Legal Solutions | USA
Since 9/11, increased cooperation between law enforcement and financial institutions has made it possible to track and identify terrorists through their financial transactions. International drug cartels and multinational money-laundering schemes have also been thwarted as a result of these cooperative efforts.
Regulations often prevent financial institutions from sharing the sort of information law-enforcement officials need. And when law enforcement subpoenas financial records, they don’t always know what they’re looking for. More face-to-face personal communication can help facilitate dialogue that will speed the discovery process and yield more effective results.
Suspicious Activity Reports (SARs) filed by banks are the primary tool law enforcement uses to identify criminal financial activity. But when frontline bank employees see strange activity they suspect may be criminal in nature, they should tell their supervisor immediately – and, when in doubt, they should call local authorities or the FBI directly. Use judgment and discretion, but don’t hesitate if a threat appears imminent.
Intelligence pieces don’t always fit together neatly, so awareness and persistence are often the difference between finding a lead and missing it. When in doubt, seek clarification from a colleague, superior, or expert from the other side. Individuals on both sides – finance and law enforcement – should strive to develop personal relationships across the aisle to ensure more efficient, effective communication.
The Bank Secrecy Act (BSA), SARs, and the creation of FinCen (Financial Crimes Enforcement Network) have yielded a treasure trove of data that law enforcement officials use every day to identify and prosecute perpetrators of financial crimes. The ongoing challenge is how to sift through the data to find actionable intelligence more efficiently – and how to generate greater transparency and cooperation between federal and local agencies.
Thorough training is the best way to ensure that everyone has the latest information. It helps financial institutions understand new threats and concerns they should be aware of, and gives law enforcement the tools to communicate their informational needs better.
Better training, cooperation, and communication at the regional and local level are crucial for effective intelligence gathering. Important leads often come from personnel at the local level who report suspicious activity. The better people are trained, the more aware they can be of irregular financial patterns and other red flags for criminal activity.
Bankers and financial analysts are very effective in identifying key information. The speed with which useful information can be picked out of a “haystack” of data is often a function of how well financial institutions and law enforcement communicate in person as well as the extent to which personal relationships have been developed over time.
Victims of Ponzi schemes and other types of investment fraud are increasingly taking their grievances to court, suing financial institutions – and in some cases, individuals—for not recognizing illegal financial activity sooner. Suits from customers who have been "de-risked" without sufficient justification are also on the rise.
Criminals take advantage of loopholes in the financial system, but they also leave clues that can lead to their capture. Rules and regulations are important, but finding “workarounds” on both sides is often the only way to make the system work. Don’t lose sight of the big picture.
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