Banks reviewing federal clarifications of reporting laws
County banks, often subject to money-laundering questions, should be more clear
on some procedures thanks to explanatory notes provided a month ago by a government
Financial Crimes Enforcement Network issued guidance and advisory notes April
26 for money services nationwide - clarifications at least one banker in Miami-Dade
County helped request.
network requires banks to report deposits of more than $10,000 as well as "any
other suspicious financial activity."
US Department of Treasury subdivision listed Bank Secrecy Act obligations that
form part of the complex matrix financial institutions must navigate in the
wake of 9/11.
need guidance," said Miriam Lopez, president of Transatlantic Bank. "As
a community, we've been treated more harshly than other banking centers. In
South Florida, there is a perception that we are higher-risk."
perception may come from a Bureau of Justice special report published in July
2003 that showed the region eclipsed others in money-laundering referrals in
2001, the year of the terrorist attacks.
year, 106 incidents were referred from South Florida, compared with 83 from
New York and 78 from Puerto Rico. Greater Miami is designated a high-intensity
classification has placed additional burdens on financial institutions here
from the federal Office of the Comptroller of the Currency and the Federal Deposit
been harder on banks over the past two years," she said.
National White Collar Crime Center defines money laundering as "the illegal
practice of filtering 'dirty' money, or ill-gotten gains, through a series of
transactions until the funds are 'clean.'"
has cleaned up its reputation as a money-laundering hub, one security expert
are obvious geographical and cultural influences given its nexus to Latin America,"
said Tom Cash of Kroll Inc. "Banks down here have been through the ringer.
They may be more alert to money laundering, and a number have been slapped with
cease-and-desist orders. If you look at recent grievances, it is banks such
as the Bank of New York or Banco Popular de Puerto Rico that have most recently
Cash said there have been significant improvements in bank procedures here.
"That's not to say that everyone has found Jesus and we're all saved,"
he said. "Prior to 9/11, a lot of the activity was drug-related, but felons
are looking at more creative mediums now."
said that during the past five years, a number of large financial scandals leading
to indictment have had a money-laundering element. Discovery of the wrongdoing
had been accidental in many cases.
of those were cases the agencies came across by chance," said Mr. Cash.
"After the bank accounts are subpoenaed during investigations, money laundering
comes to light.
banks are synonymous with high risk for customers," he said. "A fraud
case in Boca Raton uncovered money-laundering activity."
financial institutions that were caught had taken a chance on a politically
exposed person, he said. "If banks take on high-risk persons," said
Mr. Cash, "then when the accounts of felons are examined, they'll be traced
cited a bank in Chile that counted Gen. Augusto Pinochet among its customers
and Citibank, which held an account for Raul Salinas, brother of former Mexican
president Carlos Salinas.
had knee-jerk reactions to the Patriot Act, he said. "Banks are not taking
risks and are in danger of filing too many reports," said Mr. Cash. "Then
they submit something akin to a New York telephone directory. Some are using
are engaging in defensive filing," said Ms. Lopez. "It has been bothersome
for the Financial Crimes Enforcement Network because it's difficult for the
unit to weed out the suspicious from the unsuspicious. It's also a costly process.
The money devoted to being compliant could be better used to serve the community."