Panel Calls On Banks to Increase Efforts to Halt Money Laundering

A Senate subcommittee called on bank regulators and financial institutions Monday to do more to uncover and stop money laundering by drug traffickers and organized crime.

“Cash is the lifeblood of organized crime, and money laundering keeps it flowing,” said Sen. Bill Roth (R-Del.), outgoing chairman of the Senate Governmental Affairs Committee and the panel’s permanent subcommittee on investigations.

Money laundering is a process by which illegal sources of money are concealed through transactions in legitimate financial institutions.

The 34-page subcommittee report issued Monday was the last in a series of reports on the situation since 1983. The report cited Justice Department estimates that $40 billion to $150 billion in narcotics money alone is laundered annually.

The subcommittee said that more emphasis should be placed on the Bank Secrecy Act, which requires banks and other financial institutions to file reports with the Internal Revenue Service for deposits or currency exchanges of more than $10,000. The act calls also for people transporting more than $5,000 into or out of the United States in cash, checks or other monetary instruments to file a report with the U.S. Customs Service.

“The Bank Secrecy Act is potentially one of the most effective tools available to law enforcement in the war against crime,” the report said.