Lanny Breuer, the Justice Department’s Criminal Division chief, advocated for stricter regulation of financial institutions to help bolster the government’s ability to catch money launderers, during a public hearing at the Treasury Department on Tuesday.
In an effort to root out illegal shell company activity, a proposed new rule on customer due diligence for financial institutions would require those institutions to collect beneficial ownership information. Breuer said that if financial institutions had to collect beneficial ownership information, it “would go a long way toward helping us fight money laundering.”
“Indeed, financial institutions are often law enforcement’s first line of defense,” Breuer said, according to prepared remarks. “Protecting the financial system requires close collaboration between law enforcement and the private sector, and the proposed customer due diligence rulemaking would also require working closely together.”
Breuer pointed to the Criminal Division’s Kleptocracy Asset Recovery Initiative as a lens through which he has seen the “extensive use of shell companies.”
Last month, the kleptocracy initiative saw its first forfeiture judgment in a case involving shell companies in Nigeria. More recently, Breuer said, the department restrained more than $3 million in funds related to the former governor in Delta State, Nigeria. James Onanefe Ibori was sentenced in April to 13 years in prison in the U.K. courts. He was found guilty of money laundering and conspiracy to defraud the Nigerian people.
