FinCEN and the Rapid Response Program

FinCEN has published a Fact Sheet on the Rapid Response Program. This program is a cooperative effort with federal law enforcement agencies and many of FinCEN’s global counterpart FIUs to assist fraud victims in attempting to recover stolen funds. John and Elliot discuss the key elements of the program, how to trigger the RRP after a fraud event, and the value of the RRP for financial service providers as a tool to assist their customers who become victims of fraud.

FinCEN and the Rapid Response Program TRANSCRIPT

Elliot Berman: Hi, John, how are you this week?

John Byrne: Well, yourself?

Elliot Berman: I'm good too. I know you're here in Milwaukee to see a Marquette game and visit your daughter and enjoy our cold weather.

John Byrne: But what's the, what's the deal man? What is it like, February [laughs]?

Elliot Berman: Yeah, you know, we tried to skip February and go right to March this year, but we couldn't get that through the legislature.

So, this week, I saw that a FinCEN put out a release about a program that I think isn't really very well known and is worth talking about. And that's their rapid response program. Did you see that release?

John Byrne: Yes, I did. And I thought it was interesting on a couple [of] levels. One is we know FinCEN has a lot on their plate. From the AMLA regs, strategies, studies, we've talked about a lot of them, and a few more are do out through the course of the year. And so they got a lot that they're both building and responding to. I liked the idea that once in a while, I think government agencies need to not look for [inaudible] to say, hey, here's what we're doing with all the data and information.

And what struck me from both the advisory and the fact sheet, if you will, they have with other agencies [have] been able to return I think it's $1.1 billion in this program since it started a few years ago, which is not nothing. That's important. And these are the types of things, especially in the area where banks and others have to file reports.

Want to know where's the value proposition. This is really, I think, a very positive docent, but also they should be doing this more often, meaning explaining the things that they're doing. I think this is really good.

Elliot Berman: Yes. So just for our listeners who don't necessarily know very much about the program, it's called Rapid Response Program, and it's a partnership with FinCEN and US law enforcement. So FBI secret service, Homeland [Security], Postal Inspection Service, and then foreign partner agencies that are there, like national FIU use in other jurisdictions. And when the rapid response program is triggered, and we'll talk about how that happens in just a moment, this group will actually try to recover funds that were fraudulently taken from customer accounts, through like a business, email, compromise schemes, and things like that. Which, again, to your points, I think it is a pretty amazing thing; it gets triggered by filing a complaint.

So, either the victim or the victim's financial institution can file a complaint. And there's a long list of information, the kind of thing you would expect needs to be in there so that a transaction can be tracked down. They remind people that, you know, you need to do it very promptly because, for example, wire transfers, it's pretty hard to reverse and recover funds from a wire transfer after 72 hours.

But the fact that you would have the assistance of FinCEN, all of these law enforcement agencies, and to the extent that the money leaves the US. The FIU of cooperative foreign jurisdictions is a lot of leverage to bring to bear on a potential fraud loss.

John Byrne: Right? And one of the things our AML community knows as well, but it doesn't get enough play, is how active the US Postal Service is regarding fraud and financial crime. So at some point, we have to interview somebody from that world. So I think that's something we should be doing. Also, the adviser reminds the financial institutions when you report to designate both of the narrative and explanation that these complaints have been filed because that'll help. It just makes those things more easily searchable, and it will help with the investigation as well. So that was another thing that was missing in both the fact sheet and the announcement.

Elliot Berman: Yes. I guess the other thing that I would point out to everybody is this is another tool that financial institutions [and] financial service providers can use to assist their clients. When a business email compromise occurs, you know, obviously everybody's unhappy, but to the extent that now there is another tool to try to bring to bear to help the client beyond whatever the bank could do directly with the counter-party bank or something like that, [the] beneficiary bank. But bringing law enforcement into the process at this early stage can be valuable. So this was another customer service tool, and you know, we do our best to educate our clients about not falling for these kinds of things, but to the extent that something bad happens, here's another tool to use.

So it's important to educate the security staff at your institutions that this is available and to move with alacrity because, as the fact sheet says, time is of the essence.

John Byrne: Yeah. And as we're recording this, obviously, the US [and] our allies are looking carefully at potential activity in Ukraine, from Russia.

The reason I mentioned that, people a lot smarter than me can talk about the ramifications. But one of the things that strikes me is cyber attacks. You know, cyber warfare is something that we've seen already a lot. We'll see more of that. This is just another example of rapid response. Getting monies from a fraud to a victim is the same as national security.

It's not, but I would envision there'll be more taxes as things go forward. I think we should just look at all the different lanes and areas, where we can get up to speed on what needs to be done what the government's doing. So just, you know, again, all this stuff interrelates.

It's all connected, unfortunately. And so I think this is again just another example, but this is a positive example. As we set upfront, this is where your government's working for you in conjunction, as Elliot said, with foreign governments, in some cases and returning money to victims fairly quickly. And, I think they need to be commended for that.

Elliot Berman: Yep. We will link to the fact sheet. John, I'll let you do the plug for next week.

John Byrne: So on Thursday, at one o'clock Eastern time, we'll be doing a webinar with several members of our advisory board, Key Issues for 2022. Obviously, we're in the second month of 2022, but there's a lot of things going on. We'll be discussing international issues, domestic issues, and both from their standpoint, but practical advice and some things they see down the line. So it'll be an hour of a really good conversation with Rick Small, Melissa Strait, and Terry Pesce who have expertise in a whole variety of areas. And we'll take your questions. So that's another one of our free programs, at one o'clock Eastern.

Elliot Berman: Yes. And if you have registered, you can register on our website. Also, if you like this edition of This Week in AML, hopefully, you'll listen to it every week. You can find all of our podcasts on Spotify, SoundCloud, Apple Podcast, or wherever you get your podcasts. And we'll be back next week.

John, I'm actually gonna see you this evening, but still have a great safe weekend. And when you travel home, travel safely. 

John Byrne: See you in a bit, man. Take care.

Elliot Berman: Bye-bye.