The announcement Wednesday, April 10th 2013, that one Licensed Money Transmitter, Braz Transfer, was shot down by the Massachusetts Division of Banking (http://1.usa.gov/ZezCTc
) and two other were issued orders of Cease and Desist has been seen by many as a long-time-coming victory in the battle against the Brazillian Parallel Market. The two Cease & Desist Orders were received by Global Money Remittance ( http://1.usa.gov/10UPzhf )
and Intertransfers ( http://1.usa.gov/ZlOiNf ), these two Miami based.
A day after, the Florida Office of Financial Regulation issued a cease and desist order against InterTransfers and Global Money Remittance (http://bit.ly/ZmgG1K)
It is interesting to note that the news mention "that the company “falsified payment receipts to transfer funds from Massachusetts consumers to parties in Brazil,” (Boston.com: http://bo.st/YpJ8nJ -
In the past, US government officials were warned by Brazilian authorities that some companies were showing to auditors and reviewers bank deposits in beneficiary's bank accounts in Brazil as proof of legal payment of funds in that country. But when contacted,
the Brazilian banks denied that these international payments were done. The truth is that parallel market operators make cash deposits (or transfers from other accounts) into beneficiary's accounts and show the bank receipt as proof of "legal payment".
In a conference last year,
IMTC Brasil 2012, MTOs were warned that this practice was being investigated by US authorities and that they had to make sure that third-party brazilian payment providers in Europe were not working with parallel market operators. A letter sent July 10,
2012 by the Massachusetts Division of Banking to all the MTOs licensed in the state (http://1.usa.gov/QsJK7x) made it very clear, citing two white papers on the matter (http://bit.ly/Op5rkd -
It is probable that other states in the US, such as Florida and New Jersey follow suit. It is difficult to predict if European authorities finally act on the Brazlian Parallel Market problem that is widespread in the UK, Spain, Switzerland and other countries
in the European Union.