New Ways to Fight Money Laundering

By MARCY GORDON
AP Business Writer

WASHINGTON - The Bush administration's fight against money laundering will focus on the financial operations of terrorist groups, a shift in strategy influenced by last week's attacks.

New law enforcement teams in Chicago and San Francisco will join an existing one in Los Angeles in investigating and prosecuting money laundering by suspected terrorists, the Treasury Department said Wednesday. They will examine fund raising and the illicit use of bank accounts and wire transfers.

The administration is pointing to Saudi exile Osama bin Laden as the main suspect in the attacks against the World Trade Center and the Pentagon. The scheme may have been funded with money from Islamic charities and front groups and wealthy Islamic businessmen, terrorism experts say.

The money laundering strategy focuses more on prosecuting large, professional money-laundering organizations _ including lawyers, bankers and accountants who participate _ than did the Clinton administration's policy.

"We will aggressively enforce our money-laundering laws with accountability and coordination at the federal, state and international levels," Bush said in the report on the revised strategy by the Treasury and Justice departments.

The report said that money laundering is "seldom the primary focus and objective" of criminal investigations. "Our efforts must ensure that money laundering is not simply a 'tag-along' count added to an indictment," the report said.

The Clinton strategy tended to concentrate enforcement efforts on local money-laundering operations in areas with heavy drug crime.

The administration plans to ask Congress for legislation to expand the government's authority in pursuing money laundering. That includes easing privacy restrictions that limit the Internal Revenue Service's ability to share tax data with other agencies in cases involving terrorism.

Money laundering involves the movement of profits from drug or arms trafficking, political corruption, prostitution and other illicit activities through a series of bank accounts or businesses to disguise them as proceeds of legitimate business. The fight against it has gained new urgency since last week's attacks.

"We're going to be following the money wherever it leads," said Jimmy Gurule, Treasury's undersecretary for enforcement.

Experts says bin Laden uses his estimated $300 million to fund a network of as many as 3,000 Islamic militants.

His network also is believed to use an underground banking system in the Middle East and Far East that shifts large amounts of cash between small teams of people in different locations. With everything done through word of mouth in a paperless network based on personal trust, it is easy to obscure the money trail, experts say.

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