16 June 1998
Source: http://www.usia.gov/current/news/topic/global/98061110.lgi.html?/products/washfile/newsitem.shtml

United States Information Service Washington File

11 June 1998

### TEXT: MARY LEE WARREN TESTIMONY ON ANTI-MONEY LAUDERING EFFORTS

    (Dept. of Justice official comments on proposed legislation)  (5020)

    WASHINGTON -- "In ongoing anti-money laundering initiatives, our
    primary line of attack against domestic and international drug and
    other money launderers has been and continues to be to focus on
    denying our financial system to money launderers," says Mary Lee
    Warren of the Justice Department.

    Testifying June 11 before the House Committee on Banking and Financial
    Services, Warren outlined law-enforcement efforts of the Justice and
    Treasury Departments against the laundering of illicit proceeds from
    drug trafficking or other criminal activities.

    Although foreign drug cartels depend upon the U.S. market, Warren
    said, they become vulnerable as soon as they sell their products in
    the United States. As she explained, once illegal drugs are smuggled
    across the border and sold in the U.S., "that trafficker or his
    domestic or international money launderer immediately faces a U.S. law
    enforcement anti-money laundering regime in the form of Bank Secrecy
    Act laws and regulations, including large-value and suspicious
    reporting, federal, state and local anti-money laundering
    investigators, prosecutors and regulators, undercover operations,
    court-authorized electronic surveillance interceptions" and other
    sophisticated means of identifying unlawful transactions.

    "Our banks and other depository institutions are our first line of
    defense against the placement of illicit cash proceeds into our
    financial system, and for the past two decades we have been working
    with these institutions to deny launderers easy access directly into
    those institutions," she stated. "While exceptions still occur, we
    have largely succeeded in barring launderers' direct access to our
    banks."

    In consequence, Warren added, money launderers are often forced to
    resort to non-bank financial service providers such as wire remitters
    and vendors of money orders, but increasingly U.S. financial
    regulators are limiting their access to these resources, as well.

    She discussed at length the strategies of the U.S. legal system,
    encompassing both current and pending legislation, to restrict the
    money-laundering capabilities of criminal enterprises.

    Following is the text of her statement, as prepared for delivery:

    (begin text)

    Statement of Mary Lee Warren, Department of Justice

    Thank you, Chairman Leach and Members of the Committee. I am Mary Lee
    Warren, Deputy Assistant Attorney General in the Criminal Division of
    the Department of Justice. I very much appreciate the opportunity to
    address you concerning anti-money laundering enforcement efforts that
    we at the Department, and in tandem with the Department of the
    Treasury, are considering or undertaking to enhance our joint
    abilities to identify, target and prosecute domestic and international
    money launderers, as well as seize, freeze and forfeit their assets.
    You have also requested our preliminary views on two pieces of
    anti-money laundering legislation, the Money Laundering Deterrence Act
    of 1998 (H.R. 4005) and the Money Laundering and Financial Crimes
    Strategy Act of 1998 (H.R. 1756). I will comment briefly on these
    bills, as well as offer a description of legislation that the
    Administration has proposed.

    Targeting the Money

    Clearly, illicit proceeds generated from criminal activity serve as
    the rationale of any "for-profit" criminal activity. An equally
    accurate, though rarely stated, fact is that -- at least where
    organized criminal activity generates its profits in the form of cash
    -- the volume of this illicit cash and the need of the enterprise to
    enter it into the legitimate financial system are vulnerabilities for
    that criminal enterprise, and could provide law enforcement with
    perhaps its best opportunity to target those illicit proceeds.

    Equally important, the international drug trafficker produces,
    processes and transports his illicit products in places with only a
    limited U.S. law enforcement presence until the moment his product
    arrives at the borders of the United States. Once the illicit drugs
    are sold in the U.S., however, that trafficker or his domestic or
    international money launderer immediately faces a U.S. law enforcement
    anti-money laundering regime in the form of Bank Secrecy Act laws and
    regulations, including large-value and suspicious reporting, federal,
    state and local anti-money laundering investigators, prosecutors and
    regulators, undercover operations, court-authorized electronic
    surveillance interceptions, and interagency attacks such as Geographic
    Targeting Orders.

