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Treasury picks top DOJ official to head FinCEN, brings nearly 30 years of prosecutorial experience

Friday, November 17, 2017   (0 Comments)
Posted by: Brian Monroe
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By Brian Monroe
November 17, 2017

The U.S. Treasury has picked a top U.S. Justice Department official with nearly 30 years of prosecutorial experience to head the country’s financial intelligence unit and arbiter of national financial crime compliance rules, a critical post that has been left without a permanent leader for nearly two years.

Kenneth Blanco, acting Assistant Attorney General of the Justice Department’s Criminal Division, will be the new head of the Financial Crimes Enforcement Network (FinCEN), taking over for acting director and longtime agency fixture Jamal El-Hindi. He will be transitioning to the new position in the next month. To read the full Treasury release, please click here.

Blanco “is an important addition at Treasury, and will focus on combating money laundering and illicit threats by those who seek to abuse our financial system,” Treasury Secretary Steven Mnuchin said in a statement.

“His extensive background in law enforcement will be a strong asset” to the team at the Office of Terrorism and Financial Intelligence (TFI), he said. FinCEN is a bureau in TFI.

“I am excited to take my 28 years of prosecutorial experience with me to FinCEN, and to join a fabulous team at Treasury,” Blanco said in a statement.

The move is an important one as FinCEN administers the country’s anti-money laundering (AML) defenses. The agency creates new financial crime compliance regulations, helms a database of millions of financial institution filings for law enforcement, uncovers and shares intelligence on organized criminal and terror groups and shapes foreign policy through guidance and designations, just to name some of its top responsibilities.

But throughout its nearly 30-year history, FinCEN has at times struggled to serve its many masters – creating policy through regulations, creating and disseminating law enforcement intelligence, updating technology to facilitate investigations and spearheading AML penalties for compliance failures. To critics, including some members of Congress, this has led to a perception that the agency is failing to reach its full potential.

That view changed markedly in September 2012, when Jennifer Shasky Calvery, the former head of the Justice Department’s Asset Forfeiture and Money Laundering Section, took the helm at FinCEN.

Under her leadership, FinCEN bolstered its beleaguered policy-making division – a sore spot that played a key role in the ousting of her predecessor. It also increased the nimbleness and aggressiveness of its penalty division, acting more quickly on recommendations from other agencies or on its own. The agency dusted off its power to issue geographic targeting orders (GTOs) to garner more intelligence and insight on illicit financial flows in trade and real estate.

Many feared how FinCEN would regain its stride when she departed for a top compliance at HSBC in April of last year. Shasky Calvery is currently the bank’s Global Head of Financial Crime Threat Mitigation. To read an ACFCS profile of Shasky Calvery, please click here.

Without full-time leader, enforcement figures fall

FinCEN has seen its overall enforcement figures fall in the wake of its former Director's departure.

In 2015, Shasky Calvery’s last full year at FinCEN, the agency was a part of a dozen major enforcement actions, including against banks, casinos, money services businesses, and securities firms. In 2016, that figure fell by half, to six actions, and so far in 2017, the number has shrunk further, to four.

It appeared that Shasky Calvery never lost her prosecutorial mindset, surrounding herself with like-minded professionals with deep investigative and enforcement backgrounds. So it’s fitting Treasury brass would try to fill the position with someone cut from the same cloth.

Blanco was appointed to the position of Deputy Assistant Attorney General, Criminal Division in April 2008. Overall, he has nearly 30 years of prosecutorial experience.

During his tenure with the Criminal Division, Blanco has overseen a number of its sections, including the Money Laundering and Asset Recovery Section (formerly the Asset Forfeiture and Money Laundering Section), the Narcotic and Dangerous Drug Section, the Organized Crime and Gang Section, and the Child Exploitation Section, according to Treasury. 

As well, he has “supervised many of the Criminal Division’s most significant national and international investigations into illicit finance, money laundering, Bank Secrecy Act, and sanctions violations, including investigations of global financial institutions and money services businesses,” according to the Treasury.

Blanco is a “good selection for the job,” said an individual familiar with the matter, who asked not to be named. “He has been a prosecutor for a long time and knows a lot about money laundering and other issues around financial crime. He also knows his way around investigations and has a law enforcement background. That will all be very good for his new position.”

How he puts his own personal stamp on the bureau will depend on where he wants FinCEN’s focus to be: enforcement, policy making or law enforcement support.

“A lot will depend on what his vision is for the agency,” said the person. “Does he see FinCEN as a regulatory agency? Any intelligence agency? Or will he be more enforcement-oriented? Some believe one of the best things FinCEN can do is be more of a law enforcement voice in the regulatory community, helping guide examiners on telling banks what they should be focusing on,” such as the most current threats, vulnerabilities and criminal schemes.

Rich relationships, international partnerships will strengthen FinCEN

Blanco also has significant experience in working with foreign law enforcement agencies.

“Much of his work is in the international banking and financial services area, working and collaborating with international partners in countries such as Mexico, Colombia and Panama, among others,” according to Treasury, a key asset as domestic financial crime investigations routinely spill into the international arena, adding more layers of complexity.  

Blanco joined the Department of Justice nearly 20 years ago as an Assistant United States Attorney in the Southern District of Florida.

He later served as the Deputy Chief of Narcotics/Chief of the High Intensity Drug Trafficking Area, Acting Chief of Narcotics, and Deputy Chief of the Major Crimes Section in that Office.

In addition, he has also served as General Counsel to the 94 United States Attorney’s Offices and the Executive Office of United States Attorneys and as Chief of the Criminal Division’s Narcotic and Dangerous Drug Section.

Prior to joining the Department of Justice, Blanco began his career at the Miami-Dade State Attorney’s Office, where he served in various sections including the Organized Crime Section, Public Corruption Section, and the Major Narcotics Section. 

He earned his J.D. from the Georgetown University Law Center, where he also currently teaches as an Adjunct Professor of law.

“I worked with Ken at the Department of Justice and know that he will be a tremendous leader for FinCEN,” Treasury Under Secretary Sigal Mandelker said in a statement, adding that Blanco  has worked closely with many in TFI and has longstanding relationships within Treasury and across the law enforcement community.

“Ken will work closely with Treasury component offices to maximize our authorities and effectiveness,” he said. 

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