FINCEN Director’s Remarks 8/12/2014

FINCEN Director’s Remarks at AML Conference on August 12, 2014

Remarks of Jennifer Shasky Calvery, Director of the Financial Crimes Enforcement Network (FINCEN) at the 2014 Mid-Atlantic AML Conference in Washington, DC on August 12, 2014

I have extracted a large section of FINCEN’s Director remarks a week ago at this compliance conference, because I feel it is important that everyone in the industry reads the message that FINCEN is sending to Banks with respect to banking MSBs, in our case Money Transfer Companies. If you still have a Banking Account is important that you share this message with their Compliance Team (a formal letter with the attached pdf highlighting some parts of the remarks) and even set-up a meeting to talk about the issue and ask what else you can do, as a company, for the bank to feel confident of your ever improving compliance practices.
Hugo Cuevas-Mohr

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Cross Border Currency Exchange: The US-Mexico Border

The Background
A key feature of the international financial system over at least the last decades has been the large expansion of cross-border financial transactions. This expansion is very noticeable in border regions since people and businesses at both sides of the border try to benefit from advantages on one side or the other. Cross-border transactions have grown significantly and US northern and southern borders are no exception. .

The Fear
All types of Criminals – and terrorists too, around the world are also very active in the border regions; they use cash couriers as a major means of physically moving funds across borders in order to finance their illicit activities and to launder their ill-gotten gains. There have been many initiatives to facilitate the detection, investigation and prosecution of drug trafficking offences and serious crimes that involve the transportation of cash across borders; international anti-money laundering and counter-financing of terrorism standards recommended by the Financial Action Task Force (FATF) are in place in most countries and this Best Practice Paper describe such standards. Another good Best Practice Paper was issue by the MENA FATF group.

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The Compliance Profession after the US 5 Million Thomas Haider proposed fine

The Background

According to news reports, FINCEN notified Thomas Haider, former Chief Compliance Officer of MoneyGram that he could be fined up to $5 million for compliance failures that resulted in the money-laundering fraud scheme where in November 2012 MoneyGram agreed to forfeit $100 million and entered into a deferred prosecution agreement with the Justice Department for aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act. .Tom Haider, who was the CO at the time, and his legal counsel are expected to meet with FinCEN officials to contest the fine, the news have also reported. Note: FinCEN announced on Dec 18,2014 that it had assessed a Civil Penalty of US 1 million and was seeking to bar him from the Financial Industry, see here: http://1.usa.gov/1xahywP .

According to court documents, MoneyGram processed thousands of transactions for its own agents known to be involved in an international scheme that defrauded tens of thousands of members of the U.S. public out of at least $100 million. MoneyGram profited from the scheme by collecting fees and other revenues on the fraudulent transactions from 2004 to 2009. More on this story here.. This proposed fine – and others – have caused a shift in prosecution of AML/BSA cases that is important to analyze.

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