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JP Morgan probed in money laundering case

March 9, 2004 at 10:57 AM   |   Comments

NEW YORK, March 9 (UPI) -- New York state banking officials are seeing if J.P. Morgan Chase broke know-your-customer rules with a client who was an unlicensed money transfer operator.

As national security concerns have grown, so have the responsibilities of banks to know who their clients actually are, the Wall Street Journal reported Tuesday.

After a Feb. 23 conviction of Beacon Hill Service Corp. for operating as an unlicensed money transfer business, Manhattan's district attorney asked state and federal regulators to investigate Beacon's bank, J.P. Morgan Chase.

Its link with Beacon came through a predecessor, Chase Manhattan, which began handling Beacon's banking before Chase merged with J.P. Morgan in 2000.

Beacon took deposits and transmitted money on behalf of Latin American clients, including wealthy individuals and money-exchange houses.

As Beacon Hill's bank, J.P. Morgan Chase accepted deposits from Beacon until Beacon's office was searched on Feb. 4, 2003, by agents with the Manhattan district attorney's office.

Robert Morgenthau, who heads that office, has asked state and federal regulators to see if J.P. Morgan Chase failed to familiarize itself with Beacon, and if such a failure would be punishable.

State officials reportedly have begun such a probe.

© 2004 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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