B of A has get-tough policy to battle money laundering.

MIAMI -- At Bank of America, customers deemed "highrisk" must sign an agreement allowing the bank to disclose customer information to law enforcement agencies and financial institutions.

That's a strict way to deter money laundering, but Stephen Harvey, vice president for compliance at the BankAmerica Corp. unit, said it works.

"If they don't sign," Mr. Harvey said, "we don't do business." The bank adopted the unusual rule about two years ago.

Can't Know Everyone

With 10 million customers in 2,000 branches worldwide, Mr. Harvey said, it's impossible to know them all. The key, he said, is to segment the customer base, identifying potential high-risk portions. "We know those people inside-out," he said.

High-risk customers are identified in two ways.

First, Bank of America looks at the type of business a customer does. For example, Mr. Harvey said, exchange houses are considered high-risk. The San Francisco-based bank's other criterion is geography. It lists 21 countries, including Panama and Colombia, as high-risk.

Mr. Harvey explained his bank's anti-money-laundering program to an audience of bankers in Miami last month at the International Money Laundering Conference sponsored by Alert Publications Partners.

In extremely high-risk areas, Bank of America will not open an account without first visiting the customer's offices, he said. In addition, each customer must fill out documents detailing his or her business.

Mr. Harvey said it's vital that everyone at the bank, from the lowest level to the chief executive, have compliance responsibilities and knowledge. "You're only as strong as your weakest link," he said.

Money laundering, he noted, can hit any bank, big or small. "Wherever you've got a bank, there's potential for laundering," he said.

Community Banks, Too

Phillips G. Gay Jr., senior vice president for compliance at the $550 million asset Bank of North America, Fort Lauderdale, Fla., said customer identification applies to community banks like his, too.

His bank officers read local papers to keep up to date on area businesses, Mr. Gay said, adding that the bank monitors account activity for suspect transactions.

Mr. Harvey warned that some new scams are sophisticated. He recounted a case in which someone laundered $10 million through a bank by feeding small deposits into hundreds of accounts through an automated teller machine one night.

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