HSI SAC Newark NJ Kelly Polson & Terri Quintana Cornerstone Outreach Program

Transcription

1 Homeland Security HALF PHOTO SLIDE PAGE TITLE FOR QUOTES AND SUCH HSI SAC Newark NJ Kelly Polson & Terri Quintana Cornerstone Outreach Program

2 Homeland Security Legacy HSI investigates customs, trade and immigration crimes, smuggling of narcotics, weapons and other types of contraband, human trafficking and smuggling, financial crimes, cybercrimes, gangs investigations, critical infrastructure and export enforcement issues.

3 256 Domestic Offices 26 SAC Offices

4 International Footprint

5 Homeland Security Customs Officers Investigate at and away from the border Broad authority to investigate federal crime HSI Special Agents

6 Trade Travel Finance Narcotics Smuggling / Trafficking Commercial Trade and Fraud Weapons Smuggling Export Enforcement Intellectual Property Rights (IPR) Human Smuggling / Trafficking Anti-Gang Enforcement Immigration Document / Benefit Fraud Human Rights Violations Money Laundering / Bulk Cash Smuggling / Financial Crimes Cyber Crimes Worksite Enforcement/ Critical Infrastructure Protection

7 HSI focuses on the means and methods utilized by transnational criminal organizations to earn, move and store their proceeds. Methods Kleptocracy Financial Fraud Telemarketing & Mass Fraud Human Trafficking & Human Smuggling Organized Retail Crime Contraband Smuggling/ Trafficking

8 Border Search Authority Full Access to BSA s Reports Exclusive Access to Trade Data As the United States principal border enforcement investigative agency, HSI is uniquely positioned to investigate all incidents of transnational and cross-border financial crimes. HSI is the only law enforcement investigative agency that has border search authority, full access to BSA reports, and exclusive access to trade data.

9 FinCEN Participation HSI contributes to FinCEN s SAR Activity Review which highlights case where BSA information played an important role in the successful investigation and prosecution of criminal activity. HSI has a continual presence at FinCEN through the utilization of an HSI Liaison, a Special Agent and a Intelligence Research Specialist.

10 In July 2003, HSI launched the Cornerstone Outreach Program to work with the private sector in order to identify and eliminate vulnerabilities in financial systems through which criminals launder their illicit proceeds. The key is building strong partnerships and alliances by sharing law enforcement trends and methods and providing training to the businesses and industries that manage the financial systems that terrorists and criminal organizations seek to exploit.

11 Homeland Security HSI Special Agents/Program Managers assigned to HQ, publish a newsletter titled The Cornerstone Report, providing useful information on financial crimes, current trends identified by both law enforcement and the private sector, recent cases and training/outreach events.

12 How You Can Help Homeland security is more than a government responsibility it s a shared mission for all Americans. As a valued stakeholder in this partnership, there are several ways you can help to ensure our nation s security: PARTNER with your local HSI office by maintaining open lines of communication COMPLY with the Bank Secrecy Act, US PATRIOT Act and other industry reporting requirements through a comprehensive AML program REPORT suspicious activity by contacting your local HSI office by calling DHS-2-ICE SUBSCRIBE to the Cornerstone Report, HSI s newsletter devoted to financial investigations on HSI s authorities. Visit for more information or write to cornerstone@ice.dhs.gov

13 Homeland Security Bank Secrecy Act Reports Suspicious Activity Report (SAR) Currency Transaction Report (CTR) Currency and Monetary Instruments Report (CMIR) Filed by financial institutions on suspicious activity Currency transactions over $10,000 Filed by persons departing or entering U.S. or shipping or receiving C/MI over $10,000 FinCEN Form 8300 Foreign Bank Account Report (FBAR) Cash over $10,000 received in a trade or business U.S. person with financial interest or signatory interest in foreign bank accounts

14 Recommendations when preparing a SAR Begin the narrative with a summary sentence to give the reader a snapshot of what details will be discussed - Who s Involved? - Amount of suspect $ - Dates of activity - What activity is suspected?

15 Recommendations when preparing a SAR Create 1 SAR per suspected activity relevant to the subjects involved

16 Recommendations when preparing a SAR Note what supporting documents exist

17 Recommendations when preparing a SAR Please don t list all of the transactions in the summary without giving a reason. A sample set highlighting the activity will suffice.

