona attorney general said: “Courts have held that customers using money transmitter businesses do not have the same expectation of privacy as traditional banking customers.”
Mr. Wyden, an Oregon Democrat, said TRAC allows the government to “serve itself an all-you-can-eat buffet of Americans’ personal financial data while bypassing the normal protections for Americans’ privacy.”
Internal records, including TRAC meeting minutes and copies of 140 subpoenas from the Arizona attorney general, were obtained by the American Civil Liberties Union and reviewed by The Wall Street Journal. They show that any authorized law-enforcement agency can query the data without a warrant to examine the transactions of people inside the U.S. for evidence of money laundering and other crimes. One slideshow prepared by a TRAC investigator showed how the program’s data could be used to scan for categories such as “Middle Eastern/Arabic names” in bulk transaction records.
“Ordinary people’s private financial records are being siphoned indiscriminately into a massive database, with access given to virtually any cop who wants it,” Nathan Freed Wessler, deputy director of the ACLU’s Speech, Privacy, and Technology Project, said. “This program should never have been launched, and it must be shut down now.”
To obtain material such as bank records or emails, law enforcement typically needs to show that documents are relevant to an investigation and secure them through a subpoena or a warrant.
TRAC captures money transfers occurring through companies such as Western Union, MoneyGram, DolEx and Euronet through its Ria brand. These services are used by millions of people—especially those without bank accounts—to transfer funds between friends and family. They are an especially popular way for Mexican migrants to remit money earned in the U.S. to family members across the border.
Money-services companies are more loosely regulated than banks, often at the state level. Under federal regulations, banks must monitor transactions for suspicious activity, report those over $10,000 in cash and conduct due diligence on customers. Congress also requires federal agencies to get a subpoena for bank records and notify customers when their records are being seized.
Money-services companies have drawn scrutiny from law enforcement over the years because of concerns about terrorist financing, drug smuggling and other illicit activities. Customers using money-services companies such as Western Union and MoneyGram aren’t told that their transactions will be available to government entities.
Mr. Lebel said that because money-services companies don’t have the same know-your-customer rules as banks, bulk data needs to be captured to discern patterns of fraud and money laundering. He said TRAC put a $500 minimum threshold in place to avoid collecting the overwhelming majority of family remittances back to Mexico and other countries, which typically fall below that threshold.
Mr. Wyden determined last year that the federal government participated in TRAC, and specifically that Homeland Security Investigations, an arm of the U.S. Immigration and Customs Enforcement, used customs summonses, a type of subpoena, to collect about six million records of money transfers from Western Union and Maxitransfers since 2019. All those records ended up stored in the TRAC system, Mr. Wyden said.
“The scope of this surveillance program and federal agencies’ role is far greater than initially revealed,” Mr. Wyden said this week in a letter asking the Justice Department inspector general to investigate the FBI and DEA’s relationship with the program.
The Department of Homeland Security watchdog informed Mr. Wyden’s office last year that it was reviewing the activities of ICE’s investigative arm to combat drug trafficking in response to his questions about TRAC. ICE didn’t respond to a request for comment.