    Thus, our basic anti-money laundering objective must be and is
    currently to identify and prevent the initial placement of drug
    proceeds into our nation's financial system. It is at this stage that
    the launderers of drug money are most vulnerable to detection and
    prosecution, and their illicit proceeds are most vulnerable to
    identification, seizure and forfeiture.

    Financial Sector Strategy of Attack

    In ongoing anti-money laundering initiatives, our primary line of
    attack against domestic and international drug and other money
    launderers has been and continues to be to focus on denying our
    financial system to money launderers.

    Our banks and other depository institutions are our first line of
    defense against the placement of illicit cash proceeds into our
    financial system, and for the past two decades we have been working
    with these institutions to deny launderers easy access directly into
    those institutions. While exceptions still occur, we have largely
    succeeded in barring launderers' direct access to our banks. As a
    result, illicit cash proceeds money launderers necessarily are looking
    more than ever before to other non-bank, financial institutions, such
    as wire remitters, casas de cambio, vendors of money orders and
    traveler's checks, and check cashers to introduce drug proceeds
    indirectly into our banks.

    We view these institutions as representing discrete financial sectors,
    and are continuing to work jointly with the Treasury Department, the
    Postal Inspection Service and federal regulators to identify abuse of
    these sectors by the money launderers, and to deny access to our
    financial system through these entry points.

    1. Geographic Targeting

    The most successful joint attack to date on a discrete financial
    sector has been in the use of the Geographic Targeting Order ("GTO")
    in the New York City/New Jersey area with respect to money remissions
    to Colombia, and in a GTO targeting the New York City/New Jersey area,
    as well as Puerto Rico for money remissions to the Dominican Republic.
    In each case, by reducing the reporting requirements below the $10,000
    threshold, and mandating identification, we disrupted the flow of drug
    currency through money remittance houses by making the money
    launderers more vulnerable to identification and thus prosecution, and
    the drug proceeds more exposed to seizure and forfeiture. We squeezed
    the illicit proceeds out of a licit, but vulnerable part of the sector
    that was being corrupted by the money launderers.

    2. Proposed Regulations

    Applying the methodology used in the New York/New Jersey GTO, law
    enforcement collectively is examining a host of non-bank financial
    institutions more closely than ever before. On May 21, 1997, FinCEN
    published three notices in the Federal Register proposing: (1) to make
    specified money service businesses (traveller check and money order
    issuers and sellers and money transmitters) subject to Suspicious
    Activity Reporting; (2) to require national registration with the
    Department of the Treasury by money service businesses (traveller
    check, money order and stored value sellers and redeemers, check
    cashers, retail currency dealers or exchangers and money
    transmitters); and (3) to require a new identification process and
    federal reporting by money transmitters remitting $750 or more in cash
    outside of the United States.

    3. Forging a Collective Approach

    Use of the GTO mechanism and passage of the proposed regulations are
    but first steps. More must and will be done to target the attempts to
    place immense volumes of illicit currency into U.S. financial sectors,
    as well as those attempts to move currency physically out of, and
    then, once in a financial system, to transfer it back into the United
    States. We believe that the most important lesson from the GTO is the
    value of consistent and close interagency cooperation at all stages of
    financial sector targeting strategy. Prosecutors and investigators
    must work actively and in tandem to target the appropriate financial
    sector, to identify their targets, to obtain and analyze as many
    financial records as can be made available, and, if necessary, to take
    the time to start enforcement at the lowest level and work slowly up
    the ladder.

    Further, we believe a collaborative approach must be utilized in the
    Districts in order to assure that the Suspicious Activity Reports
    (SARs) are reviewed and acted upon. At two prior national Department
    of Justice/Treasury Financial Sector Targeting Conferences, we have
    stressed to the more than 21 Districts that participated the value of
    constituting, with an Assistant United States Attorney actively
    participating, interagency SAR Review Teams in their Districts. We
    will continue to press for this collaborative approach.

