I am writing on behalf of the members of the Fraternal Order of Police to advise you of our support for S. 3697, the “Combatting Money Laundering, Terrorist Financing, and Counterfeiting Act.”
This legislation would update and strengthen Federal laws to combat money laundering and provide law enforcement with additional tools to restrict the ability of criminals to profit from their crimes. The bill proposes doubling the penalties for those who violate bulk-cash smuggling laws.
Transnational criminal organizations like drug cartels will often move money across international borders by hiring couriers, also known as mules, who then deliver it to another stranger. In this way, the mule remains ignorant of the organization’s operation and, if detained by law enforcement, can provide no useful information about the criminal enterprise. However, while these mules may not have operational knowledge, they are certainly aware that they are violating the law by helping to launder proceeds from criminal activity. A ruling by the U.S. Supreme Court concluded that it is no longer enough to prove that the mule was engaged in the clandestine transport of the illicit funds, but that they must also know precisely why the proceeds were transported in this manner. Obviously, this information is rarely known by mules. Your bill would clarify the statute and effectively reverse the Court’s decision in such cases and restore an important law enforcement tool.
The legislation would also address the issue of criminal proceeds being quickly removed from existing bank accounts following the detention of a person engaged in money laundering. It would allow the government to obtain an order to freeze the accounts of any person arrested for offenses involving the movement of funds into or out of the United States. This temporary measure will give law enforcement the time they need to investigate the activity and determine if it is criminal in nature.
The bill updates current law with respect to hawalas and other informal value transfer systems like those used by international terrorists and trafficking organizations. It restores Federal wiretap authorities for certain cash smuggling and counterfeiting offenses as well as updates the counterfeiting law to reflect the use of new technologies that are used to produce counterfeit U.S. currency. Additionally, your bill clarifies that the U.S. Secret Service has the jurisdiction to pursue money laundering investigations and unlawful activity against any financial institution. This would also include the authority for the U.S. Secret Service to go after ransomware attacks.
This legislation also strengthens the ability of U.S. law enforcement to obtain information and records from foreign banks. For example, a prosecution of a terrorist case was impeded when a bank headquartered in the Kingdom of Saudi Arabia refused to comply, citing deficiencies in the existing statute. The amendments to Federal law in this bill would give our investigators the authority and tools to retrieve these records when requested and put foreign banks on notice that U.S. law enforcement will not be impeded by foreign laws or regulations if we have proper jurisdiction.
Federal law enforcement agencies like the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Drug Enforcement Administration (DEA), and the U.S. Marshals Service (USMS) often station officers at dangerous posts abroad and compensate their agents with a danger pay allowance. This legislation would expand the danger pay allowance to officers and agents in similar postings with U.S. Customs and Border Protection, Immigration and Customs Enforcement, and the U.S. Secret Service.
On behalf of the more than 364,000 members of the Fraternal Order of Police, we are pleased to support this necessary legislation, which we believe will have an incredibly positive impact on the ability of law enforcement to combat money laundering and deny profits from unlawful activities of criminals. If I can provide any additional information about this bill, please do not hesitate to contact me or Executive Director Jim Pasco in our Washington, D.C. office.