The proposed governmental program allowing the purchase of toxic bank assets "presents an ideal opportunity" for criminals wishing to launder money, a U.S. watchdog agency said Tuesday. The disclosure comes as part of 250-page report by the Office of the Special Inspector General citing possibilities for criminal exploitation of the government's $700 billion Troubled Asset Relief Program (TARP). The plan contributes $75 billion to a separate initiative, known as the Public-Private Investment Program (PPIP), that offers incentives to investors who buy up bad bank loans. Money launderers may view the investment program as an opportunity to disguise dirty cash through...
U.S. investigators arrested the former chief executive officer of a Manhattan-based bank Monday for allegedly embezzling money from a fraudulent loan and attempting to cheat the government out of federal bailout funds.
Financial institutions should practice special due diligence in dealing with funds distributed under the Troubled Asset Relief Program because they may be used to launder money and perpetrate fraud, according to a Financial Crimes Enforcement Network advisory issued Wednesday.
A government watchdog's call for stronger anti-money laundering controls on a federal bank bailout program could result in a "significant step up" in compliance duties for companies involved, say consultants.