Money Laundering:

The U.S. Government Is Responding to the Problem

NSIAD-91-130: Published: May 16, 1991. Publicly Released: May 16, 1991.

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Pursuant to a congressional request, GAO examined federal efforts to address the problem of money laundering.

GAO found that: (1) money laundering deprived the nation of billions of dollars in tax revenues; (2) identifying deviations from normal patterns or major cash surpluses or deficits was helpful in targeting potential money-laundering areas or situations; (3) Congress passed legislation requiring currency transaction recordkeeping, criminal law enforcement, and financial industry supervision; (4) Bank Secrecy Act reports enabled law enforcement officials to uncover some tax violations, embezzlement, and narcotics money laundering; (5) banks could use currency transaction reports to report suspicious transactions or such illegal activities as deposit structuring to evade reporting; (6) the Internal Revenue Service, Federal Bureau of Investigations, Customs Service, Drug Enforcement Administration, and the Department of the Treasury's Office of Financial Enforcement (OFE) were involved in investigating and prosecuting suspected money launderers; (7) those agencies lacked budgetary or resource management categories relating exclusively to money laundering; (8) government data on money laundering were fragmented due to coordination difficulties and overlap among agencies; (9) international negotiations enabled officials to trace and confiscate drug profits, despite differences in bank secrecy and the absence of easy access to banking information during international financial investigations; and (10) OFE needs to increase its staff to assume the leadership role in the federal investigation of money-laundering.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Treasury officials have indicated agreement with the recommendation and have filled these positions. The director's position has been filled and the new director has stated that he will try to fill the allocated positions on a permanent basis.

    Recommendation: The Secretary of the Treasury should direct that all permanent positions allocated to OFE, including the then-vacant position of director, be filled as expeditiously as possible.

    Agency Affected: Department of the Treasury

 

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