A federal judge has granted an injunction on behalf of two El Paso money service providers in a lawsuit against the U.S. Treasury Department’s financial crimes unit.
U.S. District Judge Leon Schydlower issued the order on Tuesday, July 22, that bars the federal government from “enforcing, implementing and putting into effect” the April Geographic Targeting Order issued by the U.S. Treasury Department’s Financial Crimes Enforcement Network until further notice. The ruling benefits the two El Paso money services businesses, the Valuta Corporation and Payan Fuel Center, which brought the lawsuit against the Treasury Department.
“We whole heartedly agree with it,” Andres Payan Jr., one of the plaintiffs in the case, said. “We are winning so far in court and I hope this can be extended to others, other businesses in El Paso and the rest of Texas.”
The decision was also welcomed by the lawyers from the Washington D.C. based Institute for Justice, who are representing the money service providers.
“We’re, of course, happy about it,” Andrew Ward, the lead attorney in the case, said. “This is three for three now. Three federal judges have issued preliminary injunctions because this GTO is obviously unlawful. We are hoping to get the final judgment quickly and this vacated across the country.”
The money service businesses are awaiting a final decision in the case.
Schydlower previously issued a temporary restraining order on behalf of both money service businesses on June 24. He extended the temporary restraining order on July 2 ahead of his decision on Tuesday.
‘Fighting’ money laundering
The Treasury Department’s Geographic Targeting Order was issued in April and affected 30 zip codes along the border in five counties in Texas and two counties in California. The order was aimed at fighting drug cartels and money laundering in the U.S., according to the Treasury Department.
The order required money service companies that provide services like check cashing, currency exchange, money transfers, and money orders to collect client personal information — including Social Security or green card numbers and a home address — of anyone who carries out a transaction of over $200, and turn it over to the U.S. Treasury Department’s Financial Crimes Enforcement Network. The previous limit was $10,000.
But the order swept up the personal information of innocent clients and resulted in a mountain of paperwork, business owners said.
Customers rely on money service companies to cash checks, purchase money orders and send money to loved one outside of the U.S. But the lawsuits argued that order places working-class clients under financial surveillance and creates a burden of paperwork and a loss of clients for money service providers, the plaintiffs’ attorneys argued.
Legal challenges to order
The Geographic Targeting Order faced multiple challenges in court from the Institute for Justice since it went into effect in April.
The first challenge against the order was filed in southern California. The judge there blocked the order in April for all affected businesses in Imperial and San Diego counties, providing relief for money service providers.
The next was heard in U.S. federal court in San Antonio, Texas. Judge Fred Biery ordered the U.S. Department of the Treasury to stop enforcing the rule for 10 businesses in Texas and one individual, saying the rule likely violates the Fourth Amendment’s prohibition of unreasonable searches.
The third lawsuit was filed in El Paso on May 30.
The federal government has appealed both the decisions in the Nineth and Fifth Circuit Courts of Appeals.
The U.S. government has sought to stay the cases pending appeals in both San Diego and in San Antonio. Briery granted a stay in the San Antonio case, mentioning the pending ruling in the case in El Paso.
“Everybody agrees this is illegal,” Ward said. “Now we’re just waiting for the final ruling.”
Jeff Abbott covers the border for the El Paso Times and can be reached at:jdabbott@gannett.com; @palabrasdeabajo on Twitter or @palabrasdeabajo.bsky.social on Bluesky.
This article originally appeared on El Paso Times: El Paso federal judge strengthens ruling against US government financial surveillance order
Reporting by Jeff Abbott, El Paso Times / El Paso Times
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