Bank Secrecy Act OFAC FinCEN

Transcription

1 Bank Secrecy Act OFAC FinCEN 2017 CREDIT UNION EMPLOYEE TRAINING Financial Crimes Identify Track Report Common BSA Acronyms CIP CDD CTR SAR FinCEN OFAC Customer Identification Program Customer Due Diligence Currency Transaction Report Suspicious Activity Report Financial Crimes Enforcement Network Office of Foreign Assets Control 1

2 FinCEN adds 5 th Pillar CDD Customer Due Diligence Beneficial Owners & Legal Entities INCLUDES: Corporations Limited Liability Companies General Partnerships DOES NOT INCLUDE: Sole Proprietorships Unincorporated Associations Risk-Based Procedures Begin At Account Opening Understand nature & purpose Conduct ongoing monitoring to identify suspicious transactions Maintain & update member information 2

3 Sample Questions to Ask at Account Opening Will you be using this account to manage your personal finances? Do you expect to receive ACH deposits, if so what is the frequency and amounts? Can we set you up on direct deposit or will you be depositing your paychecks in person? Do you expect to make regular cash deposits or withdrawals, and if so what amounts can we expect? High Risk Member Reports to Review Funds Transfer Reports Large Item Reports Monetary Instruments NSF/Kiting Reports Significant Change in Balance Loan missing 1 st or 2 nd payment Paid off quickly with cash CDs Cashed Early OFAC Compliance New accounts Joint owners Beneficiaries 3 rd party wires All members on a regular basis IAT 3

4 FinCEN Update: Treasury Acts to Increase Economic Pressure on North Korea and Protect the U.S. Financial System June 29, 2017 What steps should your credit union take when you get an OFAC hit? Currency Transaction Report $10,000+ Cash Deposits Withdrawals Cash Exchanges 15 days to file Include joint owners on deposits 4

5 Are you required to file a CTR when a member deposits $9,500 in cash into his checking account and his joint owner deposits $750 into the savings account on the same day? Husband deposits $6,400 into wife s business account and $3,000 into their personal account. Wife comes in 1 minute later and deposits $1,000 through Shared Branching into their joint account at a different credit union. What do you file? NEW - CTR Changes August 2017 Part I Renamed item 2d from Courier Service to Common Courier Part II Added a checkbox to Item 24 to reflect Shared Branching Part III Transaction Location additions: Unknown option to Item 29 Primary Federal Regulator Unknown checkbox to Item 32 EIN Item 37 Country Item 41 Cash in amount for transaction location Item 42 Cash out amount for transaction location Part IV Filing Institution Contact Information information on institution filing CTR 5

6 Suspicious Activity Reports BSA Violations Money Laundering Structuring Source of Funds Illegal Activities Fraud Kiting Counterfeit Instruments Member is a Victim Scams Identity Theft Elder Abuse SAR Information Is Confidential Penalties for Disclosing a SAR Individuals Civil maximum $100,000 Criminal max $250,000 and/or five years in prison Credit Union $25,000 per day for each day the violation continues 6

7 SAR Reminders Report to Board File within 30 days of suspicious activity. Re-file every 90 days Member considered high risk. Monitor account for 90 days Support documentation must be kept for 5 years Contact Law Enforcement if SAR activity continues It s NOT unusual She does it all the time! 7

8 Tax Refund Fraud Don t Forget to File SAR Multiple direct deposit (ACH) refunds going to one account One individual with multiple parties to negotiate tax refund checks Individual trying to negotiate double endorsed refunds with questionable identification Account opened on behalf of member not present, with joint having signatory authority (elder, minors, prisoners, disabled or recently deceased) Money Mule Operations are Increasing Suspicious 8

9 2017 Supervisory Priority Focus for NCUA Debt Collection Imposter Scams Identity Theft Prizes and Lotteries Shop at Home Auto-related Has anyone NOT received a spam text, or call in the last week? 27 million Americans lost approximately $7.4 billion to telephone scams alone 15.8 spam calls and 6.3 spam texts messages received in an average month TrueCaller, 2015 Survey The Targets Technology Phone, , text, online banking, websites, mobile, social media Credit Union Obtaining data through weakest links authentication, employees & member Transactions New accounts, wires, checks, cards, loans Members Romance, work from home, lottery prize winner Fraudsters are crafty. Their innovative, multichannel approach pressures targeted victims to make important decisions on the spot. Always looking for victims who find the fraudster s schemes and stories convincing. 9

10 Phishing Attacks Attempt to acquire information by masquerading as a trustworthy entity Recipients are enticed to click on an imbedded link or open an attachment Typically distributes malware User names, passwords, credit/debit card details Captures banking login info and transfers funds out of account Dear credit union member, There has been an error on the credit union server and your Internet login details have been lost. As a result, you have no access to Internet banking. More importantly your account is no longer secure. Please click on the link below and follow the instructions to restore access. You will be asked to provide your Internet bank details. TrustMe Federal Credit Union You Have a Secret Bank Account Here s how to Use It Every American has a secret account at the Federal Reserve Bank Instruct naïve consumers how to pay their bills, using routing numbers, account number Report any incidences to RTN.fraud@ny.frb.org 10

11 Identity Theft Heats Up $16 billion was stolen from 15.4 million American victims in 2016 DARK WEB Black Market $12 - $15 for Track I and II credit card information $30 for complete identity packages 6% of an account balance for online banking credentials Javelin Strategy & Research Looking to buy a new car? Do I have the deal for you! Sweetheart Scam 11

12 Fraud Awareness Document I am requesting to withdraw by cash, official check or wire transfer $xx,xxx for the purpose of:. I have been advised by the credit union that the purpose of this transaction may be for fraudulent or suspicious activity. I have been informed of the possible scam and wish to proceed with the withdrawal knowing that I may not be able to recover the funds, if I proceed with the transaction. Member Signature Date Employee Witness Elder Financial Abuse Fastest Growing Crime of the 21 st Century - $36 Billion Taking money or property Using coercion to sign legal documents Using property or possessions without permission Confidence games Typical Victim of Elder Abuse Female Age Frail Cognitively Impaired Federal Reserve Consumer Compliance Outlook Newsletter 12

13 Red Flags You May See Signatures seem forged or unusual Check numbers are out-ofsync Member states that money is missing from their account Request statements be sent to another address Flurry of bounced checks Increased credit card activity Excessive cash withdraws ATM activity when you know member cannot leave home Accompanied by 3 rd party, and may not allow member to speak Changes in POA, new names added to signature card Member has no knowledge of newly issued ATM, debit or credit card Member is confused about account balance and/or transactions Financial Abuse Can Happen to Anyone Cyber crime involves a computer and a network. FinCEN further defines a cyberenabled crime as illegal activities, such as fraud, money laundering, or identity theft, carried out by electronic systems and devices. 13

14 Cheryl Oggs, BSACS Vice President Mississippi Credit Union Association ext Direct 14