- The Washington Times - Thursday, November 28, 2002

A New York bank pleaded guilty yesterday in a scheme involving the bulk shipment overseas of $123 million in illicit Colombian drug profits in the government's first prosecution of a bank for failing to establish a federally mandated anti-money-laundering program.
Broadway National Bank was fined $4 million after its guilty plea in U.S. District Court in Manhattan to a three-count criminal complaint that it did not file required "suspicious activity reports" involving the transfer of millions of dollars to South America and the Middle East and that it never began the mandated anti-laundering program.
The guilty plea follows a undercover investigation of the bank's transactions from 1996 to 1998 by "El Dorado," a financial crimes task force in New York led by the U.S. Customs Service and the Internal Revenue Service.
No bank officials were charged, but a grand jury continues to investigate the case. No evidence was uncovered to show that the money was tied to terrorism, authorities said.
Documents filed in federal court said Broadway National was known as "the bank of choice for narcotics money launderers and other individuals who wished to shield their financial activities from the government," and that one bank official even warned others not to invite a specific bank customer to a Christmas party because "for all we know, [he] is a drug dealer."
The criminal complaint said once the "enormous and highly suspicious" amounts of cash were brought to the bank including a duffel bag stuffed with $660,000 it was promptly wired by Broadway National managers to "several well-known money laundering havens" in Colombia, Panama, Switzerland, Lebanon and Pakistan.
The complaint said the largest of the money launderers was Alfred Dauber, who made cash deposits of $46 million in nine Broadway accounts between January 1996 and March 1998. Identified in the complaint as laundering drug profits on behalf of a Colombia cocaine cartel, Dauber has since pleaded guilty to money-laundering charges.
According to the complaint, Dauber made 250 separate deposits, all of which involved small bills wrapped in rubber bands. After dropping off bags of cash at a teller's window, the complaint said, he would leave and then return for the emptied bags which he used for future deposits.
The government's sentencing memo said that at no time did Broadway National make an inquiry to determine whether there was any legitimate business reason for the massive amounts of cash that Dauber was generating.
"Dauber and other money launderers deposited so much cash into Broadway accounts that during this period Broadway appears never to have sought cash from the Federal Reserve Bank of New York for its daily operations, and instead delivered to the federal reserve millions of dollars in cash," the memo said.
U.S. Customs Commissioner Robert C. Bonner said the bank failed to make legally-required reports to federal authorities regarding $123 million in suspicious cash deposits and assisted customers in another $76 million in transactions designed to evade currency reporting requirements.
"Despite being provided with extensive warnings about its legal obligations under the Bank Secrecy Act by both banking regulators and its own consultants, Broadway failed to establish and maintain even a minimally effective anti-money-laundering program," Mr. Bonner said.
The bank's president, Sam C. Chung, was not available for comment yesterday, although the bank's attorney, William Pollard, said Broadway National was unaware the money involved the illegal proceeds from drug sales or other crimes, and that the bank never solicited the business.
Mr. Chung was awarded the Ellis Island Medal of Honor in May 2000 along with Attorney General Janet Reno and New York Yankees manager Joe Torre. The award is given to an individual whose life is "dedicated to the American way" and to those who have contributed "extraordinary service to a particular heritage group."
Under the Bank Secrecy Act, banks are required to have an anti-money-laundering program enabling them to identify and report suspicious financial transactions to the Treasury Department. They also must file currency-transaction reports for cash deposits and withdrawals of more than $10,000.

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide