Meet The Enforcers Financial Crime Prosecutors

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1 13 th Annual FIBA AML Compliance Conference Adam S. Kaufman (Moderator) Partner, Lewis Baach Kaufmann Middlemiss Pllc Speakers Deborah M. Morrissey Assistant Special Agent in Charge, Financial Division, ICE Homeland Security Investigations Miami Jaikumar Ramaswamy Chief Asset Forfeiture & Money Laundering Section U.S. Department of Justice - Criminal Division Joan M. Silverstein Chief Economic Environmental Crime Section, US Attorney s Office FL Southern District Polly Greenberg Chief, Major Economic Crimes Bureau, NY County District Attorney s Office Richard Weber Chief, Internal Revenue Service - Criminal Investigation February 14, 2013

2 Overview of Enforcement Efforts Introduction to US system: criminal v. regulatory, state v. federal, issues arising from multiple jurisdictions, investigating the same conduct (both domestically and internationally) How International Investigations Work How US Prosecutors Work with Overseas Law Enforcement - Evidentiary Issues, Practical Problems How Prosecutors Approach Cases & Use SARs Cases and Typologies of Criminal Conduct Lessons for Banks: What happens when systems alert transactions? Looking at clients, across multiple business lines? Looking for patterns and anomalies across multiple accounts? Using open source materials? Employing real analysts or a check the box and close it out mentality? Emerging Shift from Bank as witness / repository of records to Bank as defendant: Intentional misconduct and BSA failures as the basis of criminal investigations.

3 Compliance Failures as Criminal Conduct HSBC is being held accountable for stunning failures of oversight and worse that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and to facilitate hundreds of millions more in transactions with sanctioned countries. The record of dysfunction that prevailed at HSBC for many years was astonishing. Assistant Attorney General Breuer, Chief of the Criminal Division, U. S. Department of Justice Today we announce the filing of criminal charges against HSBC, one of the largest financial institutions in the world. HSBC s blatant failure to implement proper anti-money laundering controls facilitated the laundering of at least $881 million in drug proceeds through the U.S. financial system. Loretta Lynch, U.S. Attorney for the Eastern District of New York Press Conference Announcing HSBC Deferred Prosecution Agreement Brooklyn, NY December 11, 2012

4 Richard Weber Quotation Banks are the first layer of defense against money launderers and other criminal enterprises who choose to utilize our nation s financial institutions to further their criminal activity. When a bank disregards the Bank Secrecy Act s reporting requirements, it compromises that layer of defense, making it more difficult to identify, detect and deter criminal activity. In this case, HSBC became a conduit to money laundering. The IRS is proud to partner with the other law enforcement agencies and share its world-renowned financial investigative expertise in this and other complex financial investigations.

5 13 th Annual FIBA AML Compliance Conference Questions Adam S. Kaufman (Moderator) Partner, Lewis Baach Kaufmann Middlemiss Pllc Speakers Deborah M. Morrissey Assistant Special Agent in Charge, Financial Division, ICE Homeland Security Investigations Miami Jaikumar Ramaswamy Chief Asset Forfeiture & Money Laundering Section U.S. Department of Justice - Criminal Division Joan M. Silverstein Chief Economic Environmental Crime Section, US Attorney s Office FL Southern District Polly Greenberg Chief, Major Economic Crimes Bureau, NY County District Attorney s Office Richard Weber Chief, Internal Revenue Service - Criminal Investigation February 14, 2013