AN OVERDUE CRACKDOWN

Washington Wants To Target Money Launderers

FOR YEARS, it has been an open secret that America's attempts to stem money
laundering have been about as effective as North Jersey's efforts to curb
sprawl. But now, Washington may finally be ready to crack down on the
criminals who have used loopholes in our laws to sanitize their criminal
proceeds.

Last week, on the heels of a massive Russian money laundering scandal said
to involve American banks, the Clifton administration proposed a
far-reaching strategy to go after the billions in dirty dough that gets
sanitized every year. The game plan includes: • requiring casinos, check
cashiers, brokerage firms, and other financial services firms to report all
suspicious big money transactions, such as using small bills to pay for a
large electronic money transfer; •clarifying the laws on taking large
amounts of cash out of the country; • increasing law enforcement in regions
such as New Jersey, where money laundering is rife; • cracking down on
illegal international cash transactions by expanding the list of foreign
money laundering crimes punishable by U.S. law—including the misuse of
American aid.

It's about time. As The Record's award winning series "Dirty Money" has
shown, laundering tainted cash is not only a cornerstone of illegal drug
trafficking, but it enables all sorts of shady operators to evade paying
millions upon millions of dollars in taxes.

Several of the proposals in the package would bolster New Jersey's mixed
efforts to go after money launderers.

The Garden State would be a strong candidate for increased federal
enforcement efforts because it is such a popular destination for tainted
money. The state has thriving ports, a major international airport at
Newark, all those cash gobbling casinos in Atlantic City, and a perfect
location — between Philadelphia and New York City. Last year alone, $14
million in cash was confiscated at the state's ports, including an $11
million seizure at Port Newark. But that's considered a ripple in the tidal
wave of dirty cash leaving through our ports.

Atlantic City has long been a haven for money launderers, who can take
satchels crammed with $10 and $20 bills into casinos, buy gambling chips,
and then cash them in a short time later for larger, untraceable bills—or
transfer the money electronically. Similarly, check cashers in New Jersey
currently must keep track of large cash transactions but aren't required to
notify law enforcement of suspicious transactions. The proposed Treasury
regulations requiring the casinos and check cashers to report these dubious
transactions is an excellent idea.

Also in the package is a bill introduced this year by Rep. Marge Roukema,
R-Ridgewood, to strengthen federal laws against the bulk smuggling of
American currency. Until mid 1998, Customs agents tried to stem this
outbound flow of tainted money by confiscating any undisclosed cash above
the $10,000 federal reporting threshold. But the rules changed last year
when the Supreme Court ruled that seizing the unreported bulk cash at the
borders was excessive, because the only law being broken was a failure to
disclose the money. Mrs. Roukema's bill would clarify the circumstances
when the money could be seized. That way, the revised law likely would pass
constitutional muster. Good move.

Both Congress and the Clinton administration have dragged their feet on
combating money laundering, then blamed each other for the delays. But
after that massive Russian money laundering scandal, in which the Russian
mob moved an estimated $7.5 billion in tainted cash through the Bank of New
York and other American banks, Washington may finally stop the finger
pointing and start clamping down on dirty money.