Money laundering occurs when criminals disguise proceeds from criminal activities as legitimate funds. Terrorists, drug traffickers and other criminals rely on money laundering to move funds, disguise dirty money and carry out criminal acts. Current estimates are that $500 billion to $1 trillion in illegal funds are laundered through banks worldwide each year, with about half going through U.S. financial institutions.
Senator Levin has worked hard to strengthen anti-money laundering laws and procedures to prevent terrorists and other criminals from using our financial systems against us. From 1999 until 2001, through his role on the Senate Permanent Subcommittee on Investigations, Senator Levin held a series of hearings on money laundering activities in the U.S. financial services sector, including in-depth examinations of money laundering activities in private banking, correspondent banking, and the securities industry. This investigative work provided the foundation of many of the anti-money laundering provisions in Title III of the Patriot Act.
In February 2003, the Subcommittee initiated a followup investigation to evaluate the enforcement and effectiveness of key anti-money laundering provisions of the Patriot Act, using Riggs Bank, a prominent bank that held the accounts of most of the foreign embassies in Washington, as a case study. A report released by Senator Levin’s Subcommittee staff in July 2004, revealed that Riggs Bank maintained a dysfunctional anti-money laundering program and allowed or, at times, actively facilitated suspicious financial activity, using case histories involving Augusto Pinochet, the former President of Chile, and Teodoro Obiang, the President of Equatorial Guinea. The report detailed serious shortcomings in federal oversight of Riggs Bank, a regulatory failure particularly troubling in light of the potential for criminals and corrupt officials to misuse the U.S. financial system. The report also made a series of recommendations to correct the regulatory and legislative deficiencies it identified.
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