Federal agents have raided 17 money-transmitting businesses in the Washington area that allegedly sent millions of dollars abroad without obtaining licenses, part of a nationwide crackdown aimed at curbing the ability of terrorists to move cash.

Authorities have seized $3.6 million in the local raids, which began after the USA Patriot Act took effect in October 2001, tightening regulations on money senders. Although authorities have released few details of the operations, they suspect that three of the firms have sent funds to countries accused by U.S. authorities of supporting terrorism. No terrorism-related charges have been filed.

"When you have an underground banking system, it tends to make us very vulnerable to terrorist activity" as well as other crime, said Kevin Delli-Colli, assistant special agent in charge of the local Bureau of Immigration and Customs Enforcement office, which has headed the effort.

But some immigrants and crime specialists say the crackdown has targeted many mom-and-pop businesses that have nothing to do with financing terrorism. These informal money-senders are running afoul of the Patriot Act simply because they lack the resources to meet all of its licensing requirements, critics say.

"We're alienating communities that we should be bringing together in our corner for coalitions against terrorism," said Nikos Passas, a professor at Northeastern University who has studied terror finance.

The most recent raid occurred at the Eritrean Cultural and Civic Center at Sixth and L streets NW. On April 13, federal agents and D.C. police swept into a second-floor office at the center and seized documents and computers. The office, which was rented from the club, had allegedly been sending hundreds of thousands of dollars overseas.

Immigrants who gather at the club to swap gossip and watch Eritrean television programs were shocked at the raid on the office, which many use to send cash to needy families back home.

"To include us like a terrorist group is unacceptable. Of course we're offended," said Estefanos Mesmea, 55, a cabdriver from Alexandria who was sipping espresso at the club on a recent day. The case is under investigation, and officials declined to provide details.

Informal money-transmitters have flourished in the United States, thanks to growing immigration and improved technology. For many immigrants, such services offer a quick, cheap way to send money to regions with inefficient banks -- or none at all.

The businesses sometimes function through clan or family ties and use unorthodox methods to move cash to hard-to-reach areas. For example, some are hawalas, an Arabic word for transfer, in which money is not immediately wired to the final destination. Instead, a U.S.-based hawala operator tells his counterpart in another country to give cash to the recipient and leaves an IOU. The two hawala operators settle up later, sometimes through offsetting transactions or trade-finance arrangements.

Eritreans in the Washington area say they started using informal cash-sending channels decades ago, when their homeland was controlled by a Marxist Ethiopian government. Eventually, a money-transmitting office was set up at the cultural center. It has been run for the last few years by the Eritrean Embassy, according to several immigrants. The embassy did not respond to several messages seeking comment.

"It was a well-intentioned community service, done by volunteers initially," said Haile Mezghebe, a prominent local Eritrean who is a surgeon at Howard University Hospital.

But after the Sept. 11, 2001, attacks, authorities grew increasingly concerned about such services and their hard-to-trace transactions. Under the Patriot Act, money transmitters must register with the Treasury Department and obtain state money-transfer licenses. The law also requires them to report suspicious transactions and run programs to prevent money laundering.

Even as the new regulations were being rolled out, agents pounced on a money transmitter that appeared to illustrate their worst fears. On Nov. 7, 2001, FBI and Customs agents raided offices of Al Barakaat in six U.S. cities, including Falls Church and Alexandria. U.S. officials say Al Barakaat, an important institution for local Somalian cabdrivers and hotel workers, also was used by al Qaeda to move money around the globe.

"The entry point to these networks may be a small storefront operation, but follow the network to its center and you discover wealthy banks and sophisticated technology, all at the service of mass murderers," President Bush said of the raids at the time. Al Barakaat officials have denied ties to terrorism.

Well before the Al Barakaat raids, U.S. agents had been targeting businesses that handled money for drug traffickers or other criminals, but the Patriot Act gave them more tools. Since it passed, authorities have arrested more than 80 people nationwide in connection with the illegal transfer of millions of dollars to countries including Pakistan, Iraq and Yemen, immigration and customs officials said.

Locally, the crackdown has been carried out by an Annandale-based team that includes officials from Immigration and Customs Enforcement, the Secret Service, the Internal Revenue Service, the U.S. attorney's office and local police.

They discovered a thriving underground banking system in the Washington area. It ranged from an Afghan grocery store in Alexandria, where immigrants dropped off cash for a local hawala operator, to the Towfiiq Group, which sent millions of dollars to the Middle East from an office on Leesburg Pike, according to ICE officials. Law enforcement agents shut down that company in November and seized $523,386 from its Virginia-based bank accounts. Local immigrants said the service was used by many from Somalia, whose money often passes through Middle East banking hubs. No charges have been filed.

Agents have also targeted unlicensed money-transmitters who send funds to Pakistan, Guatemala and Peru.

Authorities have not publicized many details of the local raids, since some of the targets have cooperated and others are under investigation. But officials say they are scrutinizing some of the firms for possible terrorist links.

Allen J. Doody, who heads the local ICE office, said three of the area money-senders are suspected of transferring money to Sudan. That is prohibited under U.S. sanctions that cite Sudan's alleged support for terrorism. Local immigrants acknowledge that some residents have sent money to relatives in Sudan despite the ban.

Two of those firms also may have sent funds to Libya, a practice that until recently was also illegal, Doody said.

Law enforcement officials say the fact that the businesses do not register with the government is suspicious. They have turned up cases across the country in which drug traffickers, smugglers of illegal immigrants and others have used informal money-transmitters.

But immigrants and some financial experts say some of the businesses caught in the crackdown are small operations that do not know the regulations or cannot afford the expense involved, particularly in getting a state license. Although many states have required money-transmitting licenses for years, enforcement was not strict until recently, immigrants say.

Osman Yusuf, 49, a Somalian refugee, said he was eager to comply with the new anti-terrorism regulations. The entrepreneur held a business license for Dahabshil Inc., a three-room business in a wooded office park in Alexandria, which sent money to his war-torn homeland. But only after the Al Barakaat shutdown did he learn that he needed a separate license from Virginia, he said.

Yusuf said it took six months to obtain the license, in part because he made some mistakes on the forms and needed a lawyer to fix them. He was required to close his doors until he got the permit.

"It costs a lot. A lot of documentation is involved," he said, adding that he also had to post a half-million-dollar bond.

Passas, the Northeastern professor, said the regulations could ultimately be counterproductive, driving the informal bankers further underground.

The problem, he said, is that states are applying consumer protection regulations to ethnic businesses that do not need them. The hawalas have had a stellar record in delivering customers' cash, he said.

"Trust has been a motor of efficiency in this informal business. It has regulated itself," Passas said.

Regulators aren't convinced.

"As a consumer, I would certainly like some protection before I give my money to someone to send halfway around the world," said Joe Face, Virginia's commissioner of financial institutions.

To get a Virginia money-sending license -- which can cost a company hundreds if not thousands of dollars a year -- each senior officer in a business must file a biographical and personal financial history. Face said the licenses are typically issued in 45 to 60 days. The money transmitters must also post a surety bond or other financial guarantee.

Doody said the crackdown is not aimed at immigrant workers but at ensuring that the financial system cannot be exploited by terrorists. "We're not concerned with someone trying to get $100 home to Mom," he said.

For the immigrants who gather at the Eritrean cultural center, that is precisely the issue.

"We're stuck," said Mesmea, the cabdriver, who said many immigrants are now giving wads of cash to friends to carry to Eritrea on their trips home. "In the end, we'll be worried how to send the money."