This Week in AML

Another Busy Week in AML

Written by AML RightSource | Sep 23, 2022

John and Elliot discuss several topics from this week: a recent ProPublica article on human traffickers forcing victims into cyberscamming, recent releases from the US Treasury Department, and insights from the Missouri Bankers Association BSA/AML Conference.

 

 

Fraud Schemes Just Keeping Coming. TRANSCRIPT

 

Elliot Berman: Hi, John. How are you this week?

 

John Byrne: Elliot. How are you doing?

 

Elliot Berman: I'm good. So you're still out at the Missouri bankers BSA, AML, and Compliance Conference. Aren't you?

 

John Byrne: Yeah, we just finished up in the Ozarks, and people like to make jokes about the streaming series Ozarks because of the money loaning component.

Also not getting great signals, but we just finished up, and obviously, the BSA AML Conference focused locally on issues challenging the community bankers here. Before we talk about some of the other issues, I just wanted to mention a couple of quick things a regulator panel of local regulators, FDIC.

 

Very complimentary of the bankers here, saying that their BSA programs are fairly robust and strong. They did caution them, though, because there's been pressure on many banks to make more revenue and to be cautious regarding product delivery. But for the most part, they were very complimentary. And then, there was a panel from the US Attorney's Office in the Eastern District of Missouri.

And those folks continued to talk about the value of SAR data and filings for their investigations, two to three thousand a month that gets filed in the Eastern District that they review each and every day. They sort of reminded the bankers of the importance of spending a little extra time in narrative to give them some direction because that does help speed up the investigation. Several other things are going on in the US regarding AML and our community.

 

Elliot Berman: Right. So one of the things that I saw was a press release from the treasury about some testimony.

 

John Byrne: Well, yeah, treasury did a couple of things this week, obviously. And one of them, Rosenberg, testified. I believe in the Senate side and what the treasury was doing. So she talked a lot of instructive about where we think FinCEN is on some of their priorities, right? So the Corporate Transparency Act, she talked about the beneficial ownership database that is a priority that should be unveiled fairly soon or didn't give a timeline for new disclosure for real estate.

Obviously, they've done an RFI on the real estate industry and then pursued more information on the illicit risk by investment advisors. So I think all those things tell us that those are sort of next up for FinCEN and the treasury department.

 

Elliot Berman: Yeah. So those are all things that you and I have talked about. We'll continue to talk about both the importance of and where we in the US sit compared to other countries under the FATF expectations. 

 

John Byrne: So there was a request for information that I think you highlighted on digital assets.

 

Elliot Berman: Yes. And also, some additional comments are coming out of the treasury about moving forward with further exploration of a central bank and digital currency.

 

I also saw, and I think you did, too, an interesting article posted by ProPublica, a nonprofit newsroom investigating abuses of power. That's how they self-describe. But they published an article about human trafficking's newest abuse, forcing victims into cyber-scams. Did you get a chance to see that? 

 

John Byrne: I did not. I just saw the headline of it. So can you tell us a little bit more about that?

 

Elliot Berman: Yeah. So it's very interesting. A lot of this is happening in Asia, and a lot of it is centered in Cambodia, where at least the victims end up in Cambodia. They're not all Cambodian citizens, but they end up in Cambodia.

And some scammers are running a scamming industry, and they are populating their call centers and WhatsApp centers and things like that. With people who have been, who are being trafficked, who've been kidnapped and moved to these scamming centers. Many of them are, you know, described in the article as being written out, you know, visible, and they don't have a sign on the side, but visible buildings.

 

It's not like they're hidden in a warehouse district all the time and things like that. Although these folks are clearly imprisoned and enslaved. But they are being forced to perpetrate romance scams and other investment scams. Targeted both in the US and other countries around the world.

 

And it's clearly terrible conditions for these folks. And it's really a brute-force effort in terms of what the scammers are trying to accomplish. Their hit rate can be very low, but their success when they have a hit can be very high. And it's a very gruesome tale there. They have information that was obtained from people who escaped. And there's a section in the article with some very gruesome photos behind a black screen with a warning before you click on it. So you don't just wander into seeing photos of people who've been tortured and things like that.

But you know, we've talked a lot about human trafficking, right? First, labor and sex trafficking and that kind of thing. But this was the first time I'd seen, I guess I wouldn't quite call it white collar crime, but you know, a crime that isn't of a physical nature that the victims are being forced into.

 

We'll link to that article in our post on the website. And I'd recommend it for people to read and also to think about when they're identifying frauds if they get information from the victim and are reporting the fraud if they end up getting any kind of insight into the fact that the calls, you know, were coming from certain parts of the world. Not you know, to include that both to help the authorities track down the fraudsters but also to add to the information that may lead to Cutting down on this human trafficking disaster.

 

John Byrne: Right. Just another element, unfortunately, of that horrific crime. And we'll be doing more on human trafficking later in the year in a webinar. So a lot of that just real quick because of the human trafficking aspect of it. Then, we had a presentation here about elder abuse, and cyber security is particularly on the rise. So, you know, and I think part of that's pandemic, people being on their own, that sort of thing. So it's just another element. Some of it is elder abuse. Some of it is cyber scams, particularly for people over 50. So I thought that was interesting. All sorts of things going on in that space, but particularly now, cyber are just another tool to use, to commit criminal acts, you know, against individuals.

 

Elliot Berman: Yes. I think as a community, you know, of something we can continue to do in that space is not only any required reporting but equally important is training, you know, offering customers training or information. You know, warning kinds of material, whether it's with interactions in the lobby for those customers that are still coming into the lobby or through the call centers, or even statement stuffers and things like that, which I know are very old school. But you know, ways to alert our clients, particularly those of us of a certain age, which John, I think you and I now fit into whose computer skills may not be great, but who have assets. And so, you know, our ripe targets for cyber-based frauds and elder abuse.

 

John Byrne: That's right. And I wanna apologize to folks in case some of the sound wasn't great on this. We tried our best this week. The connections are not great, but that's it on my end. Elliot, anything you wanna promote?

 

Elliot Berman: Two things. One, next Thursday, the 29th, we're doing the monthly webinar on ESG and the risks in the financial services world related to it. It's at noon Eastern time, and you can register on the website.

 

And then in October, I think it's on the 27th. We're going to do a webinar that will update where we are on AMLA 2020, the regulations, and the studies. Obviously, everything isn't done, but we're gonna roll everybody forward. So they should start with a really good discussion so that we can make all kinds of level sets coming to the end of this year and think about what will still be coming in and impacting all of us in 2023.

 

John Byrne: Sounds good. Take care. I'll talk to you again.

 

Elliot Berman: All right. Travel safely.