The Asset Forfeiture and Money Laundering Section (AFMLS) leads the Department of Justice’s anti-money laundering enforcement efforts.  AFMLS accomplishes this by prosecuting and coordinating complex, sensitive, and multi-district, and international money laundering investigations and cases.  This includes money laundering cases involving underlying violations of export controls, economic sanctions, financial reporting requirements, and other national security related laws.

Criminal Enforcement of the Bank Secrecy Act and FinCEN Regulations

Historically, the federal government primarily focused on prosecutions of individuals and financial institutions for money laundering offenses such as 18 USC Sections 1956, 1957, and 1960.  Today, however, there has been renewed attention paid to criminal enforcement of the Bank Secrecy Act (BSA), the statutory and regulatory framework that requires financial institutions to detect and prevent money laundering and illicit finance.  Such criminal investigations primarily involve structured payments, evasion of financial reporting requirements, or failure to implement adequate anti-money laundering programs.

The BSA, codified in Title 31, has undergone several revisions, most recently through amendments introduced by the Patriot Act, and it places affirmative obligations on financial institutions to implement anti-money laundering policies that prevent the flow of illicit funds through those institutions. Financial institutions are also required to report large cash transactions, as well as any suspicious transactions—information critical for law enforcement to prosecute criminal actors and forfeit criminal proceeds. Notably, although principally a regulatory framework, Title 31 provides criminal as well as civil penalties for “willful” violations of the BSA.

Suspicious Activity Reports

More than ever, financial institutions and businesses are under pressure to report the financial activities of their customers and clients.  These reports, called Suspicious Activity Reports (SARs), are filed secretly with the Financial Crimes Enforcement Network, or FinCEN.  FinCEN processes these reports and forwards the information to the appropriate law enforcement agency for further investigation and inquiry.  In many cases the information contained in a SAR can initiate a criminal investigation into the underlying suspicious transaction or contribute to an existing criminal investigation.

Moreover, given the Department of Justice’s renewed interest in enforcing the BSA, there is an increase in criminal investigations into violations of the BSA itself, as opposed to just using the BSA to uncover other criminal activity. This increased BSA-focused scrutiny has caused banks and businesses to file more SARs with FinCEN than ever before.  This increase inevitably means that more people and businesses will be swept up into investigations for seemingly benign or otherwise well-intentioned activities.  As such, awareness of, and appreciation for, the requirements of the BSA can help people and businesses avoid unwanted and unwarranted scrutiny from federal investigators.

How a FinCEN Compliance Lawyer Can Help with BSA Defense

Hiring an attorney with professional experience interpreting and analyzing BSA statutes and regulations prior to engaging in business or processing payments is one way to protect one’s self.  Anticipating the impact of BSA rules and regulations on business transactions helps mitigate risk so that you can focus on what’s important, expanding your business.  This is especially true for certain people and businesses with elevated exposure to risk and liability for BSA violations.  They include:

  • Individuals transacting with sanctioned countries or countries with high concentrations of sanctions targets (e.g., Iran, Sudan, Cuba, Burma, Syria, Crimea, Russia, Ukraine, Zimbabwe, Belarus, Yemen, Afghanistan, Pakistan, Colombia, Oman, etc.);
  • Individuals using hawalas or saraafis to transfer money;
  • Money services businesses (MSBs);
  • International money exchangers and remittance forwarders;
  • Accountants and financial advisors;
  • Attorneys and tax specialists;
  • Local and community banks; and
  • Individuals employed as compliance officers with banks, financial institutions, MSBs, and other businesses.