If you were at the FIBA AML Conference in Miami this week, you know that trade-based money laundering was a hot topic with US regulators. Now the Financial Crimes Enforcement Network [FinCEN] has released an important Advisory* on the subject of Suspicious Activity Reports [SARs], when when trade-based money laundering incidents are detected by compliance officers. The well-footnoted Advisory contains an extensive list of the "Red Flags," or indicia, of trade-baded money laundering, where criminal proceeds are cleverly and artfully transferred through wire transfers hiding amidst international trade transactions. the advisory also discussed the Black Market Peso Exchange, or BMPE, in its many permutations and combinations, including non-Colombian variations.

The Financial Action Task Force [FATF] has gone on record again with two lists of jurisdictions deficient in AML/CFT regimes. I know you will want to review every word, so I am just listing the names on the so-called Blacklist for the benefit of those readers who have not yet heard about the two FATF Public Statements released on 18 February. The complete text can be found on the FATF website.  

The "Merchant of Death," Viktor Bout, and his reputed chief financial manager, Richard Chichakli, have been indicted* in Federal Court in New York for Conspiracy to violate the IEEPA**, money laundering conspiracy, and wire fraud conspiracy. The Defendants allegedly used front organisations to attempt to purchase two Boeing airliners, in violation of OFAC sanctions. The indictment further alleges that financial institutions in Cyprus, Russia, and the United States were used in furtherance of the conspiracy.

If you want to know what it is like to work inside a company which is a multi-million dollar Ponzi Scheme, come to the World-Check Power Breakfast, at 7:30 AM on Friday, at the FIBA Anti Money Laundering Compliance Conference* in Miami, and hear me relate my personal experiences, working for a major Fort Lauderdale-based investment company, later closed down by court order, and alleged by US law enforcement to be a $1.2bn Ponzi Scheme.   

The recently released US Senate Staff Report, from the Permanent Subcommittee on Investigations, on how corrupt PEPs gain access to the US banking system was extremely critical of financial institutions that use "inadequate PEP lists prepared by third party vendors." it shows how, time and time again, US financial institutions are fooled by PEPs, their close relatives, friends, and attorneys, when they fail to identify PEP accounts, either through the names of the account holders, or through the account activity, either of which a superior PEP/high-risk database would expose immediately.  

When AML compliance programmes were improved, as the direct result of the USA PATRIOT Act of 2001, many money launderers moved their operations to relative safety of the non-bank financial institutions, which they still continue to utilise, for the most part, successfully, somewhere in the financial world. One of the most widespread types of NBFI is the money service business, or MSB, whose unique characteristics and industry culture has attracted money launderers fearful of bank compliance progammes. The purpose of this article is to detail some of the major reasons that launderers choose to target MSBs, which are used not only for the primary placement phase, but also the secondary layering operation. 

Martha Ines Cheang received a sentence of two years, in US District Court in Tuczon, Arizona*, for bulk cash smuggling, attempting to smuggle firearms and ammunition into Mexico, and failure to report the $250,245 hidden in her vehicle, as it exited the United States. What's wrong with this picture ? If this individual was merely a money mule, on her first trip, I might see the sense of the court's ruling, but there's much more.

A Federal judge in Fort Lauderdale, Florida has acquitted Thomas Raffanello, the former global head of security for the Stanford Bank organisation, charged with Obstruction of Justice, for the destruction 550 pounds of bank documents that were ordered preserved by a United States District Court in Texas. A Judgment of Acquittal was entered by the Court whilst the jury was considering the fate of Mr. Raffanello, who is the retired head of the Miami division of the Drug Enforcement Administration [DEA]. This is the first case in the Stanford Bank $7bn Ponzi scheme scandal to go to trial; during the proceedings, the Court stated that the evidence presented was "slight, and "precious thin," and "substantially lacking." Inasmuch as there were reportedly computer duplicate of the paper documents, many observers have questioned the government's actions in this case. Raffanello was represented by senior members of the Miami criminal defence bar, and had the support of a number of former law enforcement agents and Federal prosecutors.  

The Office of Foreign Assets Control [OFAC] yesterday warned* users of its data that there are problems with certain SDN files, "due to a combination of inclement weather and network connectivity issues, certain OFAC SDN files were corrupted on their release." It is not known what adverse impact these reportedly corrupted files have on computer systems when downloaded, but it is suggested that they be avoided.

Western Union Financial Services, Inc. has agreed* to a $94m regulatory settlement with the State of Arizona, involving legal issues that date back to 2003. What is important is the tactical use to which much of the fines and penalties will be put: to fund money laundering, human smuggling, drug smuggling and arms trafficking investigations and prosecutions in Arizona, California, New Mexico and Texas. Western Union will also be required to enhance both its AML programme and independent monitoring of the programme.