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[Senate Prints 107-22]
[From the U.S. Government Publishing Office]

107th Congress                                                  S. Prt.
 1st Session                COMMITTEE PRINT                      107-22
_______________________________________________________________________

 
                   SUPPLEMENT TO THE FEBRUARY 5, 2001
                    REPORT ON CORRESPONDENT BANKING:
                     A GATEWAY FOR MONEY LAUNDERING

                               __________

                              R E P O R T

                            prepared by the

                             MINORITY STAFF

                                 of the

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                                 of the

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE

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                        CASE HISTORIES 8, 9 & 10

                           February 28, 2001

                    U.S. GOVERNMENT PRINTING OFFICE
71-167                      WASHINGTON : 2001

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
SUSAN M. COLLINS, Maine              CARL LEVIN, Michigan
GEORGE V. VOINOVICH, Ohio            DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI, New Jersey
JUDD GREGG, New Hampshire            MAX CLELAND, Georgia
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
                                     JEAN CARNAHAN, Missouri
             Hannah S. Sistare, Staff Director and Counsel
     Joyce A. Rechtschaffen, Democratic Staff Director and Counsel
                     Darla D. Cassell, Chief Clerk

                                 ------                                

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  CARL LEVIN, Michigan
GEORGE V. VOINOVICH, Ohio            DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
         Christopher A. Ford, Chief Counsel and Staff Director
      Linda J. Gustitus, Minority Chief Counsel and Staff Director
              Elise J. Bean, Minority Deputy Chief Counsel
        Robert L. Roach, Minority Counsel and Chief Investigator
                     Mary D. Robertson, Chief Clerk

                            C O N T E N T S

                                 ------                                
                                                                   Page

VIII. Ten Case Histories Continued From February 5, 2001 Report

No. 8: Swiss American Bank and Swiss American National Bank......     1
    A. THE FACTS.................................................     1
       (1) Ownership and Management..............................     1
       (2) Financial Information and Primary Activities..........     3
       (3) Correspondents........................................     4
       (4) Operations and Anti-Money Laundering Controls.........     4
       (5) Regulatory Oversight..................................     5
       (6) Money Laundering and Fraud Involving SAB/SANB.........     5
          (a) Controversial Leadership...........................     5
          (b) The Fitzgerald Case--Drugs and Terrorist Money.....     8
          (c) The Gherman Fraud..................................    13
          (d) The DeBella Fraud..................................    15
          (e) The Fortuna Alliance Fraud.........................    20
          (f) Other Frauds/Questionable Accounts.................    23
          (g) Internet Gambling/Sports Betting...................    24
       (7) Correspondent Accounts at U.S. Banks..................    25
          (a) Bank of New York...................................    25
          (b) Bank of America....................................    36
          (c) Chase Manhattan Bank...............................    44
    B. THE ISSUES................................................    60

No. 9 and No. 10: M.A. Bank and Federal Bank.....................    63
    A. THE FACTS.................................................    64
    M.A. Bank
       (1) M.A. Bank Ownership and Management....................    64
       (2) Financial Information and Primary Activities..........    65
       (3) M.A. Bank's Correspondents............................    66
       (4) M.A. Bank's Operations and Anti-Money Laundering 
      Controls...................................................    66
       (5) Regulatory Oversight..................................    67
       (6) Money Laundering and Fraud Involving M.A. Bank........    68
          (a) Laundering of Drug Proceeds through M.A. Bank......    68
          (b) Unsound and Illegal Banking Practices..............    72
       (7) Correspondent Account at Citibank.....................    77

    Federal Bank
       (1) Grupo Moneta and Banco Republica......................    89
       (2) Federal Bank Ownership................................    90
       (3) Financial Information and Primary Activities..........    91
       (4) CEI...................................................    93
       (5) Correspondent Account at Citibank.....................    94
       (6) Regulatory Oversight..................................    96
       (7) Central Bank of Argentina Concerns....................    97
       (8) American Exchange Company.............................   104
       (9) Suspicious Activity At Federal Bank...................   105
    B. THE ISSUES................................................   110

    EXHIBITS.....................................................   113
  
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