ACAMS Today Magazine (March-May 2011) Vol. 10 No. 2 | Page 40

PRACTICAL SOLUTIONS Before – and After – You Start Talking to Law Enforcement Important tips from the lawyers E veryone recognizes the importance of cooperating with the law enforcement community and appreciates how even a small bit of information may provide the crucial detail that helps solve a crime or prevent a terrorist act. • However, if you decide to pick up the phone to call law enforcement, you want to ensure that you are not creating any unwanted problems for your institution — and possibly yourself. For inside advice on how to avoid such consequences, I solicited the views of two of my partners: Ted Planzos who served as an assistant district attorney in Bronx County, N.Y., a special assistant U.S. attorney and the deputy chief of the Organized Crime and Racketeering Section at the U.S. Department of Justice; and Sam Rosenthal, who was a former assistant U.S. attorney and headed the Criminal Appellate Section of the U.S. Department of Justice. Ted recently represented Pamrapo Savings Bank in its negotiations with the Department of Justice and federal regulators. Sam has represented a number of banks and money transmitters in criminal proceedings before federal and state prosecutors. • Here is a list of pointers we developed for your conversations with law enforcement. • Circumstances will dictate. We all agree that your communications with law enforcement will depend on the circumstances, including whether you have information about a customer or one of your employees, whether an investigation has already begun and what the nature of the information is. For example, if the information relates to an unfolding criminal or terrorist act involving bodily harm or destruction of property, you likely will be asked to respond with details more quickly than if the information relates to a prior violation with little or no ongoing significance. • Cooperation is the best policy. The Federal Sentencing Guidelines make clear that full cooperation with law enforcement is a factor considered by prosecutors in charging a corporation with money laundering or aiding or abetting in money laun40 • • ACAMS TODAY | MARCH–MAY 2011 | ACAMS.ORG dering. Should an employee be involved or the institution otherwise implicated in the activity, cooperation will be an important mitigating factor for the prosecution and the judge at sentencing. You may be required to call. Financial institutions should notify law enforcement by telephone if the matter requires immediate attention (you also may be required to call your regulator). The FFIEC BSA/AML Examination Manual states: “for situations requiring immediate attention, in addition to filing a timely SAR, a bank must immediately notify, by telephone, an “appropriate law enforcement authority” and, as necessary, the bank’s primary regulator.” Be brief. Ted suggests the best strategy is to keep the conversation brief. “You only need to tell the investigators that a SAR filing has been or will be made. They can request the paper.” Sam notes that “any conversation with law enforcement is a significant event whether you call to report concerns about a customer or an employee of the institution. Everything you say becomes evidentiary.” This means that the information you provide law enforcement in a conversation could possibly be used against the institution at a later date. Disclose the SAR if requested and offer it when appropriate. The new SAR disclosure regulations published in December 2010 generally prohibit the disclosure of a SAR. However, the regulations provide an important exception that permits an institution to disclose to federal, state and local law enforcement that a SAR has been filed or facts that indicate the existence of the SAR as long as the disclosure is not made to a person involved in the suspicious transaction. The new regulation also permits the institution to provide a copy of the SAR to law enforcement. A subpoena may still be required. The new SAR disclosure regulations make clear that a SAR can be disclosed to law enforcement without a subpoena. However, while the regulations permit disclosure of the underlying facts, transactions and documents upon which the SAR is based, the regulation does not appear to eliminate the need for a subpoena should law enforcement request the underlying documents. • Keep your legal counsel’s number close. Whether you rely on inside or outside counsel, you should not hesitate to consult with your counsel if you have any doubt about whether you should contact law enforcement or what should be said in the conversation. For example you may consider consulting with counsel as to whether a subpoena is required if law enforcement makes a request for t H[