Anti-Money Laundering

Anita M. Moyer, MSP, CAMS

Banking Crisis Humor

This credit crunch is worse than a divorce. I've lost half my net worth and I still have a spouse.

Banking Crisis Humor

I went to the ATM this morning and it said "insufficient funds." 

I'm wondering is it them or me?

New Dollar is released

WHY BSA?

People want to cheat on their taxes Catch a buzz Get naked!! ( world’s oldest profession!)

Bank Secrecy Act of 1970

Why? Drug trade of the 1960s brought grocery bags of cash into the banks.

Currency Transaction Report (CTR) Suspicious Activity Report (SAR or Somethin’ ain’t

Right) More slavery and human trafficking today than ever

in history. Atlanta #1 hub.

What is Money Laundering?

Money laundering involves taking criminal proceeds and disguising their illegal source in anticipation of ultimately using the criminal proceeds to perform legal and illegal activities.Simply put, money laundering is the process of making dirty money look clean.

What is Money Laundering?

When a criminal activity generates substantial profits, the individual or group involved must find a way to use the funds without drawing attention to the underlying activity or persons

involved in generating such profits. Criminals do this by disguising the sources, changing the form or moving the money to a place where it is less likely to attract attention.

Money Laundering

Where did the name come from? 1930’s Chicago

Find a reason to catch drug dealers, tax evaders, and…

Terrorists.

Money Laundering

Money Laundering Stages– Placement. Getting the money into the bank– Layering. Hiding the source or destination of the funds to

disguise from where it comes or to where it goes.– Integration. Combining illegitimate funds with legitimate

funds in an attempt to make the illegitimate appear legitimate.

Let’s Launder Money

$2,000,000 in 20’s weighs ??? How would you launder money?

– 1. – 2. – 3.

Let’s Launder Money

$2,000,000 in 20’s weighs ??? 220 pounds How would you launder money?

– 1. Painter – cash deposits – many banks– 2. buy big motorhomes from divorcees 2 bills of

sale – sell on ebay– 3. Buy companies that are already CTR exempt.

How Serious is money laundering?

Dec 2004 American Banker article estimates between $600B and $1.5 Trillion Annually

Let’s try to comprehend $1,000,000,000,000 365-104 weekend days = 261 work days Braves stadium holds 40,000 people If we filled stadium w/money launderers,

each working day = $95,785 per person.

How does this effect us?

“We will direct every resource at our command to win the war against terrorists, every means of diplomacy, every tool of intelligence, every instrument of law, every financial influence. We will starve the terrorists of funding…

President George Bush Sept 24, 2001

How does this effect us?

Like it or not, bankers are the gatekeepers at the nations financial borders…Instead of big seizures of cash, the program (USA Patriot Act) has led to books and records that help to identify, locate, and capture bad guys, and uncover (terrorist) plots.

David Aufhauser General Counsel – Dept of Treasury Oct 2002

DEA busts ring accused of sending tons of drugs to USA

402 Arrests 9,512 POUNDS of Cocaine 227 POUNDS of Methamphetamine 27,229 Pounds of Marijuana $45,200,000 US Currency 94 Vehicles and 100 Weapons 22 States – distribution network

USA Today. Thursday, March 1, 2007. Pg 11A

Differences Between Terrorist Financing and Money Laundering

Terrorist financing uses funds for an illegal political purpose, but the money is not necessarily derived from illicit proceeds. On the other hand, money laundering always involves the proceeds of illegal activity. The purpose of laundering is to enable the money to be used legally.

Differences Between Terrorist Financing and Money Laundering

Concealment of funds used for terrorism is primarily designed to hide the “purpose” for which these funds are used, rather than their source.

Similarities Between Terrorist Financing and Money Laundering

Both terrorists and money launderers use the same methods to move their money in ways to avoid detection, such as structuring payments to avoid reporting and underground banking, such as the ancient system of hawala

Why Should Anti-Money Laundering Be Important to You?

Countries around the world have been putting responsibilities on professionals, such as lawyers, accountants, company formation agents, auditors and other financial intermediaries, who have the ability to either block or facilitate the entry of illegitimate money into the financial system.

Why Should Anti-Money Laundering be Important to You?

The responsibilities of such gatekeepers include requiring them to identify clients, to conduct due diligence on their clients, to maintain records about their clients and to report “suspicious” client activities. Some of these rules also prohibit gatekeepers from informing or “tipping off” clients who are the subject of the suspicious transaction reports. Violations may subject gatekeepers to prosecution, fines and even imprisonment.

Questions

Thank you for your Time

Anita M. Moyer, MSP, CAMS anitamoyer3@gmail.com

References

References

1. The USA PATRIOT Act

http://www.epic.org/privacy/terrorism/hr3162.html

2. Handbook on BSA

http://www.occ.treas.gov/handbook/bsa.pdf

3. Banker’s On Line—excellent resource for Q&A

http://www.bankersonline.com/ubbthreads/postlist.php?Cat=&Board=cip&PHPSESSID

4. ACAMS Certification

www.acams.org

References

6. History of FinCEN

http://www.fincen.gov/reg_timeline.html

7. Computer Software Due Diligence

http://www.fdic.gov/news/news/financial/2004/fil12104.html

8. Non-cooperative Countries and Territories

http://www1.oecd.org/fatf/NCCT_en.htm#List

9. Treasury Department updates

http://www.treas.gov/topics/law-enforcement/

10. FinCEN SAR Reviews

http://www.fincen.gov/pub_reports.html#sar_tti

References

12. Charles Montaldo (2007) Drug Bust Nets 400 Arrests, $45.2 Million. USA Today March 1, 2007 http://crime.about.com/b/2007/03/01/drug-bust-nets-400-arrests-452-million.htmpage 11 A