18 Recommendations when preparing a SAR Indicate if there are employees of the financial institution that may have more detailed knowledge of the SAR being filed

19 Recommendations when preparing a SAR SARS related to correspondent account activity should include the details of all the accounts involved

20 Recommendations when preparing a SAR Include the identifying information of all parties involved

21 Recommendations when preparing a SAR If you are writing the SAR because of a look-back state that in your opening sentence. If you are writing due to a Law Enforcement Inquiry, be sure to input that Officer s Contact information in its respective field.(law Enforcement Agency Contact)

22 Recommendations when preparing a SAR Write why you think the activity is suspicious and what factors drove you to that conclusion

23 Recommendations when preparing a SAR Note other suspicious businesses or individuals that have frequent financial contact with your customer and why you think these relationships are suspect

24 Recommendations when preparing a SAR Explain how the money goes in AND how the money goes out, especially in Trade Based Money Laundering scenarios

25 Recommendations when preparing a SAR Specify the suspect amount of currency going in and out of the account $400,000 going into the account $100,000 going into the account

26 Homeland Security Recommendations when preparing a SAR If your bank has completed any site visits of the suspect.customer, enter the details of the findings in the summary

27 Recommendations when preparing a SAR If the suspect customer has a safe deposit box, note that.information

28 Recommendations when preparing a SAR If possible, when the account is closed by your bank, indicate where.the money was transferred to after the closure of the account Ending Balance: $454, Bank Check Issued to XYZ Bank for $230, Wire Transfer to ABC Bank for $224,196.00

29 Recommendations when preparing a SAR Do the deposit locations match the geographical footprint?

30 Recommendations when preparing a SAR When a SAR is generated from CTRs that aggregate to over.$10,000, note the locations each transactions occur in

31 Recommendations when preparing a SAR Please list patterns of structuring: Date Amount Location 9/1/2012 $5,600 Pequannock, NJ 9/1/2012 $4,400 Wayne, NJ 9/8/2012 $5,500 Butler, NJ 9/8/2012 $4,500 River Vale, NJ

32 Recommendations when preparing a SAR If this isn t the first SAR for the customer, please indicate the: - previous reference number(s), - previous suspicious activity dates - cumulative amounts

33 Homeland Security Case Study

34 HSBC Bank In December 2012, Homeland Security and the Department of Justice announced a $1.256 billion summary judgment with HSBC. HSBC entered into a deferred prosecution agreement for violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). A four-count criminal information was filed charging HSBC with willfully failing to maintain an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent affiliates, violating IEEPA and TWEA.

35 HSBC Bank From 2006 to 2010, HSBC failed to implement an Anti-Money Laundering (AML) program capable of monitoring suspicious transactions and activities. This included a failure to monitor billions of dollars in purchases of physical U.S. dollars, or banknotes, from these affiliates. HSBC Bank USA rated Mexico as standard risk, its lowest AML risk category. As a result, HSBC Bank USA failed to monitor over $670 billion in wire transfers and over $9.4 billion in purchases of physical U.S. dollars from HSBC Mexico during this period, when HSBC Mexico s own lax AML controls caused it to be the preferred financial institution for drug cartels and money launderers.

36 HSBC Bank A significant portion of the laundered drug trafficking proceeds were involved in the Black Market Peso Exchange (BMPE), a complex money laundering system that is designed to move the proceeds from the sale of illegal drugs in the United States to drug cartels outside of the United States, often in Colombia. In 2008, HSI New York s El Dorado Task Force identified multiple HSBC Mexico accounts associated with BMPE activity and revealed that drug traffickers were depositing hundreds of thousands of dollars in bulk U.S. currency each day into HSBC Mexico accounts. This was accomplished by analyzing Fedwire data.

37 HSBC Bank As a result of HSBC Bank USA s AML failures, at least $881 million in drug trafficking proceeds including proceeds of drug trafficking by the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Colombia were laundered through HSBC Bank USA. HSBC Group admitted it did not inform HSBC Bank USA of significant AML deficiencies at HSBC Mexico, despite knowing of these problems and their effect on the potential flow of illicit funds through HSBC Bank USA.

38 Homeland Security AML Staffing Issues

39 Become a Partner with Law Enforcement

40 Contact Information Kelly Polson, Cellular: (973) Special Agent: Kelly. Terri Quintana; CAMS, CFE Cellular: (973) Intelligence Research Specialist: