When Bank of America alerted financial regulators in 2020 to potentially suspicious payments from Leon Black, the billionaire investor, to Jeffrey Epstein, the disgraced financier, the bank was following a routine practice.
The bank filed two “suspicious activity reports,” or SARs, which are meant to alert law enforcement to potential criminal activities like money laundering, terrorism financing or sex trafficking. One was filed in February 2020 and the other eight months later, according to a congressional memorandum reviewed by The New York Times.
SARs are expected to be filed within 60 days of a bank spotting a questionable transaction.
But the warnings in this case, according to the congressional memo, were not filed until several years after the payments, totaling $170 million, had been made. By the time of the first filing, Mr. Epstein had already been dead for six months, after taking his own life in a Manhattan jail following his arrest on federal sex trafficking charges.
The delayed filings have led congressional investigators to question if Bank of America violated federal laws against money laundering. Also of concern to investigators is that the bank apparently processed the payments “without asking for information as to the nature of the transactions,” the memo said. The bank told regulators in its initial filing that the wire transfers had “no apparent economic, business or lawful purpose,” according to the memo.
The details in the congressional memo also illustrate a problem with the SARs system. Each year banks file millions of these confidential reports with regulators, but it is not uncommon for banks to file them long after the transactions have taken place. Banks may not act because they’re unaware of a reason to dig deeper into a transaction, or they may not want to cause trouble for a wealthy customer, money laundering experts say.
The memo, prepared by staff working for Senator Ron Wyden, the Oregon Democrat and chair of the Senate Finance Committee, recommended that Mr. Wyden ask the Treasury Department’s Financial Crimes Enforcement Network to investigate Bank of America’s conduct. The finance committee has been conducting its own investigation into the large payments from Mr. Black to Mr. Epstein for nearly two years.
A spokesman for Mr. Wyden said he was still considering the recommendations, but was likely to follow through on them.
