Archive for the ‘Financial Crimes Enforcement Network’ Category

Anti-Terrorist/Anti-Money Laundering Information-Sharing by Financial Institutions under FINCEN’s Regulations, CRS Legal Sidebar (December 10, 2014)

December 18, 2014 Comments off

Anti-Terrorist/Anti-Money Laundering Information-Sharing by Financial Institutions under FINCEN’s Regulations, CRS Legal Sidebar
Source: Congressional Research Service (via Federation of American Scientists)

Information-sharing programs developed by Treasury’s Financial Crimes Enforcement Network (FINCEN) to implement section 314 of the USA PATRIOT Act have been designed to aid law enforcement investigation and prosecution of money laundering and terrorist financing. Because funds from criminal activity and funds headed to terrorist organizations must pass through the financial system, the FINCEN information-sharing programs have been the means of quickly identifying financial transactions tied to crimes or terrorist organizations under investigation. The section 314 programs supplement more general Bank Secrecy Act requirements, such as the Currency Transaction Reports (CTRs) on cash transactions of $10,000 or more, and the Suspicious Activity Reports (SARs) on transactions suspected to involve criminal activity.

FinCEN Issues Guidance to Financial Institutions on Marijuana Businesses

February 14, 2014 Comments off

FinCEN Issues Guidance to Financial Institutions on Marijuana Businesses
Source: Financial Crimes Enforcement Network

The Financial Crimes Enforcement Network (FinCEN), in coordination with the U.S. Department of Justice (DOJ), today issued guidance that clarifies customer due diligence expectations and reporting requirements for financial institutions seeking to provide services to marijuana businesses. The guidance provides that financial institutions can provide services to marijuana-related businesses in a manner consistent with their obligations to know their customers and to report possible criminal activity.

Providing clarity in this context should enhance the availability of financial services for marijuana businesses. This would promote greater financial transparency in the marijuana industry and mitigate the dangers associated with conducting an all-cash business. The guidance also helps financial institutions file reports that contain information important to law enforcement. Law enforcement will now have greater insight into marijuana business activity generally, and will be able to focus on activity that presents high-priority concerns.

FinCEN 2012 SAR Data Reveals Drop in Suspected Mortgage Fraud; Data Confirms Spike in 2006, 2007 Suspicious Activity

August 20, 2013 Comments off

FinCEN 2012 SAR Data Reveals Drop in Suspected Mortgage Fraud; Data Confirms Spike in 2006, 2007 Suspicious Activity
Source: Financial Crimes Enforcement Network

The Financial Crimes Enforcement Network (FinCEN) today released an analysis of Mortgage Fraud SAR Filings in Calendar Year 2012. FinCEN’s data on suspected mortgage fraud shows that reports declined 25 percent in 2012 (from 92,561 to 69,277) as compared to the previous year. The past three years of suspected mortgage fraud suspicious activity reports (SARs), if counted by the date they were received by FinCEN, accounted for approximately 46 percent of the past decade’s mortgage fraud SARs. However, suspicious activity is often only recognized and reported years after loan origination, after a review of origination documents is prompted by a loan default, repurchase demand, or other factors. As a result, many mortgage fraud SARs are filed much later than the date that the suspicious activity actually began. Thus in 2012, 57 percent of SARs received reported mortgage loan fraud (MLF) activities that started more than 5 years before the SAR was filed.

The bulk of FinCEN’s MLF SARs, regardless of filing date, reference suspicious activity that filers believe began in calendar years 2006 and 2007. The following chart depicts the number of annual mortgage fraud SAR filings based on the year FinCEN received the SAR, versus the year that the SAR filer believed the suspicious activity actually began (which was usually at loan origination). It shows that there was an extraordinary concentration of suspicious mortgage origination activity beginning in 2006 and 2007, the years immediately preceding the financial crisis of 2008.

FinCEN — SAR Activity Review – Trends, Tips & Issues — May 2013

May 8, 2013 Comments off

SAR Activity Review – Trends, Tips & Issues — May 2013 (PDF)

Source: FinCEN (Financial Crimes Enforcement Network)

The SAR Activity Review – Trends, Tips & Issues is a product of continual dialogue and collaboration among the nation’s financial institutions, law enforcement officials and regulatory agencies to provide meaningful information about the preparation, use and value of Suspicious Activity Reports (SARs) and other FinCEN reports filed by financial institutions.

The Trends & Analysis section of this issue opens with an article on SAR filing patterns related to elder financial exploitation before and after the publication of FinCEN Advisory FIN-2011-A003 (Advisory to Financial Institutions on Filing Suspicious Activity Reports Regarding Elder Financial Exploitation) in February 2011. In this section we also report on trends related to SAR filings involving accountants and involving insider abuse within depository institutions. We close this section with an article from FinCEN’s Office of Special Programs Development on how financial institutions have made use of, and benefited from, information sharing under Section 314(b) of the USA PATRIOT Act.

The Law Enforcement Cases section includes interesting and informative summaries of cases that demonstrate the importance and value of BSA data to the law enforcement community. Cases in this section highlight how BSA data, and the detection and analysis of suspicious transactions by financial institutions, proved to be of value to law enforcement and prosecutors.

