News

The Cornerstone Report

Safeguarding America Through Financial Investigations

Volume VI: No. 1 • January 2009

Doleiro—The Black Market Foreign Exchange in Brazil

The Brazilian doleiro market is the parallel, or black market for the exchange of Brazilian reais into other currencies, principally the U.S. dollar.

The market operates through a large underground network of enterprises in Brazil. These enterprises sometimes have no fixed place of business and operate only through cell phones. In many cases, they operate in the shadows and are presumed to have lax or no money laundering controls.

The doleiro provides the services of an illegal money remitting business, offering both sides of the monetary transaction. In Brazil, it provides money transfer services to citizens and companies who are looking to move reais out of Brazil. In the United States and other countries around the world, the doleiro offers remittance payment services to remittance companies seeking to have payments made in Brazil. Doleiros maintain scores of bank accounts in Brazil as well as abroad, including accounts in the U.S.

One example of ICE successfully shutting down a doleiro operation is Operation Living Large.

Red Flag Indicators

• Frequent transactions or purchase of negotiable instruments $10,000 or less in order to avoid filing a Currency Transaction Report (CTR).
• Customer making cash deposits $10,000 or less at multiple locations, or cash deposits made to one account at the same location by multiple individuals.
• Splitting large currency deposits among several accounts during a single transaction.
• Using multiple accounts to collect funds that are then transferred to the same foreign beneficiaries.
• Issuing sequentially numbered checks, money orders, or other financial instruments to the same person or business, or to a person or business with a similar name.