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FinCEN highlights value of AML filings in cracking fraud cases, increasing focus on crypto: Director

Thursday, August 16, 2018   (0 Comments)
Posted by: Brian Monroe
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By Brian Monroe
bmonroe@acfcs.org
August 16, 2018

The U.S. Treasury is more aggressively mining the wealth of data buried in financial crime compliance filings to better crush a range of crimes, including large scale fraud cases, cyber hackers monetizing their hauls through virtual currency exchanges and cross-referencing these trends against crypto’s foundational blockchain.

Those are just some of the key takeaways from two speeches by Kenneth Blanco, the recently minted Director of the Financial Crimes Enforcement Network (FinCEN), who took over in December.

He touched on a host of topics at a crypto conference in Chicago last week and a Las Vegas AML conference Tuesday, noting that just as the country’s financial intelligence unit is trying to maximize its vast data warehouse to empower compliance professionals and counter criminals, all entities subject to anti-money laundering (AML) compliance rules should share more information with each other.

Blanco highlighted one sprawling “IRS scam,” that used AML data, including from casinos, and multiple federal investigative agencies, to help identify previously undiscovered accounts and transactions related to domestic and foreign scammers acting as IRS agents.

The faux IRS agents, working from call centers in the United States and India, stole the life savings of an 85-year-old woman and, in another instance, in less than a month, stole more than $136,000 from another vulnerable individual.

The groups typically targeted the elderly and other groups that were desperate to increase fixed incomes and limited savings.  

As a result of poring over AML and other records, investigators named 56 individuals in the United States and India, as well as five India-based call centers. 

Twenty-four subjects in the United States were arrested across eight states, all of whom were convicted of conspiracy, money laundering, and various fraud crimes.

On the crypto side, FinCEN and the Internal Revenue Service (IRS) have examined over 30 percent of all registered virtual currency exchangers and administrators since 2014.

Blanco noted that he was “surprised to see financial institutions establish an adequate number of compliance staff and take appropriate steps to meet their regulatory requirements only after they receive notice,” of an impending regulatory review.  

But, overall, FinCEN and IRS efforts have “had a tangible, positive impact on compliance programs, and we have seen SAR filings from virtual exchanges rise tremendously over the past few years,” to roughly, 1,500 a day, including crypto and other filers.

To read the crypto speech, click here, and the casino speech, click here


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