The Cornerstone Report: Volume 2, Issue 2

SAR Referrals Provide Valuable Information To Law Enforcement In Their Fight Against Financial Crime

USA PATRIOT Act enhancements to Title 18 USC 1960 contribute to conviction of four for operating illegal money remitting business.

The globalization of financial transactions has reframed the fight against financial crime into an international endeavor that requires engagement and commitment by all the countries and financial sectors throughout the world. An increase in bulk cash smuggling across borders as well as the laundering of criminal proceeds throughout various countries outside of the country where the crime was perpetrated has forced law enforcement to adapt to criminals ever-changing methods. Criminals continue to adapt their methods of moving their proceeds in response to the successful application of U.S. anti-money laundering laws that were first enacted in 1986—both criminal and civil. The adaptation by criminals to law enforcement and regulatory action presents a constant challenge. Each new challenge creates new hurdles to overcome in investigations in order to successfully identify and dismantle the means by which criminals sustain their illegal activity. ICE recognizes this challenge and appreciates the financial industry’s invaluable partnership in combating money laundering and other financial crimes through the filing of suspicious activity reports (SARs) and currency transaction reports (CTRs) that are shared with law enforcement.

Recently, as a result of numerous SARs filed by vigilant bank employees, ICE and the Internal Revenue Service Criminal Investigations Division (IRS-CI) in Newark, NJ initiated an investigation into a money remittance business that culminated in the successful prosecution of 5 subjects associated with the business. The SARs alerted law enforcement to unusual patterns of deposits with immediate wire transfers to countries outside of the United States—these patterns, as identified in the SARs, were indicative of possible money laundering and structuring. The investigation revealed that the money service business (MSB), although licensed, did not allow public access and therefore was not a legitimate MSB. The MSB utilized four couriers to transport large sums of bulk cash to the business; the MSB then deposited the cash into their bank accounts and wired the money to the Middle East. ICE and IRS-CI’s investigation disclosed that the business made over $100 million in cash deposits within 30 months. The owner of the business was charged with violations of the Bank Secrecy Act including, Failure to file Currency Transaction Reports (CTRs) and Structuring transactions to Evade Reporting Requirements in addition to Conspiracy and Aiding and Abetting.

This case highlights not only the value and utility of SARs but the vulnerability of the MSB industry—an industry that often provides a legitimate and valuable service to the immigrant population—but an industry which is often exploited by criminals in furtherance of their criminal scheme. A critical note to this case is how it demonstrates the importance of law enforcement and private sector partnerships in protecting the homeland with the bank employees serving as “first responders” through the filing the SARs.

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Cornerstone Calendar

Cornerstone is U.S. Immigration and Customs Enforcement's (ICE) comprehensive investigative initiative for fighting financial crime, trade fraud and intellectual property crime.

The Cornerstone Report is a quarterly bulletin highlighting key issues related to ICE financial and trade investigations.

The Cornerstone Report covers a broad range of topics related to financial investigations and potential vulnerabilities in the financial and trade sectors.

We strive to present clear thinking by knowledgeable observers that can be read with ease and pleasure by both professionals and a general audience, and we’re happy to review unsolicited submissions for potential publication in the newsletter.

If you would like to submit an article for publication or simply find out more about how you can participate in the Cornerstone initiative, drop us an e-mail at tripwire@dhs.gov.