Congressional Quarterly

HOMELAND SECURITY – INDUSTRY & CONTRACTING

DHS to Award Contract for Fraud-Detecting Software

March 28, 2005 – 8:40 p.m.

By Zack Phillips, CQ Staff

As part of a continuing effort to crack down on money laundering, the Department of Homeland Security (DHS) intends to award another contract to a California firm for its data-mining software, according to procurement documents.

In an online posting last week, the department’s Bureau of Immigration and Customs Enforcement (ICE) announced plans to issue a fixed-price contract to Data Mining International of Los Gatos, Calif., for its LEADMiner software and consulting services. The contract amount was not disclosed by ICE and company officials.

The LEADMiner software looks for patterns of fraud in movement of trade and money, said Marc Epstein, the company’s CEO.

The contract is part of the Trade Transparency Unit (TTU) — an initiative between ICE, the Treasury Department and the State Department to work with other countries on detecting and deterring money laundering.

The United States and foreign governments have systems in place to detect money laundering, widely seen as a leading funding mechanism for terrorism. Modern money-laundering operations attempting to evade those systems all involve international trade — currency exchange, for example — according to a State Department report issued earlier this month.

The best way to investigate such efforts is to install systems that can monitor trade data from the United States and other countries, the report said.

Money laundering cost the United States $7 billion in 2003, according to an Institute for International Economics report released in December.

The software will be put on a server that can be accessed by users in Panama, Paraguay, Brazil, Aruba, the Philippines and other countries.

It is the only known product that provides access to and knowledge of more than 30 existing database types, the ICE announcement said.

Last July DMI won a nearly $500,000 contract from DHS’ Customs and Border Protection agency.