Mr. BANDSTRA. In my opinion, yes; it would facilitate it.

Chairman ST GERMAIN. Why didn't anyone from the U.S. Attorney's Office ask that question of the banks?

Mr. BANDSTRA. I don't know that it wasn't asked. I just don't know that it was.

Chairman ST GERMAIN. Could you find out for us?

Mr. BANDSTRA. I certainly can.

Chairman ST GERMAIN. Could you for the record submit a statement as to what the replies were from the banks that increased the denominations of their money orders?

Mr. BANDSTRA. I would be pleased to, Mr. Chairman.

Chairman ST GERMAIN. Could you also ask what the float has been in these banks, even though they are innocent, having profited from the floats?

Mr. BANDSTRA. I will do my best to find out the answers.

[In response to the request of Chairman St Germain, the information was submitted for the record by Mr. Bandstra and can be found in the appendix.]

Chairman ST GERMAIN. Thank you. Mr. Parris.

Mr. PARRIS. Mr. Friedberg, have you been a Florida resident for some time?

Mr. FRIEDBERG. Since 1972, sir.

Mr. PARRIS. Where did you live before that?

Mr. FRIEDBERG. New York City.

Mr. PARRIS. Did you retire?

Mr. FRIEDBERG. No, sir, I moved to Florida; worked down there. Mr. PARRIS. What did you do?

Mr. FRIEDBERG. I was in property management.

Mr. PARRIS. You are now unemployed?

Mr. FRIEDBERG. Yes, sir.

Mr. PARRIS. I understand you had some kind of injury. Are you off workmen's compensation?

Mr. FRIEDBERG. Yes, sir.

Mr. PARRIS. Are you a person of some substantial assets?

Mr. FRIEDBERG. Because I had to sell my home-I did own a condominium in Florida, which I sold. I did have some savings which I live on. It is very difficult to account for the 2 years of my time that I was involved with the Government, year and a half with the Government. During the past year, with all the pre-trials and trials and having to be in various places, it is very difficult to get a permanent position.

Mr. PARRIS. You had expenses of your own in all of that; did you not?

Mr. FRIEDBERG. I paid all expenses. I have received nothing from the Government for the past year.

Mr. PARRIS. You paid all of that?

Mr. FRIEDBERG. The last thing the Government did was transfer me to another State, which I now live in. I am not under any witness protection program, which is my choice.

Mr. PARRIS. Where do you get money from now to pay rent and buy groceries?

Mr. FRIEDBERG. I have gone through a very substantial part of my savings.

Mr. PARRIS. You flew up here for this hearing, I gather.

Mr. FRIEDBERG. Yes, sir.

Mr. PARRIS. Did you buy your ticket?

Mr. FRIEDBERG. I put it on my credit card.

Mr. PARRIS. That is commendable, Mr. Friedberg.

Mr. FRIEDBERG. I intend to be reimbursed for it, sir.

Chairman ST GERMAIN. The Chairman would state that the committee is going to reimburse Mr. Friedberg, as we do for other wit

nesses.

Mr. PARRIS. That is very gracious of us, Mr. Chairman. [Laughter.]

Chairman ST GERMAIN. We even send Congressmen on trips and the committee pays for it.

Mr. PARRIS. Í have heard of some of those. I have never been on one myself. I understand that is the case.

Chairman ST GERMAIN. This chairman has been on three in 26

years.

Mr. PARRIS. Let me ask you a serious question. I do not mean to invade your privacy, Mr. Friedberg. You are to be commended for what you have done in the interest of justice and the prosecution of criminal activity, as the chairman and others have alluded to. I was intrigued by the fact that it is impossible to believe that people would not pursue where you came from with this cash. I just find that incredible.

Has any institution or employee ever turned you down when you walked in and said, here's my usual $9,000?

Mr. FRIEDBERG. Never.

Mr. PARRIS. Thank you very much, Mr. Chairman.

Chairman ST GERMAIN. Mr. Bandstra, let me ask you a question. You are a teller in a bank. Mr. Friedberg comes in four or five times a month with $9,000 that he converts to cashier's checks or money orders. Would that not ring a bell with you?

Mr. BANDSTRA. In Miami, I don't think it would ring a bell. Not only because Miami is such a drug center in the United States, but there is, as I believe Mr. McKinney was saying, a great deal of the business done in Miami is done with cash. It is not at all unusual particularly to have foreign individuals in the United States with large amounts of cash. They have come into Miami from other places. They have come often times with their life savings. For some reason, they have a lot of cash.

