When financial institutions agree to cooperate with law enforcement officials in an undercover sting operation targeting customers or employees, they expose themselves to possible trouble from their regulators or a civil suit by irate customers or investors. Before participating in any sting proposed by local, state or federal investigative agencies, banking compliance officials should be sure they understand the unique anti-money laundering compliance challenges and responsibilities that arise from such operations. Bank executives can feel like they are caught "between a rock and a hard place," when a law enforcement agency asks them to keep a money laundering suspect's accounts...
A planned inquiry by a U.S. lawmaker into a tactic used by undercover investigators in money laundering cases may come to a surprising conclusion: the technique has been widely used for decades, say investigators.
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