This week, John Byrne and Elliot Berman reflect on the 40th anniversary of the Money Laundering Control Act of 1986, the landmark legislation that helped shape modern anti-money laundering compliance in the United States and influenced global AML standards.
The conversation also examines a series of corruption-related developments, including investigations involving political figures in Brazil and the United States, concerns about the weakening of public corruption enforcement, and the launch of new civil society initiatives focused on accountability and the rule of law. John and Elliot explore why anti-corruption efforts remain essential to protecting democratic institutions, economic stability, and public trust.
Additional topics include leadership changes at the Egmont Group, calls for a U.S. national fraud strategy, and a multistate legal challenge seeking to restore key provisions of the Corporate Transparency Act.
40 Years of the Money Laundering Control Act, Anti-Corruption Challenges, and the Future of Financial Crime Enforcement - Transcript
Elliot Berman: Hey, John. How are you today?
John Byrne: I'm good, Elliot. Enjoyed our breakfast yesterday. It was great being in Milwaukee over the weekend. As we record this, the Brewers are up three games to one, 'cause they lost last evening. Probably 'cause I left Milwaukee and returned to Virginia . Hopefully by this time Friday, when people listen, they'll be celebrating their World Series championship.
Bottom line is, it was so much fun watching the games. We weren't able to get tickets to the games, but watching the games with other Brewer fans, like yourself, and others throughout the city. And the city's just abuzz. That was fun to see.
Elliot Berman: It is abuzz. And for those who've been watching the games on TV, from Florida, you can see that a major contingent of fans went down to see the games in person.
My son-in-law and some friends of his flew down and saw game three, and said it was a wonderful experience. Very exciting for the city. And and I agree with you. Hopefully by the time people hear this, they'll be the World Series champions for 2026.
John Byrne: Yeah, you don't want seven games if you can avoid it.
Elliot Berman: I'd like to avoid seven games, but, we'll see.
John Byrne: Sure. Like always, a lot going on, especially here in the United States, but also globally. But in the United States, we have a week till the midterms and for those of you outside the country, I'm sure you're well aware of how important that process is in terms of oversight and other issues.
We will talk about a few alleged corruption activities. But I thought I'd start with over the past several days in Brazil Flavio Bolsonaro, the son of the convicted former president of Brazil, lost his attempt to ascend to the presidency. And not only that, but the Supreme Court in Brazil voided his passport because he faces mounting fraud and money laundering probes.
He was able to leave the country even though they voided his passport, so he fled across the Argentine border, which you do when you're innocent, of course. Now, as of this recording, he's in Florida. What a shock.
So that's going on, and then separately, as we record this, there was a report that the Brazilian Supreme Court has ordered the Brazilian Federal Police, this is separate, but this is relevant to the election, to investigate potential illegal foreign campaign assistance and ties between a firm called The Rockbridge Network, co-founded by JD Vance in 2019, and the presidential campaign of Bolsonaro.
The network does deny involvement and claims that the Brazilian entities have misrepresented their connection. But that is going on also as we speak. Just another example of fraudulent potential illegal activity by a candidate or an office holder, and as I said, fled across the border and we are giving him some protection, in the United States.
Elliot Berman: Yes, there are a number of reports that the State Department will be granting Balsanero and his family visas. But even though they entered the country without a passport, he'll be here for a while.
So let's do a little history. This week we reach the 40th anniversary of the adoption of the Money Laundering Control Act of 1986. Much of what you and I have experienced since then in our professional work, and many of our friends and colleagues in the community, a lot of what we think about every day really comes out of the Control Act, so I know you wanted to talk about that a little bit.
John Byrne: Yeah just a little bit. The statute was a reaction to a couple things. A presidential commission on organized crime in 1984 looked at the movement of illicit funds and recognized that there was no clear criminal statute to prosecute what people had been calling money laundering for decades. And after a series of hearings, including the infamous coverage of the Bank of Boston penalty situation, go back and look there.
As a lawyer working for the American Bankers Association, I can recall very specifically the CEO of the Bank of Boston, a guy by the name of Bill Brown, testified and was asked about filing reports and activities, and gave the committee such snarky answers. I could tell even way back then, being new to all of this, that we were in for a rough ride in terms of legislation, which is what happened.
But, a quick thumbnail sketch of the Money Laundering Control Act in '86, which was part of a massive anti-drug bill, ... and many anti-drug bills were passed throughout the '80s and early '90s. But this particular section of the bill, the Control Act section, made money laundering a prosecutable federal offense, mandated civil and criminal penalties for violating the BSA, and created the crime of structuring transactions. And also gave the regulators direction to require institutions to develop and maintain BSA procedures and compliance policies.
And as I posted on LinkedIn a couple days ago at the ABA we then, because that was in '87 right after the regs were final, we did road shows around the country, and trained over 1,000 bankers. We would get 300, 400 bankers at a Holiday Inn somewhere near the, Chicago airport or whatever.
