CIA Overlooked Red Flag From Ameses’ Bank

A suburban Virginia bank in which accused CIA spy Aldrich H. Ames allegedly stashed payments from the Russians notified the government of suspicious deposits in his account but federal officials never acted on the warnings, government sources said Friday.

The notifications were on file at the Internal Revenue Service after CIA security officials began having qualms about Ames’ wealth, but the CIA did not ask the IRS whether excessive deposits by Ames might have been reported, the sources said.

The crucial information might have led to an earlier investigation of the Ameses. However, it failed to reach the CIA or the FBI, which conducts counterintelligence investigations--and both the House and Senate Intelligence Committees are trying to learn why.

At least two currency reports on Ames and his wife, Rosario, were filed with the IRS by Dominion Bank of Virginia. The reports were made after the couple deposited cash sums totaling tens of thousands of dollars in individual amounts below $10,000--the normal threshold for triggering such reports, the sources said.

The bank reports are the latest warning to be made public that law enforcement agencies apparently missed in their investigation of Ames, who is accused of spying for the Soviets and Russians for nine years. The reports are also perhaps the most clear-cut signal of suspicious behavior.

Ames’ CIA superiors became suspicious after he paid $540,000 in cash for a house in 1989. They also questioned him, using a polygraph machine, about his finances, but they reportedly never asked the IRS for bank reports. Ames said that he purchased the house with money he inherited from his father-in-law, which prosecutors said they have determined to be false.

Other warning signs, previously reported, were the executions or disappearance of at least 10 foreign agents cooperating with the CIA at a time when Ames held a high post in the CIA’s Soviet-East European division.

Although FBI and CIA officials refused to comment, other sources said that Virginia bank executives filed reports with the IRS in the late 1980s or early 1990s out of concern that Ames was “structuring” cash deposits to keep them under $10,000 apiece.

One report, according to the sources, said that Ames had made deposits totaling $20,000 that included some Italian currency. Ames served in Rome from 1986 to 1989. The CIA now believes he received large payments there from the Russians before returning to the Washington area.

The federal law requiring currency reports, dating back to 1970, asks banks to report “structuring” as well as cash deposits of $10,000 or more. But congressional critics long have claimed that the process should be improved to increase the ability of law enforcement agencies to make better use of them in criminal investigations.

Although the law was designed in part as an early warning signal of narcotics trafficking and money laundering, critics said that the volume of reports is so great and the information so tightly held that its usefulness is reduced for agencies other than the IRS. More than 10 million currency reports are filed annually by banks, of which 75,000 are sorted out as suspicious.

“Generally, after receiving a report of a suspicious transaction, the IRS distributes the data to its own criminal investigators but usually not to the FBI or the CIA,” said Patrick Heck, a currency expert on the staff of the House Ways and Means Committee. “However, it’s all computerized, so if those agencies asked for information by a person’s name, they probably could get it.”

Heck added that “most of the time this data is used to validate an agency’s suspicion about a drug dealer or a money launderer but not to trigger an investigation, especially outside the IRS.”

Rep. J.J. Pickle (D-Tex.), chairman of the Ways and Means subcommittee on oversight, said that he has asked IRS Commissioner Margaret Milner Richardson for a report on what actions, if any, the agency has taken in response to the Ameses’ spending habits and their deposits of large sums of cash.

In a letter to Richardson, Pickle listed a number of activities and said: “Which of these transactions were reportable?”

Prosecutors said in court papers that by the late 1980s, the couple had paid cash for their house in Northern Virginia and made $99,000 in home improvements. They later purchased a 1992 Jaguar, although their reported family income was only Ames’ $69,000 annual salary from the CIA.

The FBI did not begin investigating Ames until May 12, 1993.

After the couple’s arrest last month on charges of conspiring to commit espionage, FBI Supervising Agent Leslie G. Wiser Jr. filed an affidavit detailing dozens of their cash deposits. In a five-week period in 1992, for example, the couple deposited $58,500 in eight transactions, ranging from $1,700 to $8,500, he said.

Prosecutors claim that the deposits followed Ames’ return from a secret meeting with Russian handlers in Caracas, Venezuela, in October, 1992. In all, the Ameses are accused of receiving $2.5 million in espionage payments from 1985 to 1994.

An official of First Union Bank of Virginia, which acquired Dominion Bank a year ago, said he could not comment on whether Dominion filed currency reports on the Ameses.

“I have no information about activities of the prior management,” said the official, Dave Scanzoni. “And even if I did, I could not reveal them as part of an ongoing federal investigation.”

Scanzoni said it is not uncommon, however, for banks to alert the IRS to suspicious cash deposits totaling tens of thousands of dollars, even when individual deposits are less than $10,000.

Times staff writer Robin Wright contributed to this story.