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CNN Saturday Morning News

Interview With John Carroll

Aired October 20, 2001 - 08:11   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, we've talked a bit about this before. We're going to go a little more in depth now -- one of the ways the authorities are going after terrorists is by following the money trail. John Carroll, who's an expert in the field of money laundering, joins us now to explain how this all works.

Good morning, John.

JOHN CARROLL, CLIFFORD CHANCE ROGERS & WELLS: Good morning, Kyra.

PHILLIPS: Why don't we talk about first using a credit card. It's always a good audit trail, right?

CARROLL: Yes, a credit card leaves a record. It's good to work backwards and see what happened. I don't think it's a particularly good tool to catch someone at the point of contact.

PHILLIPS: How do you get an FBI agent in a place where they can get someone in real time? Is that even possible as they're using this credit card?

CARROLL: I think that you can locate a region where someone is by their past use of a credit card. But to catch someone buying toothpaste at Wal-Mart in real time is just about impossible.

PHILLIPS: Well, once you've identified a suspect how quickly can you act?

CARROLL: It depends on where you are and it depends on where the suspect is.

PHILLIPS: What about in a situation with these terrorist attacks on September 11? There had been talk about the money laundering through the al Qaeda network, through Osama bin Laden, something in that situation? Does that change the rules?

CARROLL: Well, the rules are trying -- people are trying to change the rules now, Kyra. Fundamentally, our money laundering rules are not set up to deal with preventive measures. They're set up to support criminal prosecutions. Essentially, they're set up to look backwards.

PHILLIPS: So internationally is it much tougher to nail down a suspect? Tell me about the black holes.

CARROLL: It's much tougher. There are any number of regions in the world that are set up as financial secrecy havens precisely to conceal the identity of people who are doing business there. As a consequence, it's very difficult to track funds through many regions of the world.

PHILLIPS: How do you go through investigating the money trail of a suspect, say like Osama bin Laden?

CARROLL: Well, I would expect that the FBI has done a very good job of that as far as it goes. Any financial transaction in the States will probably leave a record. That record may lead to other records. But the problem is that ultimately investigators will get to that black hole. They'll get to a back secrecy haven or they'll get to a foreign nation that doesn't share financial information with us.

PHILLIPS: Is it tougher to track down someone when it's smaller sums of money? Because the talk has been thousands versus multi- millions here.

CARROLL: This is an enormous problem. Our money laundering laws were set up to track large sums of money leaving the States, narcotics money. This problem is smaller sums of money coming in to fund U.S. operations. We simply don't have the tools yet to do that.

PHILLIPS: What kind of tools do you need?

CARROLL: Well, our financial institutions frequently deal with people through intermediaries and our rules are set up so that we know who the intermediary is but we don't know who the ultimate payer or sender of money is. We have to make a decision whether we want rules that will allow us to know who is sort of the ultimate sender of funds.

PHILLIPS: I know there's been talk about new legislation to prevent acts like this and we'll continue to follow that.

John Carroll, thank you so much for joining us this morning.

CARROLL: Thank you, Kyra.

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