An all-day programming where we walked through the regs, the law, and all of that. We had support then, as we do now, from IRS:CI, lawyers and advisory firms. In those days, training was not online, it was not done with AI. It was in-person training. So I remember that pretty vividly.
Everybody talks about the Patriot Act, but none of that would've been built upon were it not for the Money Laundering Control Act. A few of us still doing this were around back then, but that was the first time banks were told, "You're gonna be part of law enforcement." There was some pushback, but at the end of the day, I think the banking industry, I won't say they embraced it, but they certainly worked closely with our public sector partners to make the best of a situation where they knew there needed to be laws and regulations
Elliot Berman: another thing that came out of the Control Act was the authority for criminal and civil forfeitures related to these offenses. And that's been a very valuable tool for law enforcement and the government more broadly. It also put the US, as one of the first countries to criminalize money laundering, and that really helped shape what came afterward.
FATF, I wanna say, was established in, I think it's 1989. And started working on the, the, the global standards. And the Control Act was part of the foundation on which a lot of that was built. It's interesting to find ourselves 40 years later, and it's not perfectly clear that we're as committed as a country to all the things necessary to really deal with the risks of money laundering and other financial crime.
John Byrne: Yes. That's right. Going back to alleged corruption, there's a new book out and a follow-up Vanity Fair article. The book is by an author Matthew Cole. The book is called Princes and Thieves, and was published by Vanity Fair. But it's a book as well as a lengthy article.
And this does a number of things. It ties Jared Kushner to $2 billion in secret foreign accounts, according to the story, which again, Kushner denies, by the way. Dutch intelligence reportedly watched his phone screen as he logged in to a UAE account holding hundreds of millions of dollars. Cole breaks down the disclosures, the foreign agents, and the various bribery laws that came out of this.
This report goes into detail about that, about how the money moved. According to the reporting, in late 2017, Dutch military intelligence learned that a Russian GRU hacker was heading to England, and the British agreed to help catch him. The Dutch gave him a choice between working for them and going to a British prison. He chose not to go to prison.
So they then gave the Dutch access to a GRU server in Russia, where they found screenshots of Kushner's iPhone. You should both read the article in Vanity Fair. Cole has been on various talk shows talking about the book. There's actually a really interesting sit-down with Jon Stewart at The Daily Show. A 25-minute interview with Cole where Stewart sort of pushes back on some of what's there.
Again an interesting angle regarding somebody who, let's face it, Kushner does not have foreign policy experience, but he's been labeled a diplomat because his father-in-law is President of the United States. That's not a critique, that's a fact. But he's made billions of dollars, so the question is how, why, and where?
And I think this makes sense to take a look at. And so before I ask you to comment, Elliot, I wanted to say to be bipartisan here, I also want to mention that last week a Virginia state senator, head of the Virginia State Senate, was indicted in connection with a marijuana business. But it's a long-running corruption investigation into a family-run business. That's in the Washington Post, so take a look at that as well. But my point is, corruption wherever it sits, there needs to be laws and regs, and there needs to be investigations
Elliot Berman: Yes, and we have seen early in the current administration, the public corruption section in the Justice Department reduced from a sizable staff with wide-ranging authority to investigate and prosecute to a fraction of the old staff and very limited authority granted to it by the attorney general.
Forgetting who may be acting in a corrupt manner. As we know from looking at the Corruption Perception Index and many other sources, corruption not only lines the pockets of people, it corrodes the rule of law and it corrodes economies. And that affects everybody.
I think anti-corruption shouldn't be a partisan issue. But it has seemed to have evolved that way recently.
John Byrne: And just to be current with other activities, there's a group of former federal prosecutors and human rights lawyers that are coming together to investigate political corruption. It's a nonpartisan, nonprofit organization called the Rule of Law Project, and their mission is to gather facts and present cases either to state or local prosecutors, or to future Justice Department they hope may operate in a less partisan manner than the current one. The founder is a gentleman by the name of Brad Adams, who spent 20 years with Human Rights Watch.
And he's assembled this group, and they're gonna be making pronouncements from time to time and, document instances of official corruption that might have gone unexamined with the hope that they'll be considered for further investigation and perhaps prosecution going forward.
So there are groups out there, and we've talked before, and we've had them on some of our webinar panels. Groups like the FACT Coalition and Transparency International, that focus on corruption and other related topics. 'Cause , to Elliot's point, the impact of corruption on societies, on climate, on what have you is in some cases almost insurmountable.
So the fact that groups are trying to do more than push back, but to be organized, I think is very positive when we have a lot of negative things going on.
Elliot Berman: Couple of quick things. The Egmont Group, which is an organization of the national level FIUs around the globe, Jerome Beaumont, who has been their executive director, has announced that he will be stepping down as of the end of the month.
