of dollars in bundles of cash stashed in a safety deposit box. When the crooks come to take it out of the mid-Atlantic island bank, they may stash it in a briefcase or brown paper bags -- who knows? But they move out of the room in Bank of Butterfield, and walk the few hundred yards down to Bank of Bermuda, where the staff take the bundles of cash, and the money takes one more step in the laundering process.

This is the astonishing scene painted by the Minority Staff of the US Senate Permanent Subcommittee on Investigations report on Correspondent Banking: A Gateway to Money Laundering.

And if you wrote the rest of the tale, no one would believe the far-fetched plot of money laundering which trailed through IRA terrorists, Antigua and Barbuda, to the US, on to Bermuda and finally to "respectable'' banks in the USA.

The plot includes a convicted money launderer at the helm, John Fitzgerald, a go-between, the general manager of a bank, Swiss American Banking Group, a series of mystery payments which may or may not have been instigated by former Bermuda resident and financier Bruce Rappaport, a sum of $7 million still unaccounted for and a Special Branch investigation by Bermuda Police.

Let's not forget the fact that crucial documents in the case were allegedly sucked up by a hurricane in Antigua.

All that topped by an investigation by the US Senate's Minority Staff who has opened up this can of worms for the public to scrutinise.

The final stages of the report were put to the Senate this week and last week, included the revelations about Bank of Bermuda and Bank of Butterfield.

The banks are mentioned in a section damningly called The Fitzgerald Case -- Drugs and Terrorist Money.

The revelations are based on Bermuda Police Special Branch investigations, according to the report (see footnote nine copied on Page 27) .

Bank of Butterfield is only named once, as holding $450,000 cash in a safety deposit box, which was then taken on to Bank of Bermuda where "influence'' was used to have the money deposited in the bank, the report claims.

The Fitzgerald case centres around $7 million laundered by John Fitzgerald through Swiss American Bank (SAB) and Swiss American National Bank (SANB) between 1985 and 1997.

Swiss American Bank Group is said to be owned by Rappaport (but the Wall Street Journal said there is no evidence that Rappaport and his role at the bank are tied to the $7 million money laundering scheme).

The involvement began, according to the report, when Fitzgerald, a money launderer acting on behalf of gangsters and leaders of a drug organisation in Boston, the Murray Brothers, deposited the millions into bank accounts that had been established at SAB and SANB.

The report goes on to say in a footnote: "It has been reported to the Subcommittee staff that the Murray Brothers and Fitzgerald were also involved in the sale of weapons to IRA terrorists and that some, or even all of the funds deposited into the accounts at SAB and SANB were associated with the IRA.'' Four accounts at SAB were in the name bearer share IBCs -- corporations owned by individuals who controlled the certificates of shares of the corporations.

Two of the accounts were in the name of Guardian Bank -- a bank licensed in Anguilla in 1986 -- and held most of the money laundered deposited by Fitzgerald and other members of the drug organisation, the report claims.

General manager of Swiss American Banking Group, Peter Herrington, helped Fitzgerald in setting up the accounts, the report claims.

Herrington also served as director of all the IBCs and Guardian Bank and performed the transactions in the SAB and SANB accounts.

By mid-1987, the $7 million Fitzgerald accounts in the name of Guardian Bank made up a third of all accounts at Swiss American Bank.

"Rappaport, concerned that an unknown party controlled one third of Swiss American Banking Group's deposits, asked Herrington to identify the beneficial owner(s) of Guardian Bank. When Herrington refused to do so, he was immediately suspended and dismissed from his position one month later (June 1987). Between the time of Herrington's suspension and his termination, he notified Fitzgerald of Rappaport's concerns,'' the report claims.

Herrington resigned as director of Guardian and the IBCs. The report states: "When efforts to resolve the matter failed, the attorney who claimed to be the new director of Guardian Bank filed a lawsuit in Antigua and Barbuda requesting the court to recognise him as director of Guardian.'' This would authorise him to withdraw the cash. At the same time Swiss American Banking Group officials began investigating the accounts opened by Herrington and hired and auditor to review the accounts, which identified "a number of irregularities''. The group also learnt that the money "may be tied to drug and arms trafficking''. The funds were frozen.

In May, 1993 Fitzgerald was indicted for racketeering, conspiracy and money laundering and pleaded guilty to the charges in August that year.

On the trail of dirty money As part of the deal he forfeited all of the proceeds of the illicit activities deposited in the SAB and SANB accounts. Negotiations with Antiguan authorities to freeze funds and return them lasted two years, the report states.

In November, 1995 counsel for the Antiguan government informed the US authorities that a year earlier, about $5 million was transferred from Swiss American Banking Group to the Antiguan government.

The Antiguan counsel said it had spent the funds to pay "pending debts'' and the money was no longer available.

The report said the US government was later informed that the remaining $2 million had been retained by the bank.

The report states: "It is unclear whether the funds were retained as a set off against outstanding Antiguan loans or whether they were retained to cover expenses incurred by the bank.'' And then Bank of Bermuda is back in the report: "The Minority Staff revived a copy of a letter written in early 2000 that alleged that $880,000 of the Fitzgerald funds were `transferred between January 22-25, 1995, to Inter Continental Bulk Traders, SA, account no 4763751 at Bank of Bermuda, Hamilton'. The Minority Staff confirmed that the account does exist at Bank of Bermuda and that a transfer of $880,000 did occur in the January 22-25, 1995 time period.

"It has been reported to the Minority Staff that those funds were paid upon a resolution of the Swiss American Banking Group board as payment against a series of invoices submitted by a number of people who, at the request of Rappaport, had engages in a review of SAB.'' The report went on to say that one explanation offered to them was that Inter Continental Bulk Traders is an account controlled by Rappaport and the funds were transferred to that account rather than paying directly those who had submitted invoices.

The report also alleges that Rappaport may have engaged the services of these people to provide an independent review of the accounts at Swiss American Banking Group.

But it says the ownership of Inter Continental Bulk is still not confirmed, and a question mark remains over why payments would be made through this account and not directly to those who performed those services.

"Moreover it has been reported to the Minority Staff that the funds were transferred out of the account at the Bank of Bermuda in two tranches, which seems inconsistent with the contention that payments were made to a number of individuals.

"Without confirmation from the Bank of Bermuda on the ownership of the account and what happened to the funds in question, the fate of the $880,000 remains unclear.'' The US government continued to press for more information on the Fitzgerald accounts for two years, until December 1997.

The report said the Antiguan government identified the source of the funds that were transferred from SAB and SANB, but it informed the US that the records of the accounts "were not available because they had been destroyed in a hurricane''.

In the final leg of the saga, in December 1997 the US Department of Justice filed a civil complaint alleging that SAB, SANB, Swiss American Holdings SA and Bank of New York and Inter Maritime Bank intentionally seized and converted the $7 million in illicit proceeds located in accounts in SAB and SANB that had been forfeited to the US Government.

The last chapter closes -- at least for the moment -- when in September, 2000 a Federal District Court judge presiding over the case dismissed the US government claim for lack of personal jurisdiction over the defendants. The US government is going to appeal the matter.

Cash deposits: IRA funds were deposited in the Bank of Bermuda, according to a US Senate report.

Bank of Butterfield: Money was placed in a safe deposit box and later withdrawn.