    4. Targeting Outbound and Inbound Cash

    A crucial point, however, must be remembered: if we are 100%
    successful in denying drug money launderers the ability to place their
    millions in illicit proceeds directly or indirectly into our financial
    system, the launderers will still bulk ship the currency out of the
    United States. Indeed, as our financial sector attacks have developed,
    we are seeing more and more bulk cash shipping every day through every
    conceivable method. In two prior national Department of
    Justice/Treasury Financial Sector Targeting Conferences, as well as at
    smaller working group meetings, we have focused on the need to target
    the bulk cash smuggling of currency out of the United States and, the
    later movement of the currency, largely by courier, back into the
    United States. One possibility being discussed by Treasury and Justice
    involves funding and studying technological aids that would permit the
    detection of large volumes of currency being smuggled into the
    country.

    Inbound currency largely is repatriated by couriers who file Currency
    and Monetary Instruments Reports (CMIR). In this area, we will
    scrutinize these filings more closely, work with our foreign
    counterparts to verify the CMIR information as soon as possible,
    perhaps contemporaneously, and utilize all state and federal laws to
    prosecute couriers bringing in illicit drug proceeds, as well as seize
    and forfeit these proceeds. In this connection, we will encourage all
    States to adopt money courier licensing requirements that, where not
    followed, permit law enforcement to take immediate action. This
    approach already has been employed successfully in Miami;
    unfortunately, other states have practiced less vigorous oversight.

    International Cooperation and Colombian Money Laundering/Asset
    Forfeiture Unit Training

    The reality of the increasing use of bulk cash smuggling also
    reemphasizes the importance of our continuing to work closely,
    bilaterally and multilaterally with those countries and areas
    receiving this cash. We must ensure that those countries have the
    political will and professional capability to identify, track and
    seize illicit drug proceeds entering their territory, whether in the
    form of cash, wire transfers, or in other financial instruments, and
    that we have bilateral mechanisms in place to permit us to work
    together, as appropriate, to sift out the licit from the illicit
    proceeds.

    In an unprecedented collaboration of in-country and Headquarters
    training, this month in the Washington, D.C. area, investigators and
    prosecutors in Colombia's new Anti-Money Laundering/Asset Forfeiture
    Unit are being given intensive, specialized training by a
    Justice/Treasury team of prosecutors, and investigators. This training
    of the Unit made up of prosecutors from the Colombian Fiscalia, and
    investigators from the CTI, DAS and National Police, as well as
    financial and banking intelligence agencies, supplements the ongoing
    training and support provided in Bogota by the Criminal Division's
    Overseas Prosecutorial Development, Assistance and Training (OPDAT)
    and International Criminal Investigative Training and Assistance
    Program (ICITAP).

    At the core of the training is the need for a task force approach of
    the investigators and prosecutors working together over a period of
    time against these sophisticated crimes and criminals. The Colombian
    Prosecutor General's Office has given its commitment not to remove any
    of the assigned prosecutors or investigators from this unit for the
    next three years, other than for cause. In addition to the basic
    regimen of anti-money laundering/asset forfeiture training, this
    course of instruction will focus on the Colombian Black Market Peso
    Exchange Process, [see footnote 1] and to the importance of Colombia's
    aggressively enforcing its recently-enacted anti-smuggling law.

    As is always the case, the ultimate proof of this training will be in
    investigations undertaken, prosecutions successfully completed and
    illicit proceeds identified, seized and forfeited. Even prior to the
    U.S. training of the Unit, however, we have seen great progress made.
    The Unit, acting with the Department of Justice's Judicial Attache in
    Bogota, has quickly and aggressively pursued Colombian destination
    accounts identified by U.S. investigators as used in drug proceeds
    money laundering. We understand that the Unit currently is developing
    further money laundering investigations using these accounts as their
    starting points.

