COMPLIANCE
BSA scofflaws and
black boxes
Advances in technology ― employed in processes ranging from transaction monitoring programs at banks to even security screening systems at the airport ― are making it easier to detect and apprehend low-level financial criminals when they make their inevitable mistakes . Although the names of those involved have been changed , some examples of real-life schemes gone wrong can be found below .
Keith earned his living as a small business owner who primarily catered to his ethnic community . As in many similar immigrant enclaves , most of his business was conducted in currency . Not much of that was ever recorded or reported for tax purposes . The amounts were simply not large enough to attract any serious Internal Revenue Service investigative scrutiny .
Keith was successful enough that he considered buying a home . Keith discovered that he would need to improve his outward financial appearance to qualify for a mortgage . The haphazard way in which Keith started to deposit some of his cash hoard aroused enough suspicion for a suspicious activity report ( SAR ) to be filed .
Earnie was a banker . A group of his customers who socialized together approached Earnie and solicited him to take on a side job of regularly transporting suitcases of cash to a small bodega in New York City that was fronting as a money services business . Earnie was compensated well enough for him to consider his investment options with this extra cash . While Earnie ’ s money mule activities never seemed to attract any suspicions , his financial activities with his side earnings did .
Jeff ’ s self-made landscaping business was doing better than he reported when he filed for bankruptcy . He had pulled out some cash from the business and gave it to his mother to hold for him
until the bankruptcy proceedings were concluded . Jeff ’ s mom tried to smuggle that cash out of the country , but the bulges that it created in her garments resulted in her being stopped and questioned by authorities at the airport .
In the world of law and order , dealing with scofflaws is certainly nothing new . Major culprits are regularly apprehended as the result of routine traffic stops . If you are engaged in felonious activities , paying attention to traffic laws becomes more of a nuisance than an actual concern .
Such may be the same in the world of Bank Secrecy Act ( BSA ) scofflaws . Technology-enhanced anti-money laundering ( AML )/ BSA monitoring systems have essentially become the patrol cars safeguarding the financial highway . The tangled web of financial activities that criminals weave is now as easy to spot as a speeding sedan weaving in and out of traffic . Although the original intent of the BSA may have been to help root out major organized financial criminals ― fraudsters and thieves ― it was inevitable that same effective monitoring would also aid in identifying low-level cheaters who regularly skirt the law whenever and wherever their money moves might be noticed by tax collectors or others . What were rarely identifiable and hard to document “ hand-to-hand ” transactions are now permanently preserved in “ peer-to-peer ” records often including incriminating notations , emojis and texts .
On real highways , there seems to exist an accepted societal norm that one needs to drive more than 10 mph over the limit before a person is considered to be “ actually speeding .” On the financial roadways , there may be a similar analogy when considering AML / BSA monitoring and enforcement efforts . Lies , misrepresentations and even perjury about money are routine and quite common in daily life ― up to and including court activities . Consequences for those lies are more often left up to
42 acamstoday . org