FinCen 2005 Report .. Here
FinCen’s Caution about Kuwaiti Comparison
FinCen published a document that warns against buying Iraqi Dinar or making a comparison to the Kuwaiti Dinar which is shown below:
Suspicious Activity Involving the Iraqi Dinar Over the last year, the circumstances of the war in Iraq have created the phenomenon of businesses trading in new Iraqi dinars. Many of these businesses advertise or conduct business over the Internet, and suggest that the Iraqi dinar, much like the Kuwaiti dinar following Operation Desert Storm, will increase in value exponentially following United States military involvement in Iraq. Most investors purchase dinars from websites established particularly for selling dinars or from major auction websites.
FinCEN has been receiving inquiries regarding the legitimacy of websites offering Iraqi dinar sales. While it is not necessarily illegal to buy or sell Iraqi currency, there are a number of risks and compliance concerns for the financial community. For example, Iraqi officials state that it is illegal under Iraqi law to export dinars. Therefore, in addition to questions about the source of the currency, and the potential for investment or securities fraud, businesses offering to sell dinars may also pose the risk of being used to fund terrorism or as a vehicle for money laundering. FinCEN also has a particular interest in these businesses because they may be money services businesses required to comply with the Bank Secrecy Act.
Any United States entity that buys or sells currency, including Iraqi dinars, in amounts of more than $1,000 U.S. to any one person in one day may be a money services business under FinCEN’s regulations at 31 C.F.R. Section 103.11(uu). [Note: there have been questions about the old dinar with Hussein’s picture on it. That dinar ceased to be legal tender around January 15, 2004 and thus ceased to be currency for purposes of the Bank Secrecy Act.]
Money services businesses include:
■Money transmitters;
■Currency Dealers or Exchangers (except those who do not exchange more than $1,000 in currency or monetary or other instruments for any person on any day in one or more transactions);
■Check cashers (except those who do not cash checks in an amount greater than $1,000 in currency or monetary or other instruments for any person on any day in one or more transactions);
■Issuers, sellers, or redeemers of traveler’s checks, money orders, or stored value (except those who do not issue, sell or redeem such instruments in an amount greater than $1,000 in currency or monetary or other instruments for or from any person on any day in one or more transactions);
Money services businesses generally are required to register with FinCEN, to establish anti-money laundering programs, and to comply with recordkeeping and reporting requirements under the Bank Secrecy Act.
Dinar sales websites frequently claim that their businesses are registered with the Department of the Treasury. These assertions are not always accurate. Further, it may be difficult to discern from the money services business registration list on FinCEN’s website (msb.gov) whether the business is in fact registered, particularly if the business is an affiliate of, or a “doing business as” alias for, the business that is registered. Moreover, even if the business is registered with FinCEN, that registration does not guarantee that the business is in compliance with other Bank Secrecy Act requirements or with applicable state law. For these reasons, a financial institution that conducts business with entities selling Iraqi dinars should conduct appropriate due diligence to assure itself of the legitimacy of such
entities.
All financial institutions that do business with, and potential customers of, such money services businesses, are reminded that registration with FinCEN in no way authenticates either the legitimacy of a business, or the compliance of the business with any federal, state, or local laws.
Expense of Selling Iraqi Dinar
Getting Iraqi Dinar into the United States requires filling out the right paperwork, such as filing a Currency or Monetary Instruments Transaction Report (CMIR) as required by federal law when transporting currency in amounts of more than $10,000 into or out of the United States.
Failing to fill out the proper paperwork and/ or not including the Iraqi Dinar in the international air waybill carries a maximum penalty for each charge (bulk cash smuggling and false statements to a government agency) is a $250,000 fine, five years in prison and three years probation. Filling out the proper forms and making sure everything is legal can be time consuming and this is reflected in the price dealers charge.
Scams, Alerts and Accurate Information about the Dinar
It would not be fair if we didn’t point out that Major US Banks have been selling the Iraqi Dinar and that the Washington State Department of Financial Institutions alert fails to recognize this fact or that US banks have been buying them back (at a large profit!).
Dealers can, and do, set their own price, the trick is finding the right price. You have to eliminate the dealers that have multiple sites all referring to one another and look at unique dealers in order to compare prices. When looking at dealers on this site, focus on owners that have one site (a rating of 10).
Always use caution when making such high risk investments. Always seek the advice of a professional financial consultant and watch out for dealers who pump up the dinar by operating multiple websites or posing as commenters promising easy riches!
DOCUMENTED DINAR SCAMS
Sample of the Jack Lee Smiley Scam below:
Defendant Jack Lee Smiley (Smiley), formerly known as Jack Cowart, has been a resident of Coeur d’Alene, Kootenai County, Idaho and has conducted business in Idaho during all times relevant herein. He has conducted business under various names, including Joint Venture Online Investments, SMG, Pristine Construction, Pristine Construction LLC, and Investments Unlimited LLC.
Beginning approximately January 1,2005 and continuing through 2007, Smiley solicited investors to participate in joint venture agreements for the purchase and subsequent sale of Iraqi Dinars, speculating that the Dinars will increase in value.
Smiley accepted funds from investors, purchased Dinars and holds them awaiting some unspecified date when they are supposed to increase in value, at which time they will be sold. He did not deliver the Dinars to the investors.
Smiley calls this enterprise “The Iraqi Investment” and “The Iraqi Currency Investment,” hereafter referred to as the “Enterprise.” Despite Smiley’s representations, there is no viable market for Iraqi Dinars outside of Iraq.