    Legislation

    Several bills are now pending in Congress that address the need to
    revise and enhance the money laundering statutes in response to the
    increasingly international nature of criminal activity. I will briefly
    offer comments on the bills now pending in this Committee and then
    will discuss two significant Administration proposals.

    1. The Money Laundering Deterrence Act of 1998 (H.R. 4005) and Money
    Laundering and Financial Crimes Strategy Act of 1998 (H.R. 1756)

    You have requested our views on the "Money Laundering Deterrence Act
    of 1998," as well as the "Money Laundering and Financial Crimes
    Strategy Act of 1998." The Criminal Division has had a preliminary
    opportunity to work both with your staff, as well as the staff of
    Congresswoman Velazquez, to review the draft proposals and to offer
    technical comments.

    Our initial technical view of the "Money Laundering Deterrence Act of
    1998" is very favorable. It contains a provision relating to
    Geographic Targeting Orders that is similar to a provision of the
    International Crime Control Act, which I will mention later. Also, the
    proposal contains a provision transferring 26 U.S.C. no. 6050I from
    the Internal Revenue Code to Title 31, and applying the sanction of
    forfeiture to violations of that statute. We support the forfeiture
    provisions, which are part of the Department's money laundering
    proposal, and understand the need to transfer the functions from Title
    26 to Title 31. [footnote 2]

    Another provision of the Administration's money laundering proposal
    that we would ask you to consider adding to the Money Laundering
    Deterrence Act of 1998 is the provision concerning the forfeiture of
    fungible property in a bank account. A key element of the government's
    strategy for recovering the laundered funds in any money laundering
    case is 18 U.S.C. no. 984. That statute, which was drafted by this
    Committee and was enacted as part of the Annunzio-Wylie Anti-Money
    Laundering Act in 1992, provides that all bank deposits are fungible,
    and thus authorizes the forfeiture of money from a bank account
    without requiring the government to prove that the money in the
    account on one day is the "same money" as was in the account on a
    prior occasion. Because bank accounts to which laundered funds are
    transferred typically fluctuate broadly, with balances frequently
    falling to zero, recovery of the money would be impossible without no.
    984.

    Unfortunately, no. 984 has a one-year statute of limitations. In other
    words, under current law, bank deposits are only considered fungible
    if the government initiates the forfeiture action within a year of the
    money laundering offense. Because investigations may continue for
    several years, much of the laundered money will fall outside the
    one-year limitations period and will not be recovered. The
    Administration's proposal addresses this problem by extending the
    limitations period to two years. We hope the Committee will consider
    making this proposal part of the Money Laundering Deterrence Act of
    1998.

    With respect to the "Money Laundering and Financial Crimes Strategy
    Act of 1998," again we have had an opportunity to review this proposal
    in the past. Last year, the Departments of Treasury and Justice
    submitted a collectively-produced revised proposal on this
    legislation, and we are pleased that at least some of our joint
    recommendations were accepted. Again, speaking only from a technical
    perspective, although we do not object to the idea of a national money
    laundering strategy, we believe that the proposed legislation may be
    too broad, and that the strategy, at least initially, should focus on
    the placement of drug and other illicit proceeds into our financial
    system, or its export in the form of bulk cash shipping. We look
    forward to continuing to work with you and your staffs on that
    legislation.

    2. Legislative Proposals of the Administration.

    a. The Money Laundering Act of 1998 (H.R. 3745)

    To enhance federal law enforcement's ability to combat illegal money
    laundering, the Department of Justice has drafted a bill entitled the
    "Money Laundering Act of 1998." Most, but not all, of the provisions
    in this proposal were included in H.R. 3745, a bill pending in the
    House Judiciary Committee.

    The bill was designed to address the international laundering of
    criminal proceeds, either by criminals who commit crimes abroad and
    launder them in the United States, or by those who commit offenses in
    this country and then seek to conceal their ill-gotten gains abroad.
    For example, in keeping with the recommendation of the G-8 countries
    last month in Birmingham, England, the bill would expand the list of
    "specified unlawful activities" which constitute the predicate
    offenses for money laundering to include an array of foreign crimes,
    including crimes of violence, terrorism, fraud and corruption. This
    would make it possible to prosecute a person who commits such crimes
    in another country and attempts to launder the proceeds through our
    domestic financial institutions.

    I would like to highlight just a few of the other important provisions
    of this legislation:

    -- Money Purchased on the Black Market. Law enforcement believes that
    billions of dollars of drug proceeds generated in the United States is
    sold on the black market peso exchange to South American customers. In
    this way, the drug trafficker exchanges U.S. dollars for the local
    currency he needs to pay his employees and continue his drug
    trafficking operation. See "FinCEN Advisory: Colombia Black Market
    Peso Exchange," November, 1997. One of the best ways to interrupt the
    recycling of drug money in this fashion is to confiscate the money
    sold on the black market under the civil forfeiture laws.

    Unfortunately, current law allows a third party in possession of
    laundered drug money to defeat the forfeiture action by asserting lack
    of knowledge that the money was derived from drug trafficking at the
    time he purchased it on the peso exchange. In other words, he has no
    affirmative duty to inquire as to the source of the money or to take
    any steps to avoid purchasing money derived from illegal activity
    [footnote 3]. Indeed, by simply asserting "lack of knowledge," black
    market customers can defeat efforts to confiscate drug proceeds more
    easily in money laundering cases than in most other contexts [footnote
    4].

    Section 16 of H.R. 3745 takes the standard used in drug cases and
    other contexts and applies it to money laundering. It simply requires
    that a person who buys laundered drug money on the black market must
    establish that he was a bona fide purchaser who took all reasonable
    affirmative steps to make sure that he was not buying property derived
    from a criminal offense.

    -- Fugitive Disentitlement. Until 1996, fugitives were barred from
    contesting the civil forfeiture of their property unless they
    surrendered to face related criminal charges. In Degen v. United
    States, 116 S. Ct. 1777 (1996), however, the Supreme Court held that
    judges lack the authority to dismiss automatically claims filed in
    absentia by fugitives. Thus, under present law, the fugitives will be
    able to contest the civil forfeiture of their bank accounts without
    surrendering on the criminal charges. This vitally important provision
    was added to H.R. 3745 in an amendment offered by Rep. Wexler at the
    subcommittee mark-up on June 5, 1998.

    -- Civil Money Laundering Jurisdiction. When a bank launders drug
    money in the United States, the government may file a civil
    enforcement action against the bank under 18 U.S.C. no. 1956 (b). We
    have filed such actions against domestic banks in the past, and will
    do so against foreign banks, as the circumstances warrant. However,
    our ability to bring such an enforcement action is limited by the
    absence of a federal "long-arm" statute giving the federal courts in
    personam jurisdiction over foreign banks that violate U.S. money
    laundering laws. Also, the government's ability to recover against
    foreign defendants in a no. 1956 (b) action is limited by the absence
    of any provision explicitly authorizing the court to restrain the
    defendants' property in the U.S. pre-trial to ensure its availability
    to satisfy the civil judgment. Section 7 of H.R. 3745 addresses both
    problems.

    -- Proceeds of Parallel Transactions/Continuing Offense. Money
    laundering often proceeds through several steps -- the initial
    placement,then a series of layering transactions, until it reaches a
    final destination. Under current law, each step in the money
    laundering cycle must be charged as a separate offense, and the
    government must prove that each offense involves the proceeds of
    "specified unlawful activity" [footnote 5]. Thus, any instance where a
    defendant deposited the drug proceeds into one account, but then
    committed the next step in the scheme by transferring money from a
    separate account, posed a problem for the prosecutors; while the
    second step in the scheme would have to be charged as a separate
    offense, it would not necessarily be one involving drug proceeds.
    Section 12 of H.R. 3745 addresses part of this problem by permitting
    the government to charge money laundering as a continuing course of
    conduct. Another provision added to the bill addresses the rest of the
    problem by treating money involved in both parts of a parallel
    transaction as criminal proceeds.

