Senators Say Federal Reserve May Have Failed to Block Money Flows to Iran
Senate Banking Committee ranking member Tim Scott, R-S.C., and Sen. Mike Rounds, R-S.D., asked the Federal Reserve this week to explain how it reportedly failed to prevent money from flowing to U.S.-sanctioned entities, including Iran’s Islamic Revolutionary Guard Corps.
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In a letter to John Williams, president and CEO of the Federal Reserve Bank of New York, and Jerome Powell, who chairs the Federal Reserve System's Board of Governors, the senators said that for over two decades, the New York Fed apparently processed wire transfers and transactions originating from private banks in Iraq to various banks across the globe without implementing basic anti-money laundering controls that would have revealed who the intended recipients were. As a result, billions of dollars may have ended up in the hands of Iran and its terrorist proxies, the letter says, citing a Wall Street Journal report.
"If accurate, this would represent one of the single greatest failures of the U.S. financial regulatory regime," the senators wrote.
The New York Fed said through a spokesperson that it received the letter and plans to respond to the senators. The Federal Reserve Board had no immediate comment.