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|May 19, 1997|
REMARKS OF SECRETARY RUBIN
ANNOUNCEMENT OF NEW REGULATIONS
TO CRACK DOWN ON MONEY LAUNDERING
Good afternoon. Thank you for being here today for this important announcement.
With me are Ray Kelly, Under Secretary for Enforcement, Sam Banks, Deputy Commissioner of the Customs Service, Stan Morris, Director of the Financial Crimes Enforcement Network, and Ed Federico, Deputy Assistant Commissioner of the Internal Revenue Service-Criminal Investigation Division.
As most of you know, one of the core elements of the Treasury Department's law enforcement mission is the prevention and detection of money laundering.
Money laundering is the process that enables drug and gun traffickers and terrorist groups to convert illegal and unusable proceeds into usable funds. It is "life blood" of organized crime.
But is also the "Achilles heel," as it gives us a way to attack the leaders of criminal organizations. While the drug kingpins and other bosses of organized crime may be able to separate themselves from street-level criminal activity, they cannot separate themselves from the profits of that activity.
Treasury is continuously working to develop new and innovative techniques to close off the channels the launderers use to move their funds into the economy, to put the launderers themselves behind bars, and to seize their assets.
One of the most effective techniques that we have employed recently has been a Geographic Targeting Order, or "GTO," which required certain businesses that wire money to report all wire transfers to Colombia in excess of $750. The evidence showed that these businesses were being used to wire as much as $800 million in drug profits to Colombia.
I will let Ray Kelly give you the details of this enormously successful initiative. I'll only point out that since it was put in effect, the flow of drug money through these businesses to Colombia has virtually dried up. Some operations have been shut down. Arrests have been made. And millions in drug profits have been seized.
Some months ago, I visited the headquarters of Treasury's Operation El Dorado in New York, which is spearheading the GTO initiative. In discussions with the leaders of this operation, I was extremely impressed both with the strategy, and the level of cooperation among the Customs Service, FinCEN, the IRS, the NYPD, the U.S. Attorney's Office and the other authorities involved.
Today, at the urging of President Clinton, we will take steps to make the New York GTO apply nationwide. And we will be extending the reach of our anti-money laundering efforts to other businesses that could be at risk.
Let me stress that the overwhelming majority of these businesses are engaged in legitimate, and valuable, commercial activity. Indeed, the industry has been extremely supportive of our work. The new rules are only intended to make life difficult for the money launderers and their accomplices.
Now, I will give the floor to Ray Kelly, who will discuss these new measures and respond to your questions.