This Week in AML

1/6/22 – Where Do We Go From Here?

This week was the 1st anniversary of the insurrection at the US Capitol. John and Elliot focus their conversation on what the financial crime compliance community can do to identify the monetary footprint of potential domestic terrorist acts. They discuss the recent statements by the President, Vice President, and the Attorney General and urge listeners to report transaction activity that fits the patterns of possible terrorist activity.



1/6/22 – Where Do We Go From Here? TRANSCRIPT

John Byrne: How are you today?


Elliot Berman: I'm good, John, how are you?


John Byrne: Good. I know this is our first conversation of the new year, and, you know, I know it's always [a] tradition to say happy new year, but I think this year, we're just hoping for a normal new year. I guess the way I would start off is as we are going. As we are recording today, it's January 6th.


I sat down a couple of days ago with our friend and colleague, Dennis Lormel, and asked him a number of questions about what we've learned in the past year regarding the horrific acts of January 6th. We posted that online for people to see and on social media. I thought we'd spend a couple of minutes just talking about going forward from the standpoint of the AML community because obviously, as a society, the president had very strong statements today, as did the vice-president. As we are recording, members of Congress who unfortunately were through that horrific day are recounting that. We have to understand, as the president said, the scars before we can heal, but going forward as a community that deals with financial information, suspicious activity reporting, I guess I'd highlight a couple of things.


One is, there was a story I believe it was in the Washington post [the] past couple of days that said members of the administration, they're still working on, not just what went wrong, but what we can learn from last January. One of the things that I know our community embraces is they felt there was a gap in information sharing and partnering among the agencies. I know that's something that when that works, it helps all of them.


Elliot Berman: Yes, absolutely. It's been a theme and other things. I mean, going all the way back to the 9/11 commission report. We talked a lot about 9/11 last fall, with the 20th-anniversary information sharing among intelligence agencies was a key takeaway coming out of there.


So, when we have these events, often, we find out that the mechanisms for sharing what we did know going into them either were broken or had never been built.


John Byrne: Right. Yeah. You know, if there's any sort of positives that we've seen in the past couple of days in terms of reporting. I've seen some reports. Well, one, we already knew that the FBI has sort of reemphasized domestic terrorism as a priority. It is a priority from the FinCEN list that we saw back in June, but also, there were no deaths in 2021 from domestic terrorism. So even the experts that have been critical of the responses of law enforcement administrations, what have you, have said that's the good news.


So, I think there's something to be said for that. I think the challenge, though, is they all say, is trying to predict maybe is the wrong word, but trying to be proactive, for those that are becoming radicalized. That's where Dennis comes in, and he talks a lot about that in our, in our conversation.


But also, I think from our standpoint, you know, the AML professionals, you give us more guidance and direction and red flags, we're better equipped to report at least what we see financially, right?


Elliot Berman: Yes, and every one of these events also has some kind of financial footprint, again, going back to Dennis and his insights about 9/11, that, in what ultimately became TFAS.


You know when he was asked, he said, who's looking at the financial side of this. It wasn't a standard part of the law enforcement analytics at the time, but certainly, 20 years later, it is. For those in the community, we've been looking for the patterns and typologies, and red flags and tip-offs, related to both international terrorism but now for a while on domestic terrorism. So, the more that can be shared with the public, the more it shines a light on things. It's hard to do nefarious things and plan nefarious things in the bright light of sunshine.


John Byrne: Right. Unlike 9/11, you know, now there's social media, there was the internet then, but now there are really ways that people are going to be out there, in the open, that'll be noted.


So I think it won't be ignored. I won't say it was ignored before, but obviously; it wasn't considered as the same severity as perhaps it would be today. So that's good. I read a quote from some former DHS types [who] have said that the biggest change between administrations is that this one has actually not acknowledged that far-right terrorism is a thing. Now that's a very general and broad statement, but I do think that we do have access to more information than we did before. The fact that you know, again, going back to the priority list from June, I think we can look for and welcome more direction. When cases are brought, I also think some of the cases that are being prosecuted now for what I would call the terrorists on January 6th can give us, as you say, give us typologies, give us some direction. As we learn, when we see a trafficking case, or we see an elder abuse case. So I think we just sort of put that in the same bucket. It'll just make us more prepared. I'll ask you, this sort of, as a final thing, I know we have to navigate privacy, small P I would say privacy with, suspicious activity, which we always do.


I think our community does it pretty well, but this is a space where people have to get away from the notion that everything said is first amendment protected. Not that you questioned that statement. Cause there is the first amendment as broad as it should be, but we have to understand when people would become radicalized.


I think if you notice that and you look at their financial footprints, sometimes you put two and two together, and it might not be illegal, but it could certainly be suspicious.


Elliot Berman: Yes. Yeah, I mean, we can't do a 5, 6, 7, 8 minutes on the first amendment because of its breadth and complexity, but you and I are both lawyers by training.

What we, what I can say in 15 seconds is that the first amendment is not so broad as to allow any speech.


John Byrne: Exactly.


Elliot Berman: That is clearly not the case. The idea that as a result of that, anything anyone says becomes unreportable, whether that's, you know, in a suspicious activity report or in other media or reporting mechanisms is, is just not accurate.


I think it's important law enforcement continues to do investigations and, to the extent that the community can provide through the existing reporting mechanisms, assistance where appropriate, where they have a real, you know, suspicious situation, that it's the right thing to do.


The effective thing to do to support the efforts of law enforcement, and you know, me, John, I'm not a big flag-waver, but it, it really is the patriotic thing to do. The word patriot has been thrown around a lot in the last year and a half too. I think it's been co-opted and, you know, preserving our democracy, which is a pretty amazing thing, really is what being a Patriot is all about.


John Byrne: I agree with that, I guess. The last thing I'll mention [is] Attorney General Garland's speech the other day, where basically they said, look, we're moving slowly, but we're moving slowly with a purpose. In terms of holding people accountable, we will learn more as the year goes through from the January 6th commission and all those sorts of things.


So, watch this space. Obviously, our community could do a lot here. Our point in just having this conversation is we can't add to all insightful comments that have been made the past couple of days. But what we can say is this is time for us as a community to step up. I know we will do that, and we'll stay on it here.


Elliot Berman: Yes. So, I will talk to you next week. I'll do the shameful plug for our podcast series. If you enjoyed this podcast and our other AML conversations interactions, please find us on Spotify or Apple Podcasts or wherever you get your podcasts. And John, when's our next webinar?


John Byrne: Well, we have a couple in January, but the one I wanted not to highlight but point out because it's a little different than what we've done before. We're going to be working closely with the ACAMS DC chapter to do a program on January 24th on gaming in AML. So, I think you're going to find that particularly insightful. I know we're also doing one in January, Elliott, that deals with transaction monitoring. Another issue that our clients have cared deeply about.


Elliot Berman: Yep. John, I will speak to you next week.


John Byrne: Take care of yourself. Stay safe.


Elliot Berman: You too. Bye-bye.