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Excerpt: "Regulators are investigating whether several major U.S. banks failed to monitor transactions properly, allowing criminals to launder money..."

JPMorgan Chase bank building in Lower Manhattan. (photo: AP)
JPMorgan Chase bank building in Lower Manhattan. (photo: AP)

Report: US Banks Subject of Money-Laundering Probe

By Associated Press

16 September 12


egulators are investigating whether several major U.S. banks failed to monitor transactions properly, allowing criminals to launder money, according to a New York Times story. The newspaper cited officials who it said spoke on the condition of anonymity.

The Office of the Comptroller of the Currency, the federal agency that oversees the biggest banks, is leading the money-laundering investigation, according to the Times. The report said the OCC could soon take action against JPMorgan Chase & Co., and that it is also investigating Bank of America Corp. Money laundering allows people to make money - often obtained illegally - appear like it came from another source.

The OCC, JPMorgan and Bank of America declined to comment.

The financial industry is struggling to mend its public image. Four years after the financial crisis, banks are getting closer scrutiny. And regulators are under pressure to show that they're not missing any questionable activity.

This summer, British bank Barclays PLC settled charges that it had manipulated a key global interest rate. Standard Chartered PLC, also based in the U.K., agreed to settle charges that it had improperly processed money for Iran, brought by the New York Department of Financial Services after the bank voluntarily informed regulators that it was reviewing relevant practices. In the spring, JPMorgan surprised shareholders with an unexpected trading loss.

If the OCC takes action, it could be similar to a cease-and-desist order that it filed against Citigroup in April. At the time, the OCC said that Citi had deficient internal controls and anti-money laundering procedures. In bank regulation, a cease-and-desist order doesn't mean that a bank has to shut down, but it is a serious sanction that requires a bank to change its practices. Citi had already told the regulator that from 2006 to 2010, it had "failed to adequately monitor" some of its transactions connected to "foreign correspondent banking."

The order in April didn't make any new, specific accusations. But it did instruct Citigroup to tighten its rules so it could improve compliance with the Bank Secrecy Act and related regulations. The act requires financial institutions to report suspicious activity and to put rules in place to try to make money laundering impossible for customers.

Last year, JPMorgan paid $88 million to settle charges from the Treasury that it had unlawfully processed money for Cuba, Iran, Sudan and Liberia.

At the time, JPMorgan said it had had no intent to violate regulations. It pointed out that it oversaw "hundreds of millions of transactions and customer records per day, and annual error rates are a tiny fraction of a percent."

It's not expected that banks would be accused of trying to show support for countries like Cuba and Iran. It's more likely that they would be accused of faulty oversight that made any unlawful transactions possible. The industry has maintained that such violations are almost always unintentional.

According to the Times, the Justice Department and the Manhattan district attorney's office are also involved. The Manhattan U.S. attorney's office and the Manhattan district attorney's office declined to comment. your social media marketing partner


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+23 # KrazyFromPolitics 2012-09-16 11:32
Yeah, Yeah. Write a story when the banksters are indicted, prosecuted, jailed, and the big banks are broken-up, with a separation of commercial and investment, and regulated. Sorry for the run on sentence. It happens when I get pissed. I am sick of theatrical probes that go nowhere.
+2 # RLF 2012-09-17 06:51
They go to fines from the government on these banks...which means you and I pay higher banking fees and the Gov. gets money. In the real world...I'd call it a tax. They will never shut it down because the wealthy use it as much as drug dealers and terrorists to avoid taxes.
+2 # HowardMH 2012-09-17 13:19
You not pissed off enough. Until there are two hundred thousand really, really pissed off people on Capital Hill (all at the same time) raising some serious hell against the Lunatics, absolutely nothing is ever, ever going to happen to these totally bought and paid for by the richest 50 people in the world that are becoming more and more powerful with each passing rigged election thanks to the stupid people.

Obama the Wimp along with Holder the puppet of Obama the Wimp are just blowing some happy dust to the Idiots that are buying it.
+12 # Kootenay Coyote 2012-09-16 12:16
Big Banks: crooked all the way down the line. Who dare trust ‘em?
+2 # RLF 2012-09-17 06:53
And now the fed is buying MB Securities to reinflate the realestate bubble. Stealing the wealth of the country once isn't enough...we're going to get a second round thanks to Bernanke and Obama. We should just pay our taxes directly to corporations and cut out the waste at the middlemen level!
+13 # Working Class 2012-09-16 12:36
I totally agree with KrazyFrom Politics. If I was found to be working with a drug cartel, I would be locked up and the key would be thrown away. Since Wall Street banks are now "people" with full rights of any other "person" thanks to Citizens United we can expect that they go to jail. Right? Don't hold your breath. We have the best government money can buy.
0 # RLF 2012-09-17 06:54
They would forfeit all assets also...WTF!!!
+6 # panhead49 2012-09-16 13:14
Wonder if that is why part of Mitt's money is offshored?
+3 # dkonstruction 2012-09-17 08:15
If drugs were legal we wouldn't have the problem of the banks laundering money from drug cartels. And, as for Cuba, there shouldn't be an economic embargo on them in the first place so this one is just nuts. It also seems to me that the fact that the US is the largest arms dealer in the world by far is a much bigger problem than the banks laundering money for arms dealers. finally, the too big to fail banks are giant criminal enterprises on multiple levels (peddling fraudulent mortgage loans, manipulating LIBOR, etc.) and so should be broken up and or put out of business so calls for more investigations regarding their money laundering schemes are far from sufficient.

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