This Week in AML

AML Partnership Forum, ICIJ, Homeland, and More

John and Elliot are at the AML Partnership Forum this week. They review key themes from the meeting and discuss US Homeland Security’s Global Human Trafficking: A Year in Review report, the ICIJ’s Annual Report for 2023, and a GAO anti-money laundering report.


AML Partnership Forum, ICIJ, Homeland, and More - TRANSCRIPT

Elliot Berman: Hi, John. How are you today?

John Byrne: Good, Elliot. We are both at the third annual AML Partnership Forum in Washington, D. C. We are recording this during a break in the conference. We wanted to talk a little bit about that, but I think as everybody knows, if you want to join us next year, it's all off the record.

We can talk themes, high level topics. But if you want to join us next year, and we will obviously advertise when after we finish this up, but the key I think for us has always been the support we've received from our law enforcement partners. I don't mean ours as RightSource, ours is the private sector AML community.

And so yesterday we had Patrick McElwain from the Department of Homeland Security kicked off the day. And then as we're recording this, we're recording this on Tuesday, the newly appointed chief of IRS CI, Guy Ficco, who takes over on April 1st, kicked off today. We were really happy about that.

And I'll just say this about his opening remarks. He restated some things that we've learned from his predecessor, Jim Lee, and that is back in 2023, some of the statistical support for both BSA data and the work of IRS CI was 1,508 convictions, was 88% conviction rate, which is great. The other thing that he mentioned was that IRS CI and IRS in general, they're hiring more data scientists, which is good news for all you tech people out there, but also in general, just because of all the data uses.

He said under his watch coming up, there'll be more feedback on suspicious activity reports. He finds those extremely valuable. We had a session today about a case that actually was awarded by FinCEN for its success, and it was a collaborative case among IRS, CI FBI agents, Small Business Administration, and US Attorney's Offices. That was really interesting. But the last thing I'll say about what Guy said, besides being super supportive of our mission, he gave generic, but useful takeaways. He said, all of us stay informed, increase your awareness, protect yourself and your families from, theft and scams and report suspicious activity.

Elliot Berman: It was great opening remarks really set the tone for today, and reminded us that the agencies really are focused on partnerships, and I think that's a good segue. One of the things you and I also wanted to talk about was Homeland Security has a Center for Countering Human Trafficking, sometimes called CCHT.

And they published in the last few days, their year in review for fiscal year 2023. And they have five key goals in their strategy, and I'll tell you in a moment what they do, but their goals are prevention, protection, prosecution, partnership, and enabling DHS. And CCHT provides support, with regard the huge human trafficking problem for all the rest of Homeland Security.

So that includes Homeland Security Investigations, Customs and Border Protection, Citizenship and Immigration Services, and others, as well as the Federal Law Enforcement Training Centers. The report is comprehensive as you would expect. But it did highlight a number of things that they've been doing including they published during fiscal year 2023 well over a hundred intelligence products on sex trafficking and forced labor.

So again, as you just talked about, there is this continuing focus on data. And turning that data into useful tools is one of the things that CCHT does. They assisted over 730 human trafficking victims. They interdicted well over 250 shipments for almost $7 million of value.

And did a lot of other things, but I think the value of this report is it gives you a very comprehensive view of the efforts by federal law enforcement to deal with and support interdicting human trafficking which is something, John, you and I have talked about many times and continues to be a focus of our entire community.

John Byrne: Yeah, and related to that, by the time you hear this ICIJ, the International Consortium of Investigative Journalists, who we've both interviewed members of that organization before and reported on, their annual report will be available. And they had a couple of key items that they call out, both in the press release and in the front end of the report.

One is their work in the past year on what they call Cyprus Confidential. That focused on Cypriot financial enablers that shielded Russian oligarchs from Western sanctions. So they reported on that. They also talk in that report about what's been the response to that from various governments in terms of enforcement, in terms of policy change.

And then related to human trafficking, they did a report that they call Trafficking Inc. And that was an expose on global sex trafficking networks and abusive labor practices everywhere from on US military bases to major corporations like Amazon and McDonald's. So that's also in the report. We've said many times that ICIJ does tremendous work and obviously they call out corruption and crime wherever they see it.

So I think it's not just a valuable organization, but their information is extremely useful. And as AML professionals, I don't think you necessarily have to belong to the organization to get their regular communication. So I think that's something that you should think about.

Elliot Berman: One of the interesting parts about the report is in addition to outlining the key projects that they did in the last year, they did focus on the impact that their projects have had over a number of years. Not just the newest projects, but going back to projects that have happened over the last four, five, six years. One that I was reminded of is that they dealt deeply a couple of years ago into the unregulated art and antiquities market.

And they had a series of results or impacts. including the things that the Metropolitan Museum of Art did in terms of examining its collection, repatriation of art of questionable provenance and other organizations as well, not just the Metropolitan.

