Paper Topic:

Money Laundering

1 . Retrieved from : http /www .highbeam .com /doc /1G1- .html

Money launderers using U .S . securities industry , Senate says (Knight Ridder Newss

From

Knight Ridder /Tribune News Service

Date

January 29 , 2002

Author

HYPERLINK "http /www .highbeam .com /Search .aspx ?q author 5bWhitefield 2c Mimi 5d \o "See more articles by Whitefield , Mimi " Whitefield , Mimi While regulators concentrated on preventing money laundering through U .S . banks , they left plenty of side doors open to drug dealers terrorists and corrupt politicians at brokerage firms , investment banks money exchange

houses and other money service companies

A new survey by Senate investigators presented Tuesday shows that while policing banks was the defense of choice against money laundering , much of the hen house was left unguarded

Preliminary data from a survey of just 22 large and small securities firms shows they have tens of thousands of offshore clients , channeling billions of potentially illegal dollars into U .S . accounts and posing significant money-laundering risks

With Sept . 11 came the growing realization that illicit money could find its way into the U .S . financial system _ and potentially into terrorist hands _ via routes that had nothing to do with banks . Last October Congress enacted the PATRIOT Act _ the toughest money-laundering legislation since 1986 "One of the biggest changes wrought by the new law has been to extend anti-money-laundering obligations to all U .S . financial institutions not just banks " said Sen . Carl Levin , D-Mich , during a hearing of the Committee on Banking , Housing and Urban Affairs on the financial war against terrorism and the new law

That means that brokerages , investment banks , mutual funds , investment advisors , and bond dealers will have to suspicious activity reports similar to those d by banks when they believe clients may be engaging in illegal activities . Under proposed regulations issued in December , insurance companies also will have to the reports

And hundreds of thousands of other money service businesses _ including money transmitters , check-cashing companies , jewelers , pawn brokers casinos , credit-card companies , and issuers of travelers checks and money s _ will be required to put anti-money-laundering programs into place unless exemptions are granted

Stricter anti-money-laundering requirements for banks took effect Christmas Day "This year , 2002 , is key to the effectiveness of the new law " said Levin , who chairs the Senate Governmental Affairs Committee 's Permanent Subcommittee on Investigations . So far , he said , the Treasury Department has made a good start on implementing the PATRIOT Act and meeting

But he warned against making exemptions and special rules for various players in the financial community or postponing compliance requirements . Final rules , for the securities industry , for example must be issued by June "We don 't have the luxury of time " said Levin "Osama bin Laden and Al Qaeda haven 't quit there is plenty of evidence they still may strike and if they do , they will again try to use our financial institutions against us . That 's why it is more important than ever that we seal the cracks in...

70 pages

267.0 KB

Free sing-up