DEA Congressional Testimony

Statement of
Donald C. Semesky, Jr.
Chief, Office of Financial Operations
Drug Enforcement Administration

Before the

Subcommittee on Criminal Justice, Drug Policy and Human Resources

May 11, 2004

“Terrorist Financing and Money Laundering Investigations:
Who Investigates and How Effective are They?”

Chairman Souder, and distinguished members of the Subcommittee, it is a pleasure to testify before you today on the importance of cooperation and coordination between those agencies entrusted with the investigation and enforcement of the money laundering and terrorist financing laws of the United States.

As the nation’s single-mission drug enforcement agency, the Drug Enforcement Administration’s anti-money laundering mission is directed solely at funds derived from the trafficking of illegal narcotics.

Under Administrator Karen P. Tandy’s leadership, significant strides have been made in DEA’s financial enforcement program. Structurally, the Office of Financial Operations has been formally established at DEA headquarters. Each DEA domestic field division has formed one or more Financial Investigative Teams or FIT Teams. FIT Teams are also being established in DEA country offices in Colombia, Mexico and Thailand.

The cultural mindset is also changing as evidenced by DEA’s enthusiastic pursuit of specialized money laundering training, eager participation in multi-agency financial initiatives, and most importantly, a renewed focus on the money in all of its domestic and international drug investigations.

DEA recognizes that the estimated $65 billion per year drug industry in the United States is a national tragedy that requires the dedicated resources of many federal, state and local agencies to combat. DEA believes that the best way to combat this scourge is through interagency cooperation and sharing of intelligence.

I would like to share with the subcommittee some of the ways that DEA has put this into action on the drug money laundering front.

On the national level DEA is participating in the multi-agency OCDETF Drug Fusion Center. The Fusion Center will have a financial intelligence function known as the Narcotics Financing Strategy Center.

In 1999, DEA created a financial group at the Special Operations Division, or SOD, to coordinate high level, money laundering, wire tap investigations. To encourage participation, ICE was given the lead and placed an Assistant Special Agent-in-Charge at SOD to run the section, which includes agents from DEA, ICE, IRS-CI, and the FBI.

Financial Operations is working toward implementation of several national money laundering initiatives that involve joint partnership with one or more of our federal law enforcement partners. Two of these initiatives involve the combining of separate, ongoing bulk cash and wire remitter initiatives into joint agency initiatives aimed at the integration and analysis of financial intelligence information.

Financial Operations has also established an interagency working group made up of both federal law enforcement and regulatory agencies to identify the major drug money laundering threats and form a consensus on what criminal and regulatory measures would form the best combination for addressing these threats.

Financial Operations has also taken over liaison responsibility with Treasury’s Office of Foreign Assets Control, and will be assisting in compiling and vetting intelligence information on individuals and related entities nominated for inclusion on OFAC’s Drug Kingpin and Specially Designated Narcotics Traffickers Programs.

Under DEA’s Terrorism Information Sharing Program, all DEA entities must identify and report investigations that have a nexus or potential nexus to extremist and terrorist organizations to an established SOD mechanism to ensure that all terrorist-related information is immediately shared with the appropriate agencies.

Seventeen of DEA’s twenty-one domestic field division’s FIT Teams have participation of one or more federal law enforcement agencies that also have money laundering jurisdiction. The FIT Teams have also been tasked to participate in all High Intensity Financial Crime Area Task Forces and Suspicious Activity Report Review Teams in their areas of responsibility.

DEA currently has 80 offices in 56 countries around the world. These offices work closely with their host nation counterparts. DEA is already working closely with its foreign law enforcement counterparts on many significant drug money laundering investigations, most in support of DEA domestic field division cases, and, at times other U.S. agencies’ investigations as well.

Conclusion

Drug trafficking organizations attack the soul and fabric of America in pursuit of one thing, money. As America’s defenders against these vile organizations, it is incumbent upon us in the Drug Enforcement Administration to attack these groups on all fronts. There is no more important battle in this effort than the attack against the proceeds that fuel this illicit industry and provides the motive to those who prey upon our society. DEA is committed to working with its law enforcement counterparts to fight against drug money laundering.

Mr. Chairman, thank you for the opportunity to testify here today and I will be happy to answer any questions you may have.