The Bank of America recently settled a money laundering suit brought
by Manhattan District Attorney, Robert M. Morgenthau for $7.5 million,
$6 million in penalties and $1.5 million in costs, ending an almost
three year investigation conducted in coordination with foreign
authorities. [1]
District
Attorney Morgenthau said that a series of transfers, totaling more than
$3 billion, prompted the investigation because they possessed some of
the ear-marks of terrorist financing, much of which comes from South
America. [2] The transfers originated in offshore shell companies owned
by illegal Brazilian money services and were routed through the Bank of
America account of a Uruguayan money remitter. [3] Although officials
do not know the identity of many of the recipients, District Attorney
Morgenthau believes that some of the transferred funds went to Mideast
terrorist organizations. [4]
Under the terms of the settlement, Bank of America admitted that it
failed to adequately asses the risk of some of its customers, agreed to
cooperate with ongoing investigations, and to improve its anti-money
laundering program. [5] Even so, Bank of America admitted no wrong,
stating that it takes money-laundering seriously and that it never has
knowingly done business with parties engaged in illegal activities. [6]
The Bank of America investigation was part of an on-going anti-money
laundering program that has traced almost $19 billion in illegally
transferred funds, and recovered $19.5 million for the city and state.
[7] District Attorney Morgenthau also announced that thirty four
individuals and sixteen British Virgin Island companies, all of whom
were involved with illegal transmissions of money from Brazil, had been
indicted for violation of New York’s banking laws. [8] As Brazilian
authorities are criminally prosecuting the defendants, in it is
unlikely that District Attorney Morgenthau will prosecute them in the
United States. [9] However, the indictments were necessary to freeze
their illegally transmitted assets, which total $17.4 million. [10]
[1] David Enrich & Chad Bray, Bank of America Settles NYC Probe, Business Week online, Sept. 27, 2006, http://www.businessweek.com/ap/financialnews/D8KDFIN03.htm?chan=search.
[2] WSOCTV.com, Bank of America Will Pay Millions To Settle Money Laundering Probe, Sept. 28, 2006, http://www.wsoctv.com/news/9953620/detail.html.
[3] Enrich & Bray, supra note 1.
[4] WSOCTV.com, supra note 2.
[5] Id.
[6] Enrich & Bray, supra note 1.
[7] WSOCTV.com, supra note 2.
[8] Enrich & Bray, supra note 1.
[9] Enrich & Bray, supra note 1.
[10] Enrich & Bray, supra note 1.
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