Bank of America Settles Money Laundering Probe
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The Manhattan district attorney said yesterday that he had brokered a settlement with Bank of America to crack down on money laundering after discovering that South American customers had used a Midtown branch to illegally transmit billions of dollars for almost two years.
While acknowledging that he has no evidence that any of the money had been funneled to terrorists, the Manhattan district attorney, Robert Morgenthau, strongly implied that the region where his investigation centered is known as a haven for terror funding.
“This enormous flow of illegal money poses a grave threat to our national security,” Mr. Morgenthau said yesterday. “There’s an awful lot that we don’t know, and that bothers us.”
In the settlement, Bank of America conceded that the bank branch at 100 W. 33rd St. failed “to react appropriately to the risk that certain … customers were engaged in illegal activity.”
The bank agreed to pay a $7.5 million fine, reimburse the city and state governments, as well as pay for the investigation. Additionally, the bank agreed to step up its anti-money laundering operations.
A Bank of America spokeswoman, Shirley Norton, said the bank had been involved with Mr. Morgenthau’s investigation for about three years, and the bank denied any wrongdoing.
Ms. Norton declined to say specifically what new anti-money laundering protections Mr. Morgaethau’s investigation prompted at the bank.
“If we talk about them, then the crooks are one step ahead of us,” Ms. Norton said.
In connection with the case, Mr. Morgenthau’s office indicted 34 people and 16 British Virgin Island companies on charges that they violated the state banking laws through illegal transactions.
The state indictments were largely a formality to allow the district attorney’s office to freeze $17.4 million that investigators say was illegally transmitted to New York from Brazil.
The same people have been indicted in Brazil for violating Brazilian financial statutes, Mr. Morgenthau said, with the help of grand jury documents that his office got a court order to provide to Brazilian authorities. He said he would continue to try to seek court permission to turn over usually-secret grand jury documents to investigators in similar cases.
