In AML Surveillance

As a leading source of news on compliance issues, BSA News Now is published on a daily basis and distributed to over 10,000 readers from fifty four countries. Our editors are constantly monitoring what’s trending on AML topics and the following areas stand out during this month:

Health Care Fraud is still a problem that needs to be identified and reported – Recent cases indicate that the perpetrator of the fraud can be at any level inside or outside the healthcare organization. Financial institutions need to be aware that in addition to the usual fraud and abuse cases, law enforcement is reporting an increase in “medical identity theft”, where a person misuses another person’s identity to wrongfully obtain medical services or funds. Federal regulations indicate that the proceeds from unlawful activities are also prosecuted under the money laundering statutes.

Even if you have not had compliance problems in the past it doesn’t mean you will not have them in the near future – On June 1, 2016, the Securities and Exchange Commission (SEC) charged a broker-dealer in a stand-alone action for failing to file suspicious activity reports (SARs) as required by the federal securities laws and the Bank Secrecy Act (BSA). A SEC investigation found that Albert Fried & Company failed to file Suspicious Activity Reports (SARs) with bank regulators for more than five years despite red flags tied to its customers’ high-volume liquidations of low-priced securities. While the SEC has charged other firms with anti-money laundering failures under the federal securities laws, this is the first case against a firm solely for failing to file SARs when appropriate.

The Panama Papers fallout will continue to impact anti money laundering compliance operations in financial institutions – Recent articles have indicated that the number of shell companies identified as a result of this investigation is over 200,000 and that there are hundreds of thousands of people behind these companies, including international political figures, business moguls and celebrities. The inherent risks in doing international business and/or processing international transactions have increased exponentially from these leaked documents. Your financial institution needs to be prepared to show examiners that there’s a robust due diligence and investigation process in place that is capable of identifying these companies and the associated names.

If you were planning on taking those well-deserved vacation days this summer, you may need to revisit those plans – The recent Beneficial Ownership and Customer Due Diligence Requirements published by FinCEN on May 11, 2016, are keeping all compliance officers busy this summer. Even when mandatory compliance is not expected until May 11, 2018, examiners will expect that affected financial institutions have an action plan to implement these requirements. In addition, the final rule also added other financial institutions to the “covered” institutions. These new players need to begin implementing these changes as soon as possible.

Mr. Dominic Suszek is an experienced and successful executive with broad experience in bank operations, audit, information technology, and regulatory compliance. As a senior executive involved in all aspects of regulatory compliance, with more than 25 years of banking expertise in operations, technology, security, fraud and compliance, he has acquired extensive knowledge of the requirements from many regulatory agencies in the US, the Caribbean, along with Central and South America.
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