    -- Commingled Bank Accounts. The amendments at the subcommittee
    mark-up also address another problem involving the laundering of funds
    that are commingled with other funds in the same bank account. In
    United States v. Rutgard, 108 F.3d 1041 (9th Cir. 1997), a defendant,
    who was ultimately convicted of health care fraud, wire transferred
    millions of dollars from his bank account in California to an account
    in the Isle of Man when he became aware that he was under
    investigation. The government charged the defendant with money
    laundering under no. 1957, alleging that the money transferred to the
    Isle of Man was the proceeds of the fraud scheme. But the Ninth
    Circuit held that because the California account contained commingled
    funds, some of which were from a legitimate source, the defendant was
    entitled to a presumption that the criminal proceeds remained in the
    California account while the legitimate funds were transferred
    overseas. Thus, the Court reversed the defendant's money laundering
    conviction.

    The subcommittee mark-up amendments reject this "criminal proceeds --
    last out" rule and provides that when a defendant transfers funds from
    a bank account containing commingled funds, the presumption is that
    transfer involves the illegally obtained money.

    -- Foreign Bank and Business Records. To recover laundered funds, the
    government often needs to obtain access to foreign business and bank
    records and admit them into evidence. Under present law, access to
    foreign records is limited, particularly in "bank secrecy"
    jurisdictions, and there is no provision for the admission of foreign
    business records into evidence in federal court. Sections 5 and 11 of
    H.R. 3745 address both problems, respectively. The former provision
    forces persons challenging civil or criminal forfeiture actions to
    release relevant bank records, notwithstanding the bank secrecy laws
    of the country where the laundered funds are located. The latter
    provision provides a mechanism for admitting foreign business records
    into evidence.

    -- Money Laundered Through a Foreign Bank. Under certain
    circumstances, the present money laundering laws do not apply to money
    laundered through a foreign bank. Section 7 of H.R. 3745 addresses
    this problem with a technical correction to the definition of a
    "financial institution."

    -- Subpoenas for Bank Records. As the government proceeds in a
    criminal investigation, typically we find that some of the bank
    accounts to which the laundered funds were sent have been closed. To
    determine what happened to the money, the government will need to
    subpoena bank records. Under present law, there is no mechanism for
    subpoenaing bank records in the course of a civil forfeiture
    investigation; under 18 U.S.C. no. 986, records can be subpoenaed only
    after a complaint is filed. Section 10 of H.R. 3745 solves this
    problem by authorizing the issuance of bank subpoenas before a
    complaint is filed so that the evidence needed to draft the complaint
    can be gathered.

    b. International Crime Control Act of 1998 (ICCA)

    The Administration has also sent Congress a wide-ranging proposal
    dealing with other aspects of global criminal activity called the
    International Crime Control Act of 1998 (ICCA). The ICCA would
    substantially improve the ability of U.S. law enforcement agencies to
    investigate and prosecute international criminals and, in particular,
    to seize and forfeit their assets. Many of the provisions of the Money
    Laundering Act discussed above are included in the ICCA.

    For example, provisions of the bill would expand the scope of money
    laundering "predicate crimes" to include certain violent crimes,
    international terrorism, and public corruption against foreign
    governments; allow for the immediate seizure in the United States of
    bank accounts of drug traffickers and money launderers who are
    arrested abroad; and create a long-arm statute giving U.S. authorities
    jurisdiction over foreign banks who launder money and who maintain a
    bank account in the United States. The bill contains a provision that
    appears in H.R. 4005 clarifying the law applying criminal penalties to
    violations of Geographic Targeting Orders issued under the BSA.

    These and the other provisions of the ICCA would give U.S. law
    enforcement important new tools to fight international criminals and
    to reduce the impact of their activities on Americans.

    c. Other Legislation.