He was at TracFin, which is France's FIU. And he's now been with Egmont for 11 years. And he's credited with doing a lot of valuable things with the group, expanding its membership. There are now 186 national FIUs that are participating. He also oversaw the creation of an IT platform that connects all the members. The secretariat also moved. It had been in Toronto, it's now in Ottawa, which is Canada's capital. I'm sure we'll see reporting down the road about who's gonna replace him.
And the CEO of Nasdaq, Adena Friedman, was giving a speech at the American Banker Most Powerful Women in Banking and Finance conference in New York, and she called for the government to create a national fraud strategy and talked about some other components that might go into it, but I thought it was interesting.
Have some national strategies, but we don't have a specific national fraud strategy, and I don't think it would be a bad idea. Certainly a lot of energy is being put forth by the government, both here and abroad, and organizations, non-governmental organizations, and private companies to stem the tide of fraud.
But wouldn't be all bad to have some pillars so we all row in the same direction.
John Byrne: Yes, and not just focused on certain frauds, but all the frauds, because that's a key. Our friends at the Charity and Security Network, we've already mentioned this in previous conversations, that the administration through OFAC added the ICC, the International Criminal Court, as a specially designated national list, which is a major escalation of sanctions issues.
C&SN is calling on the ICC's 125 states parties, particularly EU governments, to turn public support for the court into what they're calling concrete protection, and they mean by that extending the EU blocking statutes, establishing reliable alternative payment channels, and make sure that those protections reach non-profits and those that advocate for n- for non-profits.
A quick aside, we are actively considering working with the Charity and Security Network on some of their upcoming podcasts, some that we may do with them, some they can do on their own, and we'll certainly advertise those. I can tell you that the Marquette Center for Peacemaking, that I do a lot of work with, we've already agreed to do a podcast on the sanctions issue, not just ICC, but just in general sometime in December.
And we're more than pleased for them to reach out to us, because this is something that impacts many in the financial crime space, but also regular citizens. And more to come on that going forward. In December there's International Day Against Impact of Unilateral Coercive Measures on Human Rights, spotlighting those issues.
Elliot Berman: Last, I have two quick items. One is FINTRAC in Canada published its 2025 - 2026 annual report called Safe Canadians, Secure Economy. I recommend to people to take a quick look at it. The full report, as well as a summary, are available on their website. Interesting just to see how they're dealing with many of the challenges that are happening at the national governmental level.
Since the original legislation that included the Corporate Transparency Act was passed, we followed the regulations, making their way to final, and then the revised regulations going to final that did away with the reporting requirement and purged all the data in the registry. Twenty-one US states and the District of Columbia sued the Reasury Department this week in an Oregon federal court relating to Treasury Department's rollback of the reporting requirements established under the law.
Their argument, and you need to read the complaint, but at a high level, their argument is that an agency doesn't have the authority to write regulations that totally undo what is in the law passed by Congress. So it'll be very interesting to see what happens. This will take a while, of course, it's going to work its way through the federal court. But but interesting that people feel there was actually value in the Corporate Transparency Act and they'd like to see it come back.
John Byrne: Just a quick thing that just ran across my desk from Wired Magazine. There's an article in the most recent edition, and this talks about an individual that was part of Doge, went over to USAID, which as we know was substantially not just weakened, but cut on various levels in terms of the work they do internationally. The article goes into something.
It seems a little in the weeds, but I think it's interesting nonetheless because of the way Secretary of State Rubio gave this individual the ability to run USAID and all the things that occurred. This person did this without ever signing proper papers from an HR perspective to actually be in charge.
And while that sounds like more of a technical issue, according to this article, which you should read, there's been a number of lawsuits based on the fact that there's charges that he did not have the authority that he utilized to cut staff, to cut funding, and those related issues.
Just another example of things in court cases that are relevant, but obviously adjacent to direct issues. But something I would just urge people to take a look at. And this, , this was in the October twenty-seventh edition of Wired Magazine.
Elliot Berman: John I want to remind everybody that our November webinar is going to livestream on November 19th, a little earlier in the month because of the Thanksgiving holiday. It's going to be on FATF evaluations and their impact, and I know you've got a couple of great speakers lined up, so people can register for that. Anything else that's going on, John?
John Byrne: This is the week of the FATF plenary. We will talk about that a bit next week, but that'll be part of our conversation at the November webinar. Plus just in general broad-based recommendations and analysis of how to h- how to look at evaluations. What does it mean from both a practical standpoint and a policy perspective? So we have outside lawyer Dan Stipano, who's been integral in a number of our programming, and we have a representative of the FACT Coalition, Erica Hanichak, who is very involved in FATF related topics.
So really looking forward to that conversation in a couple of weeks.
Elliot Berman: Okay, John. Good talking to you and I will talk to you next week.
John Byrne: Go Brewers.
Elliot Berman: Yes, go Brewers. All right, bye-bye.