Banks may be topic of cash-laundering inquiry

They may have failed to monitor transactions, officials say.

NEW YORK — Federal and state authorities are investigating a handful of major U.S. banks on the possibility they failed to monitor cash transactions in and out of their branches, a lapse that may have enabled drug dealers and terrorists to launder tainted money, according to officials who spoke on the condition of anonymity.

These officials say they are beginning one of the most ag- gressive crackdowns on moneylaundering in decades, intended to send a signal to the nation’s biggest banks that weak compliance is unacceptable.

Regulators, led by the Office of the Comptroller of the Currency, are close to taking action against JPMorgan Chase for insufficient safeguards, the officials said. The agency is also scrutinizing several other Wall Street giants, including Bank of America.

JPMorgan is in the spotlight partly because federal authorities accused the bank last year of transferring money in violation of U.S. sanctions against Cuba and Iran.

The surge in investigations, compliance experts say, is com- ing now because authorities were previously inundated with problems stemming from the 2008 financial turmoil.

“These issues may have been put on hold during the financial crisis, and now regulators can go back to focus on moneylaundering and other compliance problems,” said Alma M. Angotti, a director at Navigant, a consulting firm that advises banks on complying with antimoney-laundering rules.

Until now, investigators have primarily focused on financial transactions at European banks. The authorities accused several foreign banks of flouting U.S. law by transferring billions of dollars on behalf of sanctioned nations.

As the investigation shifts to U.S. shores, the Justice Department and the Manhattan district attorney’s office are moving beyond those violations to focus on money laundering, in which criminals around the globe try to hide illicit funds in U.S. bank accounts.

Despite shortcomings, banks spend millions of dollars a year to guard against money laundering. Compliance experts argue that violations are typically unintentional and often harmless because they aren’t always exploited by criminals. Banks also say that they are not the ones with lapses, citing check cashers and money transfer companies.

Still, prosecutors and regulators have spotted gulfs in the way financial institutions oversee suspicious transfers, the federal and state officials say.

Under the Bank Secrecy Act, financial institutions like banks and check cashers must report any cash transaction of more than $10,000 and bring any dubious activity regulators’ attention. The law also requires banks to have controls in place to detect any criminal activity.

The comptroller’s office, JPMorgan and Bank of America declined to comment.