Treasury taps prosecutor for financial crime unit

WASHINGTON Tue Aug 21, 2012 4:32am IST

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WASHINGTON (Reuters) - The U.S. Treasury has hired one of the Justice Department's top prosecutors to lead its anti-money laundering and counterterror finance unit, raising the department's profile and suggesting it will take a more aggressive approach to rooting out illicit activity from U.S. markets.

Jennifer Shasky Calvery, chief of the Justice Department's asset forfeiture and money laundering section, will start directing the Treasury's Financial Crimes Enforcement Network in September, the Treasury said on Monday.

The bureau, also known as FinCEN, was established in 1990 to help authorities establish money trails and produce evidence to recover assets. The 300-person unit analyzes information submitted by financial institutions on suspicious activity and writes rules to fight money laundering and terror financing.

"It suggests a very strong enforcement bias for FinCEN," said Ann Jaedicke, a former Office of the Comptroller of the Currency regulator who is now a managing director at the Promontory Financial Group.

Under Shasky Calvery's leadership, the Justice Department secured the forfeiture of nearly $1 billion from Barclays Bank and other financial institutions, as well as the forfeiture of some $3 million in assets from two former leaders of different oil-producing states in Nigeria.

FinCen's leader, James Freis, was dismissed in May for reasons that remain unclear. However, he will remain as director until Shasky Calvery replaces him next month.

Shasky Calvery's appointment comes as the Treasury, the Justice Department and the Federal Reserve continue to investigate British bank Standard Chartered Plc for Iran-related sanctions violations.

Her unit is currently leading the Standard Chartered probe at the Justice Department. The bank has already agreed to pay $340 million to New York's bank regulator over its Iran transactions.

"Treasury is bringing her on board to ensure the effective use of Treasury regulations and data to enforce aggressively the anti-money laundering laws and system, and reform the way FinCEN does business," said Juan Zarate, a top counterterrorism aide to President George W. Bush.

Shasky Calvery is the first prosecutor to lead FinCEN and banking sources said this suggests that the Treasury plans to toughen its enforcement of anti-money laundering laws and regulations.

Several major international banks have been publicly accused of not doing enough to combat money laundering and terrorist financing.

The Senate Permanent Subcommittee on Investigations last month held a hearing at which it blasted HSBC for purported anti-money laundering failures.

As the head of the Justice Department's asset forfeiture section, Shasky Calvery has been working with the Treasury on anti-money laundering issues for at least two years.

Treasury Undersecretary David Cohen said in a statement that Shasky Calvery's strong working relationships with law enforcement and other federal authorities will be "enormous assets" for the Treasury.

Jaikumar Ramaswamy, deputy of the Justice Department's money laundering unit, will serve as the acting chief when Shasky Calvery leaves.

(Reporting by Rachelle Younglai and Brett Wolf; Editing by Neil Stempleman and Steve Orlofsky)