Esperanza Gomez and Arnoldo Gonzalez, Jr. run small businesses near the U.S.-Mexico border that provide everyday, small-dollar financial services—often for customers without bank accounts. In San Diego, Esperanza helps customers cash checks (often to buy groceries at the store across the way), wire funds (often to family members), and get money orders (used for things like paying the rent). In Laredo, Arnoldo helps customers exchange dollars for pesos, and vice versa, so they can make purchases at nearby retail stores or in Mexico.
Now, a federal law enforcement agency called the Financial Crimes Enforcement Network (FinCEN) is enlisting Esperanza and Arnoldo as surveillance agents of the government—and burying them in paperwork in the process. Typically, businesses are required to report cash transactions over $10,000 to the federal government. But FinCEN is now ordering their businesses—and other similar non-bank financial services businesses located in 30 zip codes along the U.S.-Mexico border—to file reports on all transactions over $200.
While $10,000 is a large amount to Esperanza and Arnoldo’s customers—Esperanza’s business, for instance, has never had a transaction that large—lowering the threshold to $200 will mean that almost every transaction triggers a report. The reports require detailed information including birthdates, Social Security numbers, and home addresses.
The government says the purpose of these reports is to monitor these businesses: “we want a complete picture of what they’re up to and who uses them.” But the government does not have any reason to suspect that Esperanza, Arnoldo, or any of their customers has done anything wrong. That kind of generalized surveillance is just like the British “general warrants” that prompted the Founding Fathers to adopt the Fourth Amendment in the first place.
This surveillance mandate also threatens to put Esperanza and Arnoldo out of business. At over 20 minutes to file a single report, Esperanza and Arnoldo face hours of extra paperwork every day. Meanwhile, even assuming that criminals are laundering money in $200 increments, the criminals can easily take their cash to another zip code. Esperanza and Arnoldo cannot move their businesses.
Case Team
Attorneys
Rob Johnson
Senior Attorney
Betsy Sanz
Attorney
Jeff Rowes
Senior Attorney
Katrin Marquez
Attorney and Elfie Gallun Fellow in Freedom and the Constitution
Staff
Andrew Wimer
Director of Media Relations
Kendall Morton
Senior Paralegal & Assistant Director of Special Litigation Projects
Case Documents
Complaint – Esperanza Gomez
Media Resources
Get in touch with the media contact and take a look at the image resources for the case.
Andrew Wimer Director of Media Relations [email protected]
Esperanza Gomez
Esperanza worked for 15 years at an MSB before setting up her own small business in south San Diego, Novedades y Servicios. She and her family work at a small storefront helping customers cash checks, wire money worldwide, and get money orders. Many of her customers do not have bank accounts. They come to cash checks from their jobs; to wire money to their families; and to take out money orders for things like paying the rent.
Arnoldo Gonzalez, Jr.
Arnoldo has operated High Value in Laredo for 25 years. Operating from a convenience store, High Value helps customers exchange cash whether they are crossing into Mexico or shopping in the U.S. His location is conveniently located near where the interstate meets the border checkpoint. The only service High Value provides is currency exchange.
Cash Transaction Reports
The Bank Secrecy Act of 1970 requires financial institutions to report cash transactions over $10,000 to the federal government. The reports require customers to provide detailed information including birthdates, Social Security or EIN numbers, and home addresses.
The law also allows the Treasury Secretary to issue special Geographic Targeting Orders for a limited amount of time. In March 2025, FinCEN announced that MSBs in 30 zip codes near the border would be subject to the enhanced reporting requirement starting April 14 and lasting through September 9.
In California, the order covers zip codes in San Diego and Imperial Counties. In Texas, the order covers zip codes in Cameron, El Paso, Hidalgo, Maverick, and Webb Counties. Taken together, the targeted zip codes have a population of over a million people.
The Fourth Amendment’s Prohibition on General Warrants
In the run up to the Revolutionary War, British authorities issued “general warrants” that empowered officials to search any home or business suspected of smuggling. The warrants did not lay out specific places or persons to be searched. The Founding Fathers objected to these searches as a violation of rights that went back to Magna Carta.
The Fourth Amendment was included in the Bill of Rights in order to prevent law enforcement from intruding at will. Despite the broad language of the amendment, the Supreme Court in the 1970s upheld financial reporting requirements that force financial businesses to collect information from their customers and then report that information to the federal government. Those decisions, however, addressed requirements that applied only to over-$10,000 cash transactions. With inflation, the equivalent of $10,000 in 1970 is now approximately $85,000.
Lawsuits in California and Texas
IJ has sued on behalf of Esperanza in California and is representing Arnoldo in a suit in Texas originally filed by the Texas Money Services Business Association. In addition to raising a claim under the Fourth Amendment, IJ has also raised claims under the non-delegation doctrine, the major questions doctrine, and the Administrative Procedure Act.
The Institute for Justice
Founded in 1991, the Institute for Justice is a non-profit, public interest law firm that defends property rights. IJ’s Project on the Fourth Amendment seeks to protect the right to be secure from unreasonable searches and seizures. IJ successfully represented security deposit box holders who had their boxes searched and seized by the FBI, which only had a warrant to search the business, not its customers. IJ defends property owners from warrantless searches of private land, recently arguing at the Pennsylvania Supreme Court. Also, IJ is protecting Virginia residents from an intrusive network of cameras that read and catalogue license plates.
