AMERICAN authorities have criticised the Hongkong Bank in connection with the laundering of millions of dollars of drug money by Colombian cartels using banks in Panama. A New York federal court has granted a request by American law officials to seize a bank account containing US$7.7 million (HK$60.8 million) deposited first in the Hongkong Bank of Panama and then wire-transferred to the American accounts of drug dealersin the Marine Midland Bank of New York, which is a subsidiary of the Hongkong Bank. The Hongkong Bank of Panama has come under particular criticism by US investigators, charging the bank should have suspected it was being used for illegal activities. ''Hongkong Bank had the exact same information that the US Government had in examining the activity of this account,'' Assistant US Attorney Mr Donald Clark said. A spokesman for the bank said last night he was not aware of a Washington Post story or the allegations, and could not comment. According to the Washington Post, Colombian drug dealers are still using Panama, despite the arrest of former Panamanian leader Manuel Noriega, to launder their money by first purchasing money orders in the US which are then smuggled out to be cashed in Panama and deposited in banks for transfer back to the US. In one case involving the Hongkong Bank, US postal inspectors monitored the bank's transactions for 47 days. Postal inspector Mr James Callery told a New York court last month the bank collected about US$12,000 in money orders in small denominations of US$500 to US$700 from Panamanian depositors. Mr Clark said: ''They [the Hongkong Bank] certainly knew there were a tremendous number of domestic postal orders purchased in New York, but they never questioned why these would be used as instruments for financial transactions in Panama.'' Mr Clark said legitimate businesses ''simply don't'' operate by using small amounts of money orders. Under US banking laws, any currency transactions above US$10,000 have to be reported, but drug dealers launder money by keeping their transactions in small amounts to avoid detection. During last month's New York court hearing to seize the Hongkong Bank account, law officers told the court money orders had physically been taken out of the country in box loads to be cashed by Panamanian money-laundering businesses like jewellery stores. The money was then deposited in the Hongkong Bank of Panama, transferred to the Marine Midland Bank in New York and unwittingly returned to the US accounts of the drug dealers. US officials said the US$7.7 million seized from the Hongkong Bank account was only a fraction of the estimated US$70 million involved in this money-laundering scheme. Although Noriega is serving a 40-year jail term in Florida for drug smuggling, they said Panama's lax banking laws had made it a haven for the multi billion-dollar laundering of Colombian drug money. ''We are talking about hundreds of billions of dollars each year,'' a Miami-based Drug Enforcement Agency official, Mr Thomas Cash, said. He said there was a ''feeding frenzy'' by Latin American banks to attract the business because of the money involved.