Regulators on trail of money laundering

Sept. 15, 2012 at 10:42 AM
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WASHINGTON, Sept. 15 (UPI) -- U.S. regulators are investigating transactions at major banks that reveal patterns of money laundering, government officials told The New York Times.

The federal Office of the Comptroller of the Currency is leading the investigations, which are also under way at the Justice Department and the Manhattan district attorney's office, the Times reported, saying the officials wished to remain anonymous.

The investigations are being conducted in part because regulators are beginning to move away from looking at the behavior of bankers that contributed to the financial meltdown of 2008.

The Senate Permanent Subcommittee on Investigations said in July British bank HSBC had put U.S. security at risk by channeling money through its system that was tied to a Saudi Arabian bank with connections to terrorism. The incident provoked allegations that U.S. regulators were asleep at the wheel, which prompted a new push to ferret out banks that were soft on suspicious money movement.

Regulators are expected to expose substandard compliance at JPMorgan Chase, which would be another black eye for the bank that agreed to pay $88.3 million to the Treasury Department to settle charges it was doing illegal banking for Cubans in 2005 and 2006.

Officials said in 2009 the bank had made a $2.9 million loan to a bank that did business with a shipping line owned by the Iranian government, and Treasury officials said in 2011 the bank's "managers and supervisors ... recklessly failed to exercise a minimal degree of caution or care," in complying with regulatory safeguards.

The bank said it was not directly involved with the Cuban and Iranian transactions, but that it was only the middleman in the illicit money movement, the Times said.

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