WASHINGTON - Between 1991 and 2000, $1.4 billion was moved from overseas banks through corporate accounts at Citibank and Commercial Bank of San Francisco after the U.S. banks failed to properly identify the accountholders, according to a report by congressional investigators.
The General Accounting Office report concludes that 236 such accounts were opened on behalf of corporations registered in Delaware by an agent for Russian brokers.
The agent did not know the owners of the companies, but represented to the banks that he had checked the firms and found them legitimate, the report says.
Sen. Carl Levin, D-Mich., who last year held hearings to investigate alleged money laundering at Citibank, requested the GAO probe in February.
In a statement issued Wednesday, Sen. Levin said, "All the elements are here to suggest illicit activity and misuse of the U.S. banking system."
In a letter to the GAO, Citibank admitted to lapses in its due diligence processes but noted that all of the accounts associated with the agent in question have been closed.
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