The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions. By April 24, 2002, all brokerage firms were required to have new, comprehensive anti-money laundering programs.

What is money laundering? Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales; drug trafficking, robbery, fraud, racketeering, and terrorism.

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Some of those policies are: Making sure clients have valid proof of identification Maintaining records of identification information Determining that clients are not known or suspected terrorists by checking their names against lists of known or suspected terrorists. Telling clients that information they provide may be used to verify their identity Closely following clients' money transactions Not accepting cash, money orders, third party transactions, Exchange-Houses transfers or Western Union transfers.

MONEY LAUNDERING USSUALY FOLLOWS THREE STAGES

First, cash or cash equivalents are placed into the financial system. Second, money is transferred or moved to other accounts (e.g. futures accounts) through a series of financial transactions designed to obscure the origin of the money (e.g. executing trades with little or no financial risk or transferring account balances to other accounts). Finally, the funds are reintroduced into the economy so that the funds appear to have come from legitimate sources (e.g. closing a futures account and transferring the funds to a bank account).

Dunhill Scott Inc. complies with all anti-money laundering rules and has policies to deter people from laundering money.