FBI Walks Md./D.C. CUs Through How BSA Filings Are Used
OCEAN CITY, Md. -- Suspicious Activity Reports and other Bank Secrecy Act/Anti-Money Laundering filings completed by credit unions and banks are used everyday to fight terrorism and money laundering, an FBI agent told attendees of the MDDCCUA Annual Meeting.
The saying is that everything costs money and that holds true even in terrorism, FBI Supervisory Special Agent Jeff Walker explained. Tracking criminal and terrorist financing is nothing new to law enforcement. "Every terrorist incident around the world, we've done this," he said, but 9/11 and the Patriot Act pushed information gathering and sharing to the forefront.
In every instance, there is a cycle where terrorists somehow earn money, move it, store it, and spend it. "The information you provide is a piece of that puzzle that we put together," Walker said. Nearly all (94%) currency transaction reports filed had hits in the law enforcement database of people of interest and 3% of suspicious activity reports, but he emphasized that active investigations are arising out of SARs.
Sometimes law enforcement has to try to track it down because the task is done using informal means such as hawalas and couriers. Other times though, traditional checking accounts have been used to deposit money from a seemingly traditional store front--or illegitimate business--with someone holding a debit card overseas withdrawing the funds and funneling it to terrorist organizations, Walker said.
Here is where credit unions' BSA efforts come into play. Knowing your members is important, particularly with the popularity of Internet banking. Domestic and international use of ATM and debit cards eases the flow of all funds, legitimate or not, as well. Another emerging issue in tracking terrorist funds is stored value cards, which the FBI currently has no way of tracking.
"Each one of you is our first line of defense...Thirty to 50% of the terrorism subjects are in the BSA data," he stated. Though there is no one particular thing financial institutions should be looking for in determining suspicious activity some clues include electronic transfers to groups known to support terrorism or large overseas transfers. With the 9/11 hijackers, none of them had a valid Social Security number, they used foreign means of identification, they went to the banks in groups to open accounts, accounts were opened with cash or cash equivalents, and the accounts were just basic checking accounts.