Chairman ST GERMAIN. Does Mr. Friedberg look and sound foreign to you?

Mr. BANDSTRA. No; he would not.

Chairman ST GERMAIN. I repeat my question. Mr. Friedberg is coming in three to five times a month and converting $9,000. No. 1, you look at him, you look at his watch, and you look at his clothes. Does he look like a man that has hundreds of thousands of dollars? What American operates with that kind of cash?

Mr. BANDSTRA. Other than persons self-employed on a small basis, and even then, it would be unusual.

Chairman ST GERMAIN. If they are self-employed on a small basis, there are exceptions, granted, by the regulatory agencies, and by IRS. You have a car wash. You have a race track. You have a cleaning business where most of it is done in cash. That's one thing.

Why is Miami so different? Why would you say Miami should be so different that there should be so much cash, legal cash?

Here is Mr. Friedberg, in a regular suit, with nothing big on the watch. He doesn't look like a multimillionaire to me. I don't think he looks like that to you. I repeat my question. He comes in four or five times a month with $9,000, month after month. You would not be suspicious at all?

Mr. BANDSTRA. No, I believe I would, Mr. Chairman. I did not mean to convey I wouldn't be. I would be suspicious.

Chairman ST GERMAIN. Very sincerely, the aggregation problem is one that we are facing here in addition to the attitude that you had when you said to me, "I'm concerned about these banks." We had the Bank of Boston hearing, where this woman in the south end of Boston was receiving these gunny sacks full of money from the same people, who by the way, had been written up in the papers, the Anguilo's. Have you heard about them? They have been convicted.

For years and years, everybody in that district of Boston knew what type of characters these were and never did the lady who managed that branch ever call anybody in the main office and say, "I have all this cash coming in." As a matter of fact, they had an exception, because they said they were collecting rents.

I have to feel that these institutions have a little more responsibility than to just assume that you have foreigners coming in with all kinds of money and a lot of legitimate businesses. If they are legitimate, they should be registered for an exception.

Mr. Torres.

Mr. TORRES. Thank you, Mr. Chairman. You have been most generous in allowing me time to participate on your subcommittee, of which I am not a member. However, I do serve on the main Banking Committee. As the committee knows and the subcommittee knows, I have introduced legislation, H.R. 4280, which attempts to amend title 31, United States Code, to establish new recordkeeping and reporting requirements, in order to combat money laundering, to act as a deterrent to the kind of situation you are familiar with, Mr. Friedberg.

You will notice that when you ask the car leasing company which was the best neighborhood to do business in, they pointed to Wilshire Boulevard. Mr. Chairman, that is not my district. You know where I am from.

I am concerned that Los Angeles has now reached a peak, perhaps in the country, as being the top city now involved in money laundering, perhaps passing Miami now. This is the reason for this kind of legislation.

In your response to a Member of the subcommittee, when he asked you, what do you think could be done about this, you said you didn't have an idea. I am going to ask a question that maybe you could comment on.

My legislation specifically puts a limit on the amount of money that can be brought in by a person like yourself, under the $10,000 provision. My bill calls for $3,000. That is, anyone coming off the street with $3,000 or more and attempting to launder money, the bank would be required to record this, as well as asking for identification of that person walking in off the street.

In your estimation, is this a possible deterrent to money laundering?

Mr. FRIEDBERG. Anything that makes it more difficult to launder money is a deterrent, sir. I don't think it would stop it. I certainly think it would slow it down. Looking at the commission structure that the banker is willing to pay the launderer, if you are doing it in $3,000 increments or $4,000 to $5,000, they are looking for a day's pay. That's really what the Smurf is looking for. He is just going to have to call on more banks or get up a little earlier in the morning.

I don't know if it will stop it. Anything to deter it, to slow them down, will help.

Mr. TORRES. Thank you. One other question. Perhaps Mr. Bandstra could answer this. You mentioned a number of banks in Miami doing business. What was the bank you indicated? You mentioned Pan American where you had your own account.

Mr. FRIEDBERG. Yes, sir.

Mr. TORRES. Is Capital Bank one of those?

Mr. FRIEDBERG. Capital Bank is one where I had an account; yes, sir.

Mr. TORRES. You laundered money through Capital Bank?
Mr. FRIEDBERG. Yes, sir.

Mr. TORRES. Thank you, Mr. Chairman. I yield back the balance of my time.

Chairman ST GERMAIN. I would direct this to either Mr. Friedberg or Mr. Bandstra. Was Mr. Behar laundering only the money that was coming into him from Alex, his contact in Colombia, or was he handling an overage from other operators similar to him? Mr. FRIEDBERG. Mr. Behar had made additional contacts and yes, he was handling quite a bit of overage. He had developed a good reputation and a good organization. His reputation had opened up some other doors to him.

Chairman ST GERMAIN. Would you have been the first man who began laundering for him or did he have others before you?

Mr. FRIEDBERG. Mr. Behar was doing it, I think, at least a year prior to my joining him.

Chairman ST GERMAIN. Would he do it himself?

Mr. FRIEDBERG. Himself, a partner and his wife.
Chairman ST GERMAIN. Who was the partner?

Mr. FRIEDBERG. Mr. Yuribi.

Chairman ST GERMAIN. He is the fellow who went to California?
Mr. FRIEDBERG. That's correct.

Chairman ST GERMAIN. What was his ethnic background?
Mr. FRIEDBERG. He's Cuban.

Chairman ST GERMAIN. Mr. Wylie.

Mr. WYLIE. Thank you, Mr. Chairman. I think this has been some of the most fascinating testimony I have heard since I have been on this committee. I want to thank you. You have certainly dramatized the problem that we face. Mr. Bandstra, I think your testimony has been most helpful and valuable, too.

It looks like we have the responsibility of trying to come up with some answers to this problem.

I have no questions, Mr. Chairman.
Chairman ST GERMAIN. Mr. Parris.

Mr. PARRIS. Mr. Chairman, I just want to make sure that the record indicates that I did not mean in any way to suggest that the committee should not offset the expenses of Mr. Friedberg.

Chairman ST GERMAIN. I understand that.

Mr. PARRIS. I certainly support your position, Mr. Chairman.
Mr. FRIEDBERG. On behalf of my family, thank you, sir.

Mr. PARRIS. I would just like to offer Mr. Friedberg a job. It is hard to find an honest man these days.

Mr. FRIEDBERG. I will accept.

Mr. PARRIS. Do you have some money you want laundered? I have some shirts.

Mr. FRIEDBERG. We have one institution that I think you will enjoy this, where I can walk in with $50,000 in cash and buy 50,000 dollars' worth of money orders and never worry about a currency transaction report being made. That is the U.S. Post Office. You might want to sit on that for a while. Mrs. Behar made it a practice to buy all her money orders at the Post Office.

Chairman ST GERMAIN. My staff informs me that this is not covered under the Bank Secrecy Act. Is that right, Mr. Bandstra?

Mr. BANDSTRA. That is right, Mr. Chairman. It is not.

Chairman ST GERMAIN. I have spent a lot of time sitting in this chair, Mr. Bandstra. With all due deference, the last thing I would want to be is a judge.

Mr. BANDSTRA. I am sorry. It is force of habit.

Mr. Chairman, if I might make one comment to the committee. In addition to stating perhaps the obvious, and that is that Mr. Friedberg's cooperation has been invaluable to the United States and the convictions that have resulted would not have been possible without his cooperation and without his working as a confidential informant for the United States.

The other comment that I wish to make, no one asked me what I would like to do about money laundering, and perhaps it is improper to state

Chairman ST GERMAIN. Consider yourself asked.

Mr. BANDSTRA. In listening to the comments of Mr. Pickle, I believe that the first two items that he listed and discussed with the committee this morning would be very helpful in correcting a situation under title 31 as it now exists. We as prosecutors with the U.S. Attorney's Office are experiencing various difficulties in various parts of the United States with title 31, two of which I think will be corrected with the-

Chairman ST GERMAIN. Be a little more specific. I want it in the record. Why don't you elaborate for us?

Mr. BANDSTRA. All right. Perhaps I can answer it in the formtake the approach of answering a question asked by Mr. Annunzio when he asked Mr. Friedberg, when you went in and purchased a check for $9,000, that wasn't illegal, was it? Mr. Friedberg said, no. He said, if you were to go in and purchase 50,000 dollars' worth of checks, that wouldn't be illegal either, would it? Mr. Friedberg said, no. The answer to that question varies. The legality of doing that particular kind of behavior varies according to where a person is doing that in the United States.

Chairman ST GERMAIN. Because of different decisions by the appellate courts?