July 24, 2017
Robert S. Mueller III
Special Counsel to the U.S. Department of Justice
The Honorable Richard Burr, Chairman
The Honorable Mark Warner, Vice Chairman
U.S. Senate Select Committee on Intelligence
Dear Special Counsel Mueller and Senators Burr and Warner:
In 2000, as the Senior Democrat on the Senate Permanent Subcommittee on
Investigations (PSI), I requested that the then-named General Accounting Office (GAO),
now Government Accountability Office, examine how foreign individuals and entities
may be able to exploit corporate formation and banking practices in the U.S. to engage in
money laundering through correspondent banking accounts. The GAO conducted a
review and issued its report, “Suspicious Banking Activities: Possible Money
Laundering by U.S. Corporations Formed for Russian Entities” dated October 2000.
The report detailed how a Delaware company owned by Irakly Kaveladze established
corporations and bank accounts on behalf of Russian individuals and businesses with
Citibank and Commercial Bank of San Francisco. A copy of that report is available at
http://www.gao.gov/assets/240/230932.pdf.
I issued a press release at the time that provided some context to the report. A
copy of that press release is enclosed, below.
I also released at the time a copy of Citigroup’s letter to the GAO, explaining its
relationship with Mr. Kaveladze and the actions it took in response to the weaknesses in
its due diligence and compliance programs that were identified in the GAO’s and its own
internal investigations. A copy of that letter is attached to this email.
In addition, as part of our investigation, we subpoenaed the wire transfer records
of the bank accounts established by Mr. Kaveladze. Those wire transfers are now in the
PSI archives. I want to make you aware of this in case you wish to have access to them,
in which case you would need to contact PSI directly. There may be other materials in
the PSI archives involving this 2000 investigation that you may also find relevant.
Please let me know if I can be of any further help.
Sincerely,
Carl Levin
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Enclosures

 Statement of Former Senator Carl Levin on Irakly Kaveladze
July 18, 2017

In 2000, as Senior Democrat on the Permanent Subcommittee on
Investigations, I was looking into how foreign persons established US
corporations with hidden ownership as a way to launder money through U.S.
banks. Many states in the U.S., Delaware being a popular one, allow individuals
to set up corporations without revealing the true owner. This allows individuals to
set up shell companies -- companies that can function as a vehicle through which
they can anonymously pass money and which can readily be used to launder illgotten gains.
I asked GAO to review shell corporations and how their bank accounts are
set up. GAO came across the numerous corporations and bank accounts
established by Irakly Kaveladze on behalf of people in Russia. As GAO reported,
Kaveladze established some 2000 U.S. corporations and bank accounts for a
number of them. The owners of those accounts then moved some $1.4 billion
through those accounts. Kaveladze claimed he did all this without knowing for
whom he was doing it. Based on the example of Kaveladze, who was in a
sense the poster child of this practice, and other examples we uncovered over
the years, we've been trying for decades to end the hidden ownership of
American corporations. This has been a bipartisan effort, and there continues to
be proposed legislation in Congress to do just that with the very strong support of
the law enforcement community and the banks.
Kaveladze's conduct also helped us reinvigorate the requirement that
banks know the true owner of their accounts, a policy that hadn’t been enforced
over the years. It has recently been required by regulation.

For Further Information Please Contact: Linda Gustitus 202-557-8867