Senate Banking Holds Hearing on Combating Financing Terrorism & Money Laundering

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Monday, April 1, 2002
Bruce Zagaris
On January 29, 2002, the U.S. Senate Committee on Banking, Housing and Urban Affairs hold a hearing on “The Financial War on Terrorism and the Administration’s Implementation of the Anti-Money Laundering Provisions of the USA Patriot Act.” Sen. Carl Levin (D-MI), Chair, Senate Permanent Investigations Subcommittee, testified that his Subcommittee is surveying 22 large and small U.S. securities accounts. He explained that anti-money laundering risks because, by the nature of their business, they handle money of their clients and sent third party funds through their U.S. securities accounts. In December 2001, the U.S. recovered almost $1.7 million in funds using Sec. 319, which will be used to compensate the victims of a fraud scheme. On January 18, 2001 a grand jury in the Southern District of Illinois indicated James R. Gibson for conspiracy to commit money laundering, mail and wire fraud resulting from his defrauding clients of millions of dollars by fraudulently structuring settlement agreements for numerous tort victims. Gibson and his wife, who was subsequently indicted, fled to Belize, depositing some of the proceeds of their fraud scheme in two Belizean banks. The U.S. efforts to recover the proceeds did not succeed initially. While the Belize Government agreed to restrain the assets, a Belizean court ordered the freeze lifted, because Belize law forbade legal assistance to the U.S., especially since the proposed bilateral Mutual Assistance in Criminal Matters Treaty had not entered into force.