On February 23rd 2022, the ACAMS Carolinas Chapter hosted a virtual event with several law enforcement partners to discuss practical ways to increase the effectiveness of SAR filings. The event was moderated by William Voorhees who is a Senior Vice President and the Senior Director of the BSA/AML Financial Intelligence Unit at Truist. The speakers included:
· Scott Crabb, Assistant Special Agent in Charge, Homeland Security Investigations | Eastern Carolinas
· Crecentia Curran, Special Agent, Federal Bureau of Investigation, FBI Charlotte Division Terrorism Financing Coordinator, CPA
· Meryl Lutsky, Esq., Vice President & General Counsel, Chief Compliance Officer, T&M USA, LLC
The panelists began the discussion by stressing the importance SAR filings play in investigations. They noted that the FinCEN databases can be queried to ensure all CTR and SAR filings are appropriately linked to suspects in a case and that these databases can also be mined using keyword searches. The panel reminded the audience that small-dollar suspicious activity, once aggregated, can help drive convictions. Crecentia discussed the case of Mohamed Elshinawy, of Maryland, who was convicted of terrorist financing and material support of ISIS. It was noted he received $8,700 in foreign wires that were to be used to fund a terrorist attack in the U.S. The panelists agreed that it is not only the transactional data that can be critical to an investigation but also the historical and current biographical data like email addresses, phone numbers, IP and street addresses.
The panel discussed how SAR back-up documentation may allow an investigator or prosecutor to quickly confirm the identity of a suspect outside of a subpoena request, which often takes months, or conduct additional due diligence that can break a case. As a best practice, SAR investigators should include information that is not easily recreated such as ATM video footage, screenshots of websites, and interview notes. The panel shared that it is not uncommon for suspects, especially those conducting online fraud scams, to do their best to clean up their online presence in order to start the illicit activity again if a bank exits the relationship. For example, criminals will take down websites and switch phone numbers to knock an investigator off their trail. SAR filings that contain screenshots of a suspect’s website or the International Mobile Equipment Identity (IMEI) number from a mobile device can assist investigators with tracking criminals. Scott indicated communication is critical to criminal activity. The IMEI is like a Social Security number for a phone allowing it to be tracked even if the criminal changes the SIM card multiple times. This information may be identifiable when criminals access their mobile banking app online and is likely available to a bank’s fraud and cyber teams. Recent FinCEN Advisories regarding ransomware and cyber-attacks also suggest adding IMEI information to SAR filings. Non-profit websites like www.archive.org allow visitors to search the archived history of billions of web pages on the internet including those that no longer exist.
The conversation shifted to a discussion on how transactional data in a SAR filing can be used to establish jurisdiction, or a court’s authority to hear a specific kind of case, and venue. Meryl noted several ways a prosecutor can establish the venue for jurisdiction including by documenting where transactional data is initiated and goes (server to server), where the data is ultimately stored, and any branch locations a criminal may have visited. The panel stressed the importance of writing SARs without bank jargon and in a manner that can be understood by a national audience. For instance, listing branches by city/state vs. internal branch numbers and explaining why specific activity, or its absence, is unusual or suspicious for your client, region, local geography, or product. The panel gave an example of a SAR that indicated a client structured deposits at two branches 50 miles apart on the same day. They noted that in an urban environment such as New York City, this may not be out of the ordinary to an investigator or prosecutor because many people commute into work vs. a rural area where this is not as prevalent.
The panel agreed that money laundering is very hard to prove in court but that sometimes the additional details in a SAR filing allows a prosecutor to obtain an arrest warrant or conviction for another crime. Many of these crimes carry very high bail and sometimes, in well documented SAR filings, the parties that pledge assets for bail can be linked back to the criminal activity of the party seeking bail. They also agreed that strong SAR filings follow the source and flow of funds. If a prosecutor can prove funds are illicit in nature and show, through bank transactional data, the same funds were used to purchase assets then those assets can be seized and applied towards restitution orders.
The conversation finished with the panelists answering several questions around cyber and gift card fraud and their opinions on regulator expectations around quantity vs. quality of SAR filings. The panelists encouraged the audience to establish contacts with their local or regional SAR review team so that when they identify a really bad situation the investigator can pick up the phone and point the SAR review team directly to the filing as opposed to hoping it is eventually picked up and reviewed.
The call concluded with Peter Wild announcing the two paid scholarship winners of the Hollywood ACAMS conference - Jennifer Romero and Terry Ayers. Congratulations to our two winners!
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Blog Written by: Associate Board Member, Sean Marsden, CRC, CAMS