American Security Financial

State banking regulators closed a Los Angeles check-cashing business Friday after discovering that the firm was insolvent and could not honor an estimated 30,000 money orders issued mostly to low-income residents of South-Central Los Angeles. An estimated $2.3 million paid for money orders by customers of the company, American Security Financial, disappeared and so the orders cannot be honored, state authorities said.

State banking regulators closed a Los Angeles check-cashing business Friday after discovering that the firm was insolvent and could not honor an estimated 30,000 money orders issued mostly to low-income residents of South-Central Los Angeles. An estimated $2.3 million paid for money orders by customers of the company, American Security Financial, disappeared and so the orders cannot be honored, state authorities said.

Clark Security Products, a San Diego-based distributor of security hardware, said Wednesday it acquired Anaheim competitor American Security Distribution. Financial terms were not disclosed. American Security distributes security hardware, access control and closed circuit television systems. It has 25,000 accounts and recorded more than $100 million in annual sales at its peak, Clark Security said.

Eight check-cashing offices in South Central Los Angeles closed last week by the state were reopened Thursday with the promise that $2.7 million in outstanding money orders would be honored. The new owners, Continental Currency Services, bought the insolvent business from state banking authorities and agreed to honor an estimated 30,000 outstanding money orders issued by the previous operators.

In the world of billion-dollar financial collapses, the state seizure of an obscure Southern California money order company last December attracted scant public attention because it involved a mere $3.2-million shortage. But the demise of General Money Order Co. has left in debt an estimated 100,000 people, most of them poor Latino immigrants or African-Americans who had unwittingly used the worthless paper to pay everything from rent to immigration fees.