part iv. money service businesses another money laundering trend
TRANSCRIPT
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Part IV
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MONEY SERVICE BUSINESSES
Another Money Laundering Trend
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MONEY SERVICE BUSINESSES
• Since the passing of the USA PATRIOT Act (October 2001), ICE has initiated 404 investigations of 18 USC
1960 (Prohibition of Unlicensed Money Transmitting Businesses) violations
resulting in:• Arrests: 201
• Indictments: 194 • Seizure of: over $50,000,000
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ICE Financial Investigations Tools / Authorities
Section 373 of the USA PATRIOT Act amended 18 USC 1960 by providing 3 ways an Illegal Money Service Business (MSB) can be prosecuted:1) MSB operating without a state license*2) MSB operating in violation of Treasury regulation requiring
registration with FinCEN3) MSB knowingly transfers money derived from a criminal
offense, or transfers money intended to be used for unlawful purpose. Investigator does not need to trace the money *Knowledge requirement removed; not necessary to prove target knew license was required or operating without a license was a crime.
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ACCESS INC. OF USASAC Newark
Unlicensed Money Service Business
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ACCESS INC OF USASAC Newark
ICE SAC Newark conducted this investigation, in conjunction with the IRS, based upon the filing of 4 SARs on Access Inc. of USA, a licensed MSB operating in New Jersey
Although Access Inc. of USA was a licensed MSB, the owners and operators of the MSB conspired with 4 unlicensed money remitters (couriers) operating out of New York to commit the criminal acts
The 4 couriers brought large sums of cash to the MSB that were deposited into the MSB’s bank accounts and then wired to the Middle East
Overview
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ACCESS INC OF USASAC Newark
Investigative findings:
MSB not open to the general public
MSB operated with a very limited number of clients, yet made over $100 million in cash deposits within 30 months
MSB owners failed to file CTRs for cash deposits made by their clients
MSB prepared fraudulent records to evade their CTR filing requirements
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6 arrest warrants, 4 search warrants, and 4 subsequent consensual searches
Subjects charged with: 18 USC 1960 (Prohibition of Unlicensed Money Transmitting Business)
31 USC 5312, 5313, 5324 (Failure to File CTRs)
18 USC 371 (Conspiracy to Fail to File CTRs)
4 convicted of 18 USC 1960 / 18 USC 2
Approximately $200,000 seized
ACCESS INC OF USASAC Newark
Results
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ACCESS INC OF USASAR HIGHLIGHTS
Information included in SARs filed by institutions: CTRs were filed on MSB’s cash deposits totaling $751,000 between January 2001 and March 2001
Amounts matching above deposits were immediately wired to Pakistan and the UAE
An unidentified employee attempted to deposit over $10,000 cash
Employee refused to provide identification when requested by bank official
Bank contacted MSB owner and advised of BSA regulations and bank policy
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ACCESS INC OF USASAC Newark
Frequent and large cash deposits
Immediate wire transfers to personal accounts in countries of concern
Attempts to structure cash deposits
Customer’s refusal to show identification
Red Flag Indicators (SARs)
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MSB’s appearance inconsistent with usual and customary business practices
Located in upstairs apartment of converted house
Access to business via unmarked rear door
Door to business kept locked at all times
Business name not displayed on building
Non-published telephone number / Not advertised in yellow pages
ACCESS INC OF USASAC Newark
Red Flag Indicators (Investigation)
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ACCESS INC OF USA(front view)
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ACCESS INC OF USA(back view)
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ICE / Cornerstone Website
www.ice.gov/cornerstone
Cornerstone Report - an ICE quarterly publication that provides information on financial crimes and current trends identified by both law enforcement and the private sector. The Cornerstone Report can be accessed at www.ice.gov
To Contact the nearest ICE SAC office:Go to www.ice.gov - Investigations / Contact Information
A overview of the Financial and Trade Investigations Division, including; Cornerstone Initiative; Financial Crimes; Red Flag Indicators; Commercial Fraud; IPR Center; How You Can Help; and quarterly editions of the Cornerstone Report can all be found at:
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Special Agent Name
Contact Information LocationDate