Written by Shari R. Pogach, Regulatory Paralegal, NCBSO
Last month, the Financial Crimes Enforcement Network (FinCEN) released Issue 3 of its SAR Stats Technical Bulletin. The bulletin contains nationwide and individual state and territory Suspicious Activity Report (SAR) statistics from March 1, 2012, through December 31, 2016.
So what do the statistics on depository institution SAR filings tell us? First off, filings by depository institutions across the board continue to increase year by year. As an example, credit unions filed a total of 94,582 SARs in 2016, up from 86,071 filed in 2015.
In ranking order for 2016, the three most prevalent payment types used in suspicious activity were: U.S. currency; personal/business check; and funds transfer. Money laundering, fraud and structuring continue to be the most prevalent types of suspicious activity identified, with a category of "other" types of suspicious activity consisting of 858,314 filings. Under the "other" category, the top seven suspicious activities reported included: account takeover; bribery or gratuity; counterfeit instrument (other); elder financial exploitation; embezzlement/theft/disappearance of funds; forgeries and identity theft.
So as the statistics reflect, the “bad guys” still work to use financial institutions to launder ill-gotten proceeds using many of the time-honored ways of attempting to get these funds “clean.” Of course, when the old ways don’t work, the “bad guys” will look for other ways to launder money. This USA Today news story discusses how the drug cartels built up a money laundering hub in Doral, Florida. According to the story, “Federal agents say the criminal organizations use many methods to launder their money, including overseas bank wires and cash smuggling over the border. They also have turned to other laundering areas, like the garment district in Los Angeles and the jewelry centers in New York City, to clean millions in drug profits. But the export shops west of Miami remain among the oldest conduits in the country to launder money — and the most difficult to infiltrate and shut down.”
Basically in this instance the drug cartel set up a money laundering haven where a suburb near Miami “has been home to export shops that sprung up to meet a booming demand for laptops and cellphones in South America. Because of the ample office and warehouse space near Miami International Airport — the largest cargo hub in the nation serving Latin America — the number of export shops mushroomed. Not only was it an ideal place to do business, but in time, it also came to serve the purpose of the criminal groups. Unlike traditional laundering that relied on the banks to hide ownership of the money, this was different. Under a system known as the "black market peso exchange," the drug groups turned to the exporters to launder their cash and make it more difficult to track.” The exporters would receive cash, often in duffle bags, would then purchase and receive goods, and then paid the equivalent amount in pesos back the cartel.
As the SARs statistics reflect and the Florida “black market peso exchange” illustrates, millions of dollars in illicit funds continue to be laundered through the U.S. financial system. And, you are on the front lines to help prevent this.
On a more personal note, I've made a couple of trips to very different parts of the world within the last six months. So my question to you is this, can you tell where in the world was Shari from these vacay snaps?