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Money Laundering Related Information Requests Bearing Fruit, Says FinCEN
By Brian Monroe
printFederal law enforcement requests for account and transaction information from financial institutions to help with money laundering and terrorist financing investigations have resulted in dozens of convictions in the past five years, according to a U.S. Treasury report released Tuesday. Some 17 federal law enforcement agencies issued 826 requests to financial institutions, garnering nearly 49,000 positive matches and 41 convictions – a rate of about 5 percent, according to the three-page report issued by the Financial Crimes Enforcement Network, which is responsible for analyzing, approving and issuing the requests to financial institutions. The requests have also contributed to closing 25...
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A proposed rule that would empower foreign and U.S. state and local law enforcement agencies to make information requests under a provision of the Patriot Act is meeting stiff resistance from banks and has raised concerns within the law enforcement community.
The U.S. Treasury Department may be denying state and federal law enforcement authorities a critical source of information for money laundering and terrorist financing investigations by opting not to forward to money services businesses information requests authorized under the Patriot Act.
If a bank releases too much or too little information or takes too long to respond to a request from law enforcement officials, an investigation might be bogged down or even compromised.
The system, expected to be in operation next month, will help banks streamline the process of providing examiners with proof of compliance with law enforcement requests, FinCEN Director James Freis said.
Because data protection laws in Europe and elsewhere make it difficult for a multinational financial institution to share data among all of its branches, the laws "will be the biggest impediment to protection from terrorism," the officials said.
A financial institution should ask for a written request from any law enforcement agency that asks it to keep an account open, according to the U.S. Treasury Financial Crimes Enforcement Network.
Limits such as a rule prohibiting financial institutions from sharing SAR information with nonbank affiliates hinder banks due diligence efforts, Bank of America Compliance Chief William Fox said at a compliance conference in Atlanta.
Many bank employees can't differentiate between SAR-related and other information requests they receive from law enforcement agencies, regulators and other financial institutions. As a result, some hinder financial investigations by ignoring the requests.