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FinCEN issues proposed rule to strengthen and modernise financial institutions’ AML/CFT programmes

The proposed rule would amend regulations to explicitly require that AML/CFT programs be effective, risk-based, and reasonably designed, enabling financial institutions to focus their resources and attention in a manner consistent with their risk profiles.

US DoJ announces that sweepstakes operators have admitted guilt for violating the Bank Secrecy Act

Two US men admitted guilt for conspiring with bankers to deliberately avoid implementing necessary AML controls at a Missouri bank, violating the Bank Secrecy Act (BSA).The bank had to file currency transaction reports with FinCEN for transactions over $10,000…

US DoJ sentences two men for orchestrating multimillion-dollar schemes involving cryptocurrency securities fraud and wire fraud

Principal Deputy Assistant Attorney General Nicole M. Argentieri announced that Shane Hampton, Michael Kane, and others deceived investors by manipulating their company’s cryptocurrency prices through a trading bot. This landmark federal trial marked the first instance where a cryptocurrency was legally classified as a security, connecting price manipulation directly to securities fraud…

US DoJ confiscates over US$1m in collectible stamps linked to a criminal fraud scheme

The government has pinpointed 28 victims from the U.S. who fell victim to deception and fraud through two phases. Initially, individuals posing as SEC officials contacted victims, alleging their bank accounts or identities were compromised. Victims were directed to transfer their funds to designated accounts to secure them, falsely claiming involvement in ML…

US GAO reports that better information is needed on the effectiveness of Federal efforts in AML

The GAO identified 31 sections in the 2020 AML Act assigned to FinCEN, which include establishing standards for testing new AML technology. By November 2023, GAO noted that FinCEN had reported varying levels of detail on progress for 19 sections, underscoring the need for more comprehensive disclosure to improve transparency and accountability…

 

 

Finextra: Crypto bank Silvergate pays $63m to settle regulator charges for misleading investors about the strength of their AML program and the losses sustained during the collapse of FTX

The SEC charged Silvergate and its executives with misleading investors about the company’s losses from expected securities sales and its dire financial condition during a liquidity crisis and bank run following FTX’s collapse. Silvergate and Martino misrepresented the situation leading the firm to announce the winding down of its banking operations last year. Consequently, the company’s stock plummeted to nearly zero…

Financial Times: U.S. federal law enforcement officials stated that suspects chose Citigroup ATMs for ML due to operational advantages

US prosecutors revealed that drug traffickers chose Citigroup for ML due to its perceived weaker fraud controls. In January 2021, two California residents deposited nearly $36,000 in illicit cash at Citi ATMs by splitting the amount into smaller transactions to avoid detection. The Drug Enforcement Administration reported that the duo, allegedly part of a network laundered at least $50m, chose Citi after evaluating several banks…

FinCEN finalises financial measure against Iraq-based Al-Huda Bank to combat terrorist financing

A final rule issued under section 311 of the USA PATRIOT Act (section 311) that severs Al-Huda Bank from the United States financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing.

FinCEN clarifies beneficial ownership reporting requirements releasing updated FAQs

The FAQs provide essential clarifications on reporting obligations, required information and compliance procedures which are crucial for businesses to understand and adhere to under the new regulations…

FinCEN reminds financial institutions to remain vigilant to elder financial exploitation

FinCEN reminds financial institutions to remain vigilant in identifying and reporting suspicious activity related to elder financial exploitation (EFE). EFE-related losses affect personal savings, checking accounts, retirement savings, and investments, and can severely impact victims’ well-being and financial security as they age. FinCEN has previously published resources to help stakeholders combat EFE…

FinCEN issues supplemental advisory on the illicit procurement of fentanyl precursor chemicals and manufacturing equipment

The supplemental advisory builds off FinCEN’s 2019 advisory with new typologies and red flags to identify and report suspicious transactions, and fulfills the requirement in Section 3202 of the recently enacted FEND Off Fentanyl Act.

FBI warns of scammers defrauding individuals via work-from-home scams

The scammers pose as a legitimate business, such as a staffing or recruiting agency, and may contact victims via an unsolicited call or message. Scammers design the fake job to have a confusing compensation structure that requires victims to make cryptocurrency payments in order to earn more money or “unlock” work, and the payments go directly to the scammer. Scammers direct victims to a fake interface, which shows victims are earning money, though none of it is available to them to cash out…