WASHINGTON—Lawmakers Tom Malinowski (D-NJ) and Sheldon Whitehouse (D-RI) have written to Treasury Secretary Janet Yellen asking her to impose a “war-like footing” in the U.S. Treasury Department to combat money laundering, corruption and kleptocracy.
The letter notes Treasury has the authority to rapidly expand AML obligations, which has been recommended for decades by law enforcement, anti-corruption watchdogs, and the FATF (Financial Action Task Force).
“With beneficial ownership reform on its way, the top policy priority in the fight against dirty money should now become the expansion of AML obligations to cover financial facilitators and professional service providers that can enable corruption.”
The letter notes that more than $13 trillion is reported to be invested in U.S.-based private equity and hedge funds, which are subject to very little ownership or money laundering vetting, Regulation Asia reported.
‘No One Would Be Able to Know’
“In other words, foreign kleptocrats could launder millions into our communities through a hedge fund’s advisors and no one would be able to know,” it says.
The letter urges Yellen to expand AML and suspicious activity reporting obligations to investment advisors, including private equity and hedge fund advisors, and potentially family offices, venture capital firms, and funds with less than $100 million under management, Regulation Asia said.