U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

71–167

" ! COMMITTEE PRINT 107th Congress

1st Session

S. PRT.

2001

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

CASE HISTORIES 8, 9 & 10

FEBRUARY 28, 2001

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

JOSEPH I. LIEBERMAN, Connecticut

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

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

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

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

(III)

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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