A 1980 regulation designed to curb money laundering apparently crossed the desk of top officers of the Bank of Boston -- including the chairman -- shortly after it was issued, but the regulations still went unheeded. Bank chairman William Brown told a congressional committee Tuesday he and seven other top bank officials had received a federal memo in 1980 outlining the new regulations. He had no explanation for the bank's failure to comply with the regulations until last year.
The First National Bank of Boston, Bank of Boston's prime subsidiary, was fined $500,000 last month when it pleaded guilty to failure to report $1.2 billion in international cash transactions from 1980 to 1984.
C. Todd Conover, comptroller of the currency -- whose agency enforces bank regulations -- also testified before the Senate Permanent Subcommittee on Investigations. Mr. Conover said his agency failed to detect the bank's errors because some bank examiners were unfamiliar with the new rules.
Meanwhile, the US attorney for Massachusetts, William Weld, said he will be investigating other Boston banks for currency violations. Separately, the House Banking Committee postponed hearings on the case.