financial crimes enforcement network june 17, 2009 julie hadley regulatory policy and programs...

Financial Crimes Enforcement Network

June 17, 2009

Julie Hadley

Regulatory Policy and Programs Division

FinCEN MissionFinCEN Mission

To enhance U.S. national security, deter and detect criminal activity, and safeguard financial systems

from abuse by promoting transparency in the U.S. and

international financial systems.

How we achieve our mission

How we achieve our mission

• Administering the Bank Secrecy Act;

• Supporting law enforcement, intelligence, and regulatory agencies through sharing and analysis of financial intelligence;

• Building global cooperation with our counterpart financial intelligence units; and

• Networking people, ideas, and information.

FinCEN – Administrator of the Bank Secrecy ActFinCEN – Administrator of the Bank Secrecy Act

Commodity Futures Trading Commission

(CFTC)

Federal LawEnforcement Agencies

Financial Intelligence Units (FIUs)

Bank Secrecy Act

Securities and Exchange

Commission (SEC)

Internal Revenue Service (IRS) Financial Industry

Federal Banking Agencies (FBAs)

State SupervisoryAgencies

Depository Institutions Non-Bank Financial Institutions

• Money Services Businesses • Travel Check Businesses• U.S. Postal Service• Casinos/Card Clubs• Tribal Casinos• Broker Dealers• Futures Commission • Merchants/Introducing Brokers• Dealers in Precious Metals and Jewels• Insurance Companies

• Money Services Businesses • Travel Check Businesses• U.S. Postal Service• Casinos/Card Clubs• Tribal Casinos• Broker Dealers• Futures Commission • Merchants/Introducing Brokers• Dealers in Precious Metals and Jewels• Insurance Companies

Financial Institutions Subject to the Bank Secrecy ActFinancial Institutions Subject to the Bank Secrecy Act

• Commercial Banks• Credit Unions• Savings and Thrift Institutions• Trust Companies• Branches of Foreign chartered

banks doing business

in the U.S.

• Commercial Banks• Credit Unions• Savings and Thrift Institutions• Trust Companies• Branches of Foreign chartered

banks doing business

in the U.S.

• Federal Deposit Insurance Corporation

• Federal Reserve Board

• Office of the Comptroller of the Currency

• Office of Thrift Supervision

• National Credit Union Administration

• Securities and Exchange Commission

• Commodity Futures Trading Commission

• Internal Revenue Service – SB/SE

• State Regulatory Departments

Regulatory PartnersRegulatory Partners

Law Enforcement Partners

Law Enforcement Partners

• Alcohol, Tobacco and Firearms (ATF)• Federal Bureau of Investigation (FBI)• Immigration and Customs Enforcement (ICE)• U.S. Secret Service (USSS)• Internal Revenue Service-Criminal Investigations Division (IRS-

CID)• U.S. Postal Inspection Service• Drug Enforcement Agency (DEA)• Naval Criminal Investigative Service• Department of Homeland Security (DHS)• Army – Criminal Investigations Division• Department of Justice (DOJ)

Global PartnersGlobal Partners

FinCEN is one of 107 recognized national Financial Intelligence Units (FIU) across the globe

FIUs play a lead role in international efforts to combat money laundering and terrorist financing

Egmont Group• Formed in 1995 to establish an informal

group for the stimulation of international co-operation

• Meet regularly to find ways to cooperate, especially in the areas of information exchange, training & sharing of expertise

Global PartnersGlobal Partners

Membership in the Egmont Grouppermits FinCEN to:

• Support U.S. anti-money laundering policy initiatives on a global basis

• Provide technical assistance & training

• Exchange information

Global PartnersGlobal Partners

AlbaniaAndorraAntigua & BarbudaArgentinaArmeniaArubaAustraliaAustriaBahamasBahrainBarbadosBelarusBelgiumBelizeBermudaBosnia & HerzegovinaBrazilBritish Virgin Isl.BulgariaCanadaCayman Isl.ChileColombiaCook Isl.Costa Rica

CroatiaCyprusCzech RepublicDenmarkDominicaEgyptEl SalvadorEstoniaFinlandFranceGeorgiaGermanyGibraltarGreeceGrenadaGuatemalaGuernseyHondurasHong KongHungaryIcelandIndiaIndonesiaIrelandIsle of ManIsrael

ItalyJapanJerseyKoreaLatviaLebanonLiechtensteinLithuaniaLuxembourgMacedoniaMalaysiaMaltaMarshall Isl.MauritiusMexicoMoldovaMonacoMontenegroNetherlandsNetherlands AntillesNew ZealandNigeriaNiueNorwayPanamaParaguay