    One last Administration proposal that is not included in any of the
    pending money laundering bills concerns the pre-trial restraint of
    substitute assets. A Ninth Circuit rule bars the restraint of such
    assets in criminal cases [footnote 6]. Other circuits permit the
    issuance of such restraining orders to ensure that the property
    subject to forfeiture as substitute assets will be available at the
    end of the trial [footnote 7]. The question is one of statutory
    interpretation, and is vitally important in money laundering cases
    because the assets directly involved in the criminal violation are
    seldom identifiable by the time of trial due to the nature of the
    offense. Section 46 of H.R. 1965, another House bill, addresses this
    problem by authorizing the pre-trial restraint of substitute assets in
    criminal cases. We request that such a provision be included in any
    money laundering legislation considered this year.

    Conclusion

    I would like to conclude by expressing the appreciation of the
    Department of Justice for the firm support that the Chairman and this
    Committee have demonstrated for our anti-money laundering and asset
    forfeiture activities. Stemming the level of drug proceeds money
    laundering in this country and abroad remains a top priority for the
    Administration and the Department. I will gladly try to respond to any
    questions you may have at this time.

    FOOTNOTES:

    (1) Both U. S. and Colombian law enforcement believe that billions of
    dollars worth of drug proceeds generated in the United States are
    laundered through the Colombian black market peso exchange in Bogota
    and elsewhere in Colombia, and these narcodollars supply the funds for
    the movement of billions of dollars worth of smuggled goods such as
    cigarettes, alcohol products and electronic goods into Colombia. Thus,
    attacking smuggling of consumer and other goods into Colombia
    indirectly attacks the system by which narcotraffickers are being paid
    for their product.

    (2) There is one minor point with respect to the transfer of Section
    6050I to Title 31. The bill would codify the new provision as 31
    U.S.C. no.5313A. Simply to avoid confusion no.no. 5313(a) and 5313A,
    it might be preferable to give the new statute another designation.

    (3) See United States v. Funds Seized From Account Number 20548408 at
    Baybank, N.A., 1995 WL 381659 (D. Mass. 1995) (wealthy Colombian who
    purchased 182 dollar-denominated money orders totaling $100,000 was
    innocent owner; he had no duty to inquire as to source of the money);
    United States v. Real Property 874 Gartel Drive, 79 F.3d 918 (9th Cir.
    1996) (in contrast to other innocent owner statutes, claimant in a
    money laundering case governed by no. 981(a)(2) can prevail simply by
    showing lack of knowledge; there is no requirement that claimant take
    all reasonable steps to avoid acquiring criminal proceeds); United
    States v. $705,270.00 in U.S. Currency, 820 F. Supp. 1398, 1402 (S.D.
    Fla. 1993) (because no. 981(a)(2) does not contain a consent prong,
    the "all reasonable steps" test does not apply).

    (4) See e.g. United States v. One Parcel of Real Estate (1012
    Germantown Road), 963 F.2d 1496 (11th Cir. 1992) (in drug cases,
    innocent owner defense requires proof that claimant "took all
    reasonable steps to prevent illegal use of his property"); United
    States v. Property Identified as 1813 15th Street, N.W., 956 F. Supp.
    1029 (D.D.C. 1997) (taking "some" steps to bar drug dealers from
    property not sufficient; landlady must take all reasonable steps, such
    as evicting tenants convicted of drug offenses); United States v.
    5.382 Acres, 871 F. Supp. 880 (W.D. Va. 1994) ("Unless an owner with
    knowledge can prove every action, reasonable under the circumstances,
    was taken to curtail drug-related activity, consent is inferred and
    the property is subject to forfeiture").

    (5) See United States v. Kramer, 73 F.3d 1067 (11th Cir. 1996)
    ("transfer" under no. 1956(a)(2) is not a continuing offense; each
    transfer is a separate offense).

    (6) United States v. Ripinsky, 20 F.3d 359 (9th Cir. 1994).

    (7) In Re Billman, 915 F.2d 916 (4th Cir. 1990).

    (end text)