The month of May is Older Americans Month, and in the Issues & Guidance section we include a message from the Consumer Financial Protection Bureau (CFPB) on efforts by CFPB, FinCEN and others to raise awareness of elder financial exploitation. In this section, we include an additional article with information beneficial to filers of the new FinCEN SAR: SAR Narrative Key Terms: Updated Guidance on the Use of SAR Check Box Items.

See also: SAR Activity Review – By the Numbers – May 2013 (PDF)

SARs Regarding Foreclosure Rescue Scams Increase

October 9, 2012 Comments off

SARs Regarding Foreclosure Rescue Scams Increase

Source: Financial Crimes Enforcement Network

Suspicious activity reports (SARs) regarding foreclosure rescue scams continued to grow in the first half of 2012, even as the total number of SARs indicating mortgage loan fraud (MLF) declined, the Financial Crimes Enforcement Network (FinCEN) announced today in its latest Mortgage Loan Fraud Update. This update to FinCEN’s prior MLF reports looks at SAR filings from April through June 2012 (2012 Q2).

Foreclosure rescue scams target homeowners facing foreclosure with services or advice promising to stop or delay the foreclosure process. These scams prey on the vulnerability of individuals who are in danger of losing their homes. Some of these scams require homeowners to transfer their home’s title or make monthly mortgage payments to the purported "rescuer." Victims may lose thousands of dollars in fabricated fees, and risk losing their homes as well.

Financial institutions filed 2,360 foreclosure rescue related SARs in the first half of 2012. If this current pace continues, the total number of foreclosure rescue scam SARs for the calendar year will far exceed the total of 2,782 reported in 2011. In 2012 Q2, financial institutions submitted 17,476 total MLF SARs, a 41 percent decrease over 2011 Q2; 1,325 (8 percent) of these were related to foreclosure rescue.

Geographically, foreclosure rescue SAR subjects were disproportionately concentrated in California. This was consistent with FinCEN’s past research on debt elimination scams, a type of foreclosure rescue scam, which indicated a large number of the California subjects. Foreclosure rescue SARs filed during this period also noted higher violation amounts as compared to typical MLF SARs.

FinCEN Reminds Mortgage Companies and Brokers of New Regulatory Requirements

August 16, 2012 Comments off

FinCEN Reminds Mortgage Companies and Brokers of New Regulatory Requirements

Source: Financial Crimes Enforcement Network

Financial Crimes Enforcement Network (FinCEN) Director James H. Freis, Jr. today announced the issuance of an advisory for non-bank residential mortgage lenders and originators (RMLOs) to help them identify and report suspicious activity related to potential mortgage fraud. In his remarks before the American Association of Residential Mortgage Regulators’ (AARMR’s) 23rd Annual Regulatory Conference, he also discussed FinCEN’s new anti-money laundering (AML) requirements for RMLOs. As of Monday, Aug. 13, RMLOs must comply with FinCEN’s final rule requiring the establishment of AML programs and the filing of suspicious activity reports (SARs).

FinCEN’s Web site is a key source of information available to both regulators and RMLOs. FinCEN has created a page under the "Financial Institutions" link specifically for mortgage companies and brokers, which contains a variety of publications to assist RMLOs with compliance. Earlier this week, FinCEN issued a Notice to remind RMLOs of their compliance obligations under FinCEN’s regulations. In addition, FinCEN issued an administrative ruling, providing that RMLOs who are also subsidiaries of financial institutions that require the RMLOs to have AML programs and file SARs and are examined by a Federal functional regulator are deemed to comply with FinCEN’s regulations. FinCEN has also made available a Webinar for RMLOs that contains useful references, red flags for potential money laundering, and additional guidance based on inquiries that have been received through FinCEN’s Regulatory Helpline.

FinCEN Assesses Suspicious Activity Involving Title and Escrow Companies

July 11, 2012 Comments off

FinCEN Assesses Suspicious Activity Involving Title and Escrow Companies

Source: Financial Crimes Enforcement Network

Pressing forward in its efforts to address a wide range of criminal risks, particularly in the residential real estate market, the Financial Crimes Enforcement Network (FinCEN) today released its first targeted study analyzing reports indicating suspicious activities involving the Real Estate Title and Escrow Industry.

The study identified thousands of instances where financial institutions, particularly banks and Money Services Businesses (MSBs), filed suspicious activity reports (SARs) involving title and escrow companies, often in connection with mortgage fraud. FinCEN does not currently require title and escrow companies themselves to file SARs, but many have reported suspicious activities by annotating the Report of Cash Payments Over $10,000 Received in a Trade or Business (FinCEN Form 8300) that they are required to file.

"This first baseline study will help inform our ongoing efforts to identify regulatory gaps that criminals look to take advantage of," said FinCEN Director James H. Freis, Jr. "We can now more efficiently and effectively address those gaps and mitigate those risks through public awareness, support to law enforcement, or appropriate regulatory action."

+ Full Report (PDF)