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Remarks of Lanny A. BreuerAssistant Attorney GeneralCriminal DivisionUnited States Department of Justice22
nd
ABA/ABA MoneyLaundering Enforcement ConferenceOctober 19, 2010Washington D.C.I.
 
Introduction
 Thank you for that kind introduction, Rob. It’s a pleasure for me to be here today. I wantto thank the American Bankers’ Association and the American Bar Association for thisopportunity to speak with you.Over the last quarter century, asset forfeiture and money laundering prosecutions havebecome integral to our country’s law enforcement strategy. Whether it takes the form of drugtrafficking, fraud, or corruption, crime is – very bluntly – a business. And like any business, itrequires capital. When we forfeit the proceeds of crime and vigorously prosecute violations of our money laundering laws, we take the profit out of crime and deny criminal organizations theresources they need to survive.But because crime is a business – and because criminals must constantly hide, move, andaccess their money – they will always look for, and seek to exploit, vulnerabilities in ourfinancial system or weaknesses in a bank’s compliance structure. Thankfully, most bankers arecommitted to keeping dirty money out of their institutions. They know it is bad for business; badfor their reputations; and bad for the integrity of our banking system. Frankly, they know it is just plain wrong. That commitment to protecting our banks is the very reason that so many of you are gathered here for this important conference and I applaud you. Yet, this view is notshared by all. Indeed, the Justice Department has recently prosecuted several cases wherecompliance was simply ignored and short-term profits were put ahead of doing what was right.We have learned much from these prosecutions. When compliance officers don’t do their jobs effectively, our first line of defense is breached. When financial institutions are ambivalentabout fostering a culture of compliance – or when they fail to devote the necessary resources totheir Bank Secrecy Act and anti-money laundering programs – criminals are able to inject dirtymoney into our banks and, worse, use that money to advance their illegal activity.For these reasons, all of you play a critical role in our efforts. Money laundering schemessucceed, and criminal enterprises thrive, only when law enforcement is not in a position to detectthe dirty money moving surreptitiously through our banks. But you can be our eyes and ears.
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Today, I would like to speak with you about how the Justice Department is aggressivelydeploying its resources to prosecute those who threaten the integrity of our financial system.And, I want to describe how you can be our partner in that fight.
II.
 
Reinvigorated Criminal Enforcement
 Ten years ago, there were no criminal enforcement actions, or even serious regulatorypenalties, for the failure of banks to file Suspicious Activity Reports or comply with the Bank Secrecy Act. Indeed, the first civil penalty against a bank for failing to file SARs was imposedonly in September of 2002.Happily, things have changed. Since that first civil penalty in 2002, the JusticeDepartment has undertaken a series of investigations of financial institutions, resulting either inthe criminal conviction or deferred prosecution of at least 15 different banks – among themLloyds, Credit Suisse, Wachovia, and Barclays. Moreover, in the last three years alone, ourprosecutions of banks have resulted in forfeitures of nearly $1.5 billion dollars.In bringing these enforcement actions, we have not just focused on large banks. Indeed,the banks have run the full gamut – from Pamrapo Savings Bank, a small community bank inNew Jersey that pleaded guilty earlier this year to conspiring to violate the Bank Secrecy Act, tobanking giant Wachovia, which admitted in March in a deferred prosecution agreement to failingto establish an anti-money laundering program.In both of these cases – to put it very plainly – the institutions abdicated their roles asresponsible gatekeepers to the American banking system. Pamrapo, for example, admitted tofailing to file CTRs and SARs related to approximately $35 million in illegal and suspicioustransactions, including more than $5 million in structured currency transactions. Wachoviaadmitted to allowing at least $110 million of drug proceeds to flow unimpeded through itsaccounts. As seen in just these two cases, the amount of dirty money that can move through asingle bank can be staggering.It is not surprising, then, that the use by criminals of our banking system to laundermoney poses a significant criminal threat. All you have to do is look at the cartel-drivenbloodshed in Mexico, the damage that organized crime syndicates can inflict on ourcommunities, and the millions of dollars that Americans lose each year to fraud, to see why theJustice Department is so committed to prosecuting and punishing money launderers.Money laundering, moreover, is not the only concern we as law enforcement have whenwe talk about protecting the integrity of our banks. Indeed, we have been equally vigilant aboutgoing after those banks that have, for their own profit, purposefully violated U.S. sanctionsagainst certain countries – sanctions that are meant not only to protect our banks, but also toaffirmatively block specific countries from using our financial institutions. Last year, forexample, Credit Suisse admitted to systematically evading – over the course of a decade – U.S.sanctions against Iran, Sudan, Burma, Libya, and Cuba. Credit Suisse set up a system – somemight even call it a business plan – to deceive the United States by disguising its U.S. dollarclearing on behalf of countries that the United States had banned from our financial system. The
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bank’s actions ranged from stripping out the word “Iran” from payment messages, to substitutingcode words for Iranian customer names, to hand-checking payment messages from Iran to ensurethat they had been formatted to avoid U.S. sanctions filters. Credit Suisse even advised andtrained the sanctioned entities on how to avoid automated filters at U.S. banks. In essence,evading our banking regulations was a service offered by Credit Suisse to sanctioned countries.As a result, Credit Suisse illegally moved hundreds of millions of dollars through the Americanfinancial system. As part of a deferred prosecution agreement with the Justice Departmentrelating to this conduct, Credit Suisse forfeited $536 million dollars to the government.In each of the cases I just described, the bank’s compliance processes fell far short. Now,I am very aware that at many banks, Bank Secrecy Act and anti-money launderingresponsibilities are considered a cost-center. Setting up an effective compliance program todetect and report suspicious activity means accruing significant expenses for technology,personnel, and training – all without the promise of any short-term profits. But if there is onemessage I want to leave you with today, it is that financial institutions simply cannot cut cornerson compliance: having a compliance program that works is worth it. Indeed, as our recentprosecutions show, failing to adopt and maintain a real compliance structure will have seriousconsequences. Frankly, not having a robust compliance program makes absolutely no businesssense. 
III.
 
Our New Initiatives
Now, more than ever, the American public wants, and deserves, trust and transparencyfrom the financial industry. The public wants to see profits, of course, but not
 
at the expense of the security of our banks. To that end, I want to talk with you today about two new initiativesthat I believe will significantly enhance the Justice Department’s enforcement efforts. Twoinitiatives that I am proud of.First is the creation of the Money Laundering and Bank Integrity Unit within theCriminal Division’s Asset Forfeiture and Money Laundering Section. The creation of this Unitis a testament to, and builds upon, our recent enforcement successes. The new Unit will bedevoted to investigating complex, national and international criminal cases, and will focus onthree specific types of violators: first, financial institutions, including their officers, managers,and employees, when their actions violate the law; second, professional money launderers whosell their services to criminal organizations; and third, those engaged in using the latest and mostsophisticated money laundering techniques, such as virtual currency and mobile paymentsystems. By standing up this new Unit, we are committing significant resources, and expertise,to prosecuting those who funnel crime proceeds through our banks. Moreover, we are seeking tostaff the Unit with sophisticated, talented and aggressive lawyers – prosecutors and lawyers fromthe banking industry – those who know the complicated mechanisms by which money movesthrough the global financial system, and those who understand how organized criminal networkswork.Our second new initiative is the Kleptocracy Asset Recovery Initiative, which will targetand recover the proceeds of foreign official corruption that have been laundered into or throughthe United States. In November of last year, at the Global Forum on Fighting Corruption and
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