A Homestead business patronized primarily by immigrants issued up to $500,000 in money orders that bounced, state regulators say.

BY AMY DRISCOLL

HOMESTEAD

Taped on the glass front door of Moctezuma, a popular money-order store in downtown Homestead, a sign in Spanish offers a hint of the turmoil within:

``We inform our clients that to reclaim money from money orders, you are required to have the stub.''

Across the street, Flor Cervantes held her stub -- and the letter she got from the Department of Homeland Security, informing her that the $310 in immigration fees she had sent for her daughter, via money order from Moctezuma, had bounced. She now owes an additional $30 in late fees, the letter said.

''And I still don't have my money back,'' the nursery worker said. ``I don't know if I'll ever see it again.''

Throughout Homestead's immigrant community, Moctezuma customers tell the same story. Rent, electricity, cable, phones and remittances to their home countries haven't been paid, after money orders they bought from Moctezuma were returned, stamped ''account closed.'' Penalty fees for nonpayment have accrued, too -- $75 more on the rent bill, $30 more for cable, a reconnection fee for the water.

The problem became so big that state financial regulators stepped in. In mid-February, they issued an emergency ''cease and desist'' order, suspending Moctezuma's license for money orders. And they say the company, also known as Business and Friends Services Inc., has issued so many bad money orders they believe the total in claims may top $500,000.

PAYING FUNDS BACK

Moctezuma's owner, Charles Agero Jr., could not be reached for comment but his lawyer insists the company will pay the money back.

''We're working with the state and attempting to come up with a comprehensive restitution plan, and everyone who feels aggrieved will be fully compensated,'' said attorney Robert I. Targ. ``We're trying to make everybody happy. Many people have already been paid back.''

The state says the company had 90 days to come up with a viable plan to make good on the losses -- and the clock runs out May 12.

''Right now, they cannot operate, period,'' said Michael Ramsden, an administrator in the financial regulation office in Tallahassee. ``We're willing to listen if they have a plan for restitution.''

COSTLY LOSS

In a community where farmworkers make $45 or $50 a day picking tomatoes and many people live on the economic edge, the effect of even a few hundred dollars in an unexpected debt is potentially devastating.

''People have had their electricity cut off, their water,'' said Serafin Duran, 36, a forklift operator who has been in the United States for eight years and had more than $1,000 in money orders returned to him, unpaid. ``It's an injustice. This is a country where people have rights.''

Some customers contacted the Mexican consulate. Others went to the police. The Homestead Police department said it has received about 30 complaints about worthless money orders issued by Montezuma. The cases remain under investigation, a police spokesman said.

Now, as a South Miami lawyer collects names for a possible class-action lawsuit -- he has had contact with more than 60 victims so far -- regulators are still trying to determine the size of the problem and if those who lost money can recover it.

In Duran's living room last weekend, it was standing room only as word continued to spread about a possible lawsuit. Duran leaned over the table to help one woman fill out a form with her name and address, as more than a dozen others crowded into the room, children in tow.

Watching the scene, Euclides Berdugo, 54, from Colombia, said he wants to see simple justice done.

''We give money to Moctezuma and they give us a piece of paper worth nothing,'' said Berdugo.

He shook his head. ``Before, everyone goes to Moctezuma. But not anymore. Not now.''

No one knows how many customers were saddled with bad money orders through Moctezuma. The owner, Agero, told regulators during their investigation that he had sold money orders through at least 28 vendors in South Florida and one in Los Angeles, according to John Kneissel, area financial manager in Miami for the Office of Financial Regulation.

Since most money orders are issued for relatively small amounts the number of customers affected could be in the hundreds, estimated attorney John De Leon, who is pursuing a potential civil suit against the business.

''These are working people, with jobs and families, who may not be able to take a day off from work to pursue this,'' he said. ``A lot of people will probably end up just taking a loss.''

Though he is preparing a lawsuit, he said he still hopes the company will find a way to repay his clients.

''These are people who struggle, very conscientiously, to make their payments on time. To have their trust violated this way undermines their faith in the entire system,'' he said.

REACH UNKNOWN

Officials at the Office of Financial Regulation won't even hazard a guess at how many people will ultimately turn out to be affected.

''Assessing the true extent of it, those things take months sometimes,'' said Ramsden, of the financial regulation office in Tallahassee. ``We don't expect the total to go through the roof but it will likely edge up past $500,000, as money orders from overseas come back.''

The lawyer for Moctezuma's owner says the company has hired outside auditors to determine what went wrong and work out a method of repayment.

''The plan is to get everybody compensated in full, even those with late fees,'' Targ said. ``A lot of people have already been paid back, but I don't have a figure because the audit hasn't been completed.''

He said his client wants to repay his debts. ''I don't believe there was criminal or fraud intent,'' he said. ``I don't think he went into this to steal money from anybody.''