Tuesday, Jan. 29, 2002

Senate Report on Money Laundering

WASHINGTON (AP) - For drug dealers, dictators or terrorists looking to launder illicit money, U.S. brokerage firms and investment banks may be convenient and anonymous places to go, Senate investigators say.

A report being released Tuesday found that securities firms have tens of thousands of offshore clients channeling billions of potentially illicit dollars into their U.S. accounts.

The banking industry already has come under scrutiny for its use by money launderers. But the securities industry also ``has clear money laundering risks that need to be addressed,'' Sen. Carl Levin, D-Mich., chairman of the Senate Governmental Affairs investigative subcommittee, said.

Subcommittee investigators found that all the 22 U.S. securities firms examined had numerous offshore customers and many of the firms said they couldn't provide an accurate count of those clients because their data systems didn't identify offshore entities. The clients include offshore corporations, trusts, banks and insurance companies.

The securities firms, which were not named, had more than 45,000 offshore clients total, with an estimated $140 billion in assets in their accounts - of which some $137 billion came from offshore corporations and trusts, according to the report.

The high-risk accounts represent about 2 percent of the U.S. firms' total accounts, it says.

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Read the full Associated Press article here