WASHINGTON-According to Financial Crime Enforcement Network (FinCEN) data, suspicious activity reporting has increased dramatically since last September. Following the terrorist attacks last year, law enforcement discovered that terrorists were using the U.S. financial services system to help fund their activities. While Suspicious Activity Report (SAR) filing mainly stayed under 17,000 per month prior to September 2001, from October through May 2002, the last month of data in FinCEN’s SAR Activity Review: Trends, Tips, & Issues, the filings ranged from nearly 18,000 to as many as 26,562. For example, SAR filings during October 2001 jumped to 20,571 compared to 13,148 in the previous year. The greatest increase was during May 2002, which saw 26,562 SARs filed, compared to 16,335 last May, for a difference of 10,227. Between May 2000 and 2001, there was only an increase of 2,661, the report revealed. On average, institutions reporting to NCUA have filed an average of 592 SARs each month, as compared with 440 per month for 2001. Most suspected violations were in the Bank Security Act/ Structuring/ Money Laundering category (47.6%). The increase in reporting could be a result of more intense scrutiny of transactions by the private sector or more pressure from government officials to file and file appropriately, in addition to typical yearly increases. “Since September 11th, it has become even clearer that the BSA and other anti-money laundering measures can assist in the fight against terrorism. However, it is also apparent that it can be difficult to definitively identify terrorist fundraising activities separate and apart from traditional money laundering and financial crime activities,” the report read. While there is no sure way to identify terrorist financing, there are some patterns that were gleaned from the financial activities of the September 11 hijackers. For example, the terrorists’ accounts were opened with cash or cash equivalents on average of $3,000 to $5,000; foreign visas were the primary form of identification used to open the accounts; and accounts were all regular checking accounts with debit cards. Transactions that took place involving the accounts included numerous attempts to withdraw more cash than was available; a high percentage of withdrawals involved debit cards; and numerous balance inquiries were made. Internationally, hijackers on all four flights purchased traveler’s checks outside the U.S. and were brought into the country with them. The report notes that total understanding of the activity would require study at the global level. “Financial transaction activity alone may not identify terrorist financing,” the report warned. “However, financial institutions are often in a position to compare that activity with other information provided by the government that could produce significant leads and other useful information regarding potential terrorist activity. Law enforcement and the regulatory agencies will continue to provide the industry such information as may appropriately be made public to assist them in that effort.” [email protected]

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