John Byrne: We should say going back to the Forum that we are at on the last day of the Forum, we're going to be honoring, since we mentioned Guy Ficco, who's taking over as the IRS CI chief on April 1st. His predecessor, Jim Lee. So Jim Lee for his great career work, not just as chief, but also just as his many decades of work in public service. So we're recognizing that as well on Wednesday of this week. So more to come on that, but Jim was a strong supporter of the Forum and helped us get it kicked off the ground. And we've been fortunate now to have Don Fort, Jim Lee, and now Guy Ficco, all three IRS CI chiefs as strong supporters of the AML Partnership Forum.

Elliot Berman: So I, I think the other thing we wanted to talk about is you saw a new GAO report that just came out?

John Byrne: Just dropped actually, right before we recorded. And GAO never has very exciting titles. The title is Anti Money Laundering, Better Information Needed for Efforts to Show Federal Effectiveness. There's three key items in it. Not a very lengthy piece, but there are three major items are the Treasury should ensure that FinCEN develop and implement a communications plan to inform Congress and the public on what's happening with AMLA. And since we did mention during the program today that we're still waiting on the FinCEN priorities reg, that was it's obviously very current to make the public in Congress current on what's happening. That's one.

And the second one was more use of customer satisfaction surveys. That's mainly, if not completely directed toward law enforcement. So what are they finding valuable about AML related data, what FinCEN is producing, that sort of thing. And then the last one again, related to data, the Attorney General with Department of Homeland Security, and Treasury should actively produce government wide data on outcomes of AML investigations.

Now it doesn't say what, when, what's the scope and timing, but that's something that certainly has been pushed from members of Congress and frankly the private sector. We've always talked about trying to, prove value. We all believe there is value in BSA data but to talk about the outcomes of AML investigations in fairly real time I think would be value added from it as a training tool but also to support the overall effort when resources are limited and there continues to be questions on value not on overall infrastructure value but are we doing it the right way?

Elliot Berman: Yes. And I think that those items from the GAO report, interestingly aligned very much with some of the things we've heard in some of the sessions here at the Forum, where people in the audience are asking some of the panelists for specific examples of how certain information, particularly in suspicious activity reports, How has that been helpful?

What part of it, help key your investigations? Not to reduce work, but to be able to make them that much more effective. The other theme that we've heard consistently is the need for better feedback loops. Are we sending in the right data? Are we sending you stuff that isn't helpful?

We talk about false positives on the transaction monitoring side, but false positives, if you will, in sending in SARs that aren't helpful is also worthy to be known so that we can fine tune them so they are valuable.

John Byrne: So again, the AML Partnership Forum was March 18th to the 20th in DC. Pretty soon, I think probably as soon as the summer's over, we're going to be planning 2025. So more to come on that. Again, it's not a RightSource event. It is a 501c3 separately run, not for profit organization with a steering committee that includes members from the private sector, many members from the public sector, a whole host of people that some, you know, and maybe some you're just getting to know and we were really pleased with the amount of sponsors we had because the key is for this to be a self sustaining event. And now that we've gone through three years of this I think it's pretty safe to say we can keep this going. You we'll hear more about it in the coming months. Bottom line is a lot of good discussions, and I think we all learned a lot.

Elliot Berman: Our next webinar, as we've been telling you week after week, is March 28th, and it's on Terrorist Financing and the Use of Virtual Assets. So there's still time to sign up for that at our website amlrightsource. com. And John, I know you've got an interesting interview that you're going to do between when we record and when this goes live, and that we're going to try to post in the next week or so. Why don't you tell everybody about that?

John Byrne: So I was very honored that I received an a acceptance of my invitation to Diane Foley to interview her about her most her most recent book American Mother. Diane Foley was mother of Jim Foley, a photojournalist that was murdered by ISIS back in 2014.

Diane worked tirelessly after that time to work on hostage negotiations. Broadly, from a policy standpoint, journalist safety training, which a good friend of the pod Tom Durkin wrote, who's also a member of the Foley Foundation that was created by Diane after Jim's murder. And so we're going to interview her this week.

I would urge everybody to get a copy of American Mother. It's not just compelling. It's amazing the amount of work that Diane still does in regards to very difficult issues when you talk about hostages and ransoms and governments that, including ours, that were not very receptive in paying ransoms for a variety of reasons.

They're not the only country that did that, but there were some that do. And so there's been a lessening of a stranglehold on that sort of anti ransom conversation. So there are negotiations that, and a lot of it is due in large part to Diane's work. But more importantly, it's a story about a mother's heartbreak, but turning that heartbreak into a mission and a mission that's you know helping many globally.

So I'm doing that. And then I have something coming up, a couple coming up in the next couple of weeks, some staffers from FATF, we're going to talk about some interesting projects that they've been working on, and then I'm going back to some data folks that want to have more conversations about virtual assets and some of the issues regarding AML.

And as always, if you're got someone who in your world, who you think we'd like to interview. or it's some topic you want us to cover, just pop Elliot and I a note. We'd be happy to pursue that.

Elliot Berman: John we're having a great meeting. I'm looking forward to the rest of it. And I will talk to you again next week.

John Byrne: And everybody's keeping tabs. Marquette opens up the tournament on Friday against Western Kentucky. Hopefully when we record next week, they're playing through the second weekend. So that's our hope.

Elliot Berman: That's our hope.

John Byrne: Take care.

Elliot Berman: Bye bye.