PeruPhilippinesPolandPortugalQatarRomaniaRussiaSan MarinoSerbiaSingaporeSlovakiaSloveniaS. AfricaSpainSt. Kitts & NevisSt. Vincent & the GrenadinesSwedenSwitzerlandSyriaTaiwanThailandTurkeyTurks & CaicosUkraineUAEUnited Kingdom

United StatesVanuatuVenezuela

BSAAG: Bank Secrecy Act Advisory Group

BSAAG: Bank Secrecy Act Advisory Group

A Convergence of…

Law Enforcement

Industry

Regulators

FinCEN

BSAAGBSAAG

• Created by the Secretary of the Treasury as directed by Congress

• Active solicitation of advice on the administration of the BSA

• Forum to examine the benefits of the BSA, enhancing utility, and strive for increased efficiency and effectiveness.

Industry PartnersIndustry Partners

• BSA reports are the cornerstone of the U.S. government’s efforts to disrupt illicit financial activity

• These reports do help put criminals in jail

• FinCEN does recognize the significant costs and resources the industry invests in complying with these responsibilities

SAR SAR-C SAR-SF

CTR CTR-C DEP

Form 8300

SAR-MSB

CMIR

RMSBFBAR

• FinCEN analysts use BSA data to:– support investigative efforts– conduct geographical threat assessments– study currency flows– develop information on emerging trends and

issue comprehensive analytical reports

Industry PartnersIndustry Partners

Law Enforcement Partners

Law Enforcement Partners

The SAR Activity ReviewThe SAR Activity Review

Total SARs: 78,682

Suspicious Activity Report Filing Trend for the State of Virginia For the Period April 1,

1996 through December 31, 2008

1,269 1,208 1,501 1,5352,001

3,0143,536

4,771

6,053

8,109

11,836

15,711

18,138

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Characterizations of Suspicious Activity for the State of VirginiaFor the Period April 1, 1996 through December 31, 2008

Additional Characterizations15,60715%False

Statement4,2464%

Counterfeit Check4,1514%

Identity Theft4,6214%

Wire Transfer Fraud6,3026%

Mortgage Loan Fraud7,2627%

Other9,3529%

Check Fraud12,30212%

Credit Card Fraud15,54815%

BSA/Structuring/Money Laundering

25,88624%

3,484

2,850

2,231

1,666

1,327

1,088

1,079

739

448

260

195

192

48

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Check Kiting

Consumer Loan Fraud

Defalcation/Embezzlement

Counterfeit Credit/Debit Card

Misuse Of Position Or Self-Dealing

Unknown/Blank

Mysterious Disappearance

Debit Card Fraud

Counterfeit Instrument (Other)

Commercial Loan Fraud

Terrorist Financing

Computer Intrusion

Bribery/Gratuity

Note: The pie chart represents the top nine characterizations plus additional characterizations in total. An individual SAR may cite more than one characterization. Hence, the number of characterizations detailed here significantly exceeds the total number of SARs. Total numbers are calculated by Filing Branch Address – not subjects address.

Virginia Mortgage Loan Fraud SAR Filing Trend For the Period April 1, 1996 through December 31, 2008

Note: Suspicious Activity Report statistical data is continuously updated as additional reports are filed and processed. For this reason, there may be minor discrepancies between the statistical figures contained in this report and those in previous FinCEN reports. Total numbers are calculated by Subjects Address – not filing address.

18 31 49 37 62 81 94168

351

581

821

1,338

1,993

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Total SARs: 5,624

Suspicious Activity Report Geographic Pattern for the State of Virginia

For the Period January 1, 2007 through December 31, 2007

Note: Statistics based on Filer Branch Address

SAR Filings by ZIP Code

101 to 5,510 (17)31 to 100 (66)21 to 30 (32)11 to 20 (62)0 to 10 (1050)

Suspicious Activity Report Geographic Pattern for the State of Virginia

For the Period January 1, 2008 through December 31, 2008

Note: Statistics based on Filer Branch Address

SAR Filings by ZIP Code

101 to 5,170 (21)31 to 100 (76)21 to 30 (28)11 to 20 (75)0 to 10 (1022)

BSA Value - Sources of Feedback

BSA Value - Sources of Feedback

• The SAR Activity Review, Trends, Tips, and Issues

• SAR Activity Review – By the Numbers

• Analytic Assessments

• NEW FinCEN web site – Law Enforcement Cases and Success Stories

ResourcesResources

• FFIEC BSA/AML Examination Manual

• Guidance/Rulings/Advisories

• 314(a) Secure Information Sharing System

• Guidance on Preparing SAR Narratives

• Electronic filing – Enrollment Information

• New FinCEN website - www.fincen.gov

Contact InformationContact Information

FinCEN Regulatory Helpline1-800-949-2732

Financial Institutions Hotline1-866-556-3974

www.fincen.gov