Ruling finds Patriot Act permits U.S. authorities to subpoena foreign bank records even if barred by home country’s laws.
By Spencer S. Hsu Spencer S. Hsu Investigative reporter Email Bio Follow May 1 at 8:48 PM A federal judge in Washington has ordered three Chinese banks partly or wholly owned by the Beijing government to turn over documents in a U.S. criminal investigation into how a Hong Kong corporation allegedly helped North Korea’s regime evade sanctions, new court filings show.
Records capturing “cash deposits . . . intrabank transfers and foreign currency deposits” that can be used to launder money through the United States “are precisely the type that the statute permits the government to subpoena,” wrote Howell, who helped draft the Patriot Act as Senate Judiciary Committee counsel before her appointment as a federal judge in 2010.It is unclear whether the banks could face any U.S.
Howell ordered the three banks to comply with two grand jury subpoenas and one administrative subpoena from the Justice Department for documents related to a national security investigation. The opinion said the investigation involves a now-defunct front company in Hong Kong that allegedly helped finance North Korea’s nuclear program, despite international sanctions, by laundering more than $100 million through the United States between 2012 and 2015.
In the civil forfeiture case brought by the Justice Department, a federal judge last August entered a default judgment against Mingzheng accounts in the United States that authorities alleged worked with three of China’s largest financial institutions: the state-owned Bank of Communications, China Merchants Bank and Shanghai Pudong Development Bank.
The court ruling said the three banks failed to comply with subpoenas issued in December 2017 and that the Justice Department moved to compel compliance in November 2018. After briefings through the winter, Howell held a closed-door hearing March 5 before issuing her ruling 13 days later.In her opinion, Howell cited Justice Department statistics that show Chinese authorities have responded to only 15 of 50 U.S.
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