The Sun shines some light on Cuba money launeering scandel

How I do love Megan Clyne at the New York Sun... she is like a little Cuban American Patriota on the paper. She just moved her offices to Washington DC instead of NY and continues to kick commy ass and show the world the crap that Cuba is producing!! Go Megan!!
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The New York Sun

October 10, 2005

UBS DEALINGS IN IRAN, CUBA TO BE PROBED

By MEGHAN CLYNE, Staff Reporter of the Sun

WASHINGTON, D.C. -The world's largest "wealth management" firm, UBS, will be investigated by Congress for possibly laundering money for two state sponsors of terrorism, Cuba and Iran, lawmakers here told The New York Sun.

The Swiss bank, which operates a large financial services business in America, will be pressed about $3.9 billion deposited in UBS accounts by the Castro regime, according to Rep. Ileana Ros-Lehtinen, a Republican of Florida, who first announced the impending investigation on Friday. Possible improper financial dealings with the Islamic Republic of Iran and Saddam Hussein's Iraq will also be subject to scrutiny, she said.

In 2003, American soldiers liberating Iraq discovered $762 million in American currency stashed in hideouts belonging to Saddam. According to Ms. Ros-Lehtinen, a Federal Reserve Bank probe traced the cash to UBS and other international financial firms. While investigating the Swiss bank's possible business relationship with Saddam's dictatorship, it was discovered that the firm - as part of a program with the Federal Reserve Bank of New York, in which UBS allowed clients to retire old banknotes and replace them with fresh currency - had also conducted transactions with Cuba, Iran, Libya, and Yugoslavia.

The business relationships were a violation of the agreement with the Federal Reserve, which had stipulated as a condition of the program that UBS neither accept cash from nor transfer it to countries against which America maintains sanctions.

Cuba, Iran, and Libya are on the State Department's list of state sponsors of terrorism, and, according to UBS, employees of the bank had filed false accounting reports with the Federal Reserve to conceal the transactions with the prohibited clients. As a result, the Federal Reserve Board and the Swiss Federal Banking Commission sanctioned UBS, which settled the matter by paying a $100 million fine to the Federal Reserve.

To Ms. Ros-Lehtinen, however, the matter is anything but settled. The congresswoman, who is a Cuban-American and a member of the House International Relations Committee, said yesterday that the decision to go forward with the investigation resulted from nearly a year of unfruitful meetings with the UBS officials, including the bank's vice chairman, Phil Gramm, a former Republican senator from Texas.

For several months, Ms. Ros-Lehtinen said, she has pressed representatives of the Swiss bank for details surrounding the $3.9 billion, which, according to press accounts, was deposited by the Castro regime into one official Cuban government account with UBS. The deposits took place over the course of 1,900 transactions between 1996 and 2003.

While officials of the Castro regime have maintained that the deposits involve legitimate revenue derived from Cuba's tourism industry and remittances sent by Cuban-American exiles to their families on the island, Ms. Ros-Lehtinen told The New York Sun yesterday that the amount of the deposits far exceeds Mr. Castro's potential legal revenue in American dollars.

One of the Cuban-American congressional leaders involved in the discussions with UBS, Rep. Lincoln Diaz-Balart, a Republican of Florida, said yesterday in a phone interview with the Sun that money laundering is "one of Castro's main businesses." In addition to funneling cash for drug traffickers, Mr. Diaz-Balart said, Havana's strongman abets Latin-American narco-terrorist organizations, such as the FARC and ELN in Colombia. Corrupt Latin American leaders, too, are clients of Mr. Castro's money-laundering operations, he said.

The mysterious $3.9 billion, Mr. Diaz-Balart added, is "just one tip of the iceberg." He expressed frustration that America's intelligence services had neglected to probe the dictator's money laundering services for terrorists, leaving the UBS investigation to Congress.

Ms. Ros-Lehtinen said that, since UBS's possible money laundering for state sponsors of terrorism posed a threat to American security, it was essential that the bank's alleged connections to Cuba, Iran, and Hussein's Iraq not be left unexplored, quieted by a $100 million fine.

In particular, Ms. Ros-Lehtinen told the Sun, she has consistently pressed UBS for more information about how the potentially illegal business relationships were entered into; whether the bank made any inquiries of the Cuban, Iranian, and Iraqi clients to ensure that the money deposited was obtained legally; and whether the Swiss bank has closed all of its accounts with Cuba and Iran.

On the last question in particular, Ms. Ros-Lehtinen said she has met with reticence from UBS, which, she said, is "really not forthcoming with information."

To get answers, Ms. Ros-Lehtinen said she and Rep. Dana Rohrabacher, a Republican of California, will hold joint hearings on the transactions. Ms. Ros-Lehtinen is chairman of the House Subcommittee on the Middle East and Central Asia, which will probe the possible UBS connections to Iran and Iraq. Mr. Rohrabacher is chairman of the House Subcommittee on Oversight and Investigations, which will investigate the ties to the Castro regime, Ms. Ros-Lehtinen said. Both are part of the House International Relations Committee, and the congresswoman said she hopes to begin the inquiries before the second week of December, when Congress's session ends.

Rep. Sue Kelly, a Republican of New York, also will participate in the investigation, Ms. Ros-Lehtinen said. Ms. Kelly, the chairman of the House Committee on Financial Services's Subcommittee on Oversight and Investigations, has conducted previous UBS inquiries.

Ms. Ros-Lehtinen added that she is also inquiring about the status of a criminal investigation into the UBS matter she believes is being conducted by the Manhattan district attorney, Robert Morgenthau. Calls to Mr. Morgenthau's office and home last night were not returned.

The purpose of the House investigation, Ms. Ros-Lehtinen said, is to "discourage international banks, or any financial institution, from having these kinds of clients - Castro, Saddam Hussein, and their ilk." Moreover, "it will make it harder for the likes of Fidel Castro to funnel money to legitimate institutions" if the international financial-services industry understands that such business relationships will be investigated and that illegal activities will carry consequences, the congresswoman said.

A spokeswoman for UBS, Christine Walton, said yesterday that the bank had not been informed officially of the investigation, and declined to comment on whether UBS had begun any internal probe into the $3.9 billion from Cuba and the possible connections to Iran.

As for the violations of the agreement with the Federal Reserve Bank of New York, Ms. Walton said: "We've already paid a fine for it. If there's a separate line of inquiry from any other government institution, we're unaware of it." Since the bank had not been informed of any investigation, Ms. Walton declined to "speculate," but said it is UBS policy to cooperate with government inquiries.

In testimony before the Senate Finance Committee on July 21, 2004, Mr. Morgenthau said, "The banks need to do a better job. Some oversight failures at the banks may be due to ignorance or simple negligence. But it is difficult to discount the influence of the considerable fees that banks can earn through the international money transmittal business." In an editorial that ran shortly thereafter, the Wall Street Journal urged regulators and prosecutors to get tough on money laundering, which the newspaper said "has been aided and abetted by U.S. banks for years."