This Week in AML

HSI – Cornerstone Outreach

Homeland Security Investigations’ (HSI) Outreach Initiative – Cornerstone recently shared information about the rising level of organized retail crime (ORC) being perpetrated by transnational criminal organizations. This activity involves planned theft of retail goods for later sale through gray market channels. John and Elliot discuss the value of HSI outreach to the financial crime prevention community and some of the red flags for identifying ORC.



HSI – Cornerstone Outreach TRANSCRIPT


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

John Byrne: Hey, Elliot. Actually, out at the west coast AML forum, we know the model that we used for the AML partnership forum from a couple of weeks ago. So this particular program it's. 30th year 29 events. Cause in 2020, it was postponed because of COVID.

And there's been a number of conversations with law enforcement. It just struck me that while this is a national problem, you certainly have seen some media stories about what HSI is calling organized retail crime. Still, I guess there's a phrase for it where they go into retail stores and grab items.

It's planned. These are gangs. These are organized. They sell them online, that sort of thing. And so, I thought it'd be a good time to reference what HSI is doing in this space. And also a precursor to a more detailed interview that we plan to do with our partners there when they release a training program that will help financial institutions on this organized retail crime. And it's such an important topic that they already have an acronym ORC. And so, I thought we would highlight what they sent us, which is the cornerstone newsletter. Which, frankly, I'd sort of lost track of. It was something that I had previously subscribed to.

This is their 25th issue. They sent us January and February, but I think it's important both to tell our community that this is out there and give them some highlights from this particular edition.

Elliot Berman: Yeah, well, again, like many of the great publications that various agencies and the federal government and in the law enforcement community, in particular, published the cornerstone newsletter it's monthly, it focuses on a single topic, and it's something worth, looking into if you're out in the community and trying to find out a hot topic.

I mean, it's a great way to follow a hot topic. So I thought this was interesting because we've all known that there's Rico crime, and probably most of the time we just put people talking about it, like as shoplifting, but it was much more organized. It's with the intent. I think to be able to support transnational, organized crime activities through the sale of these stolen goods.

So, you know, no financial cost to the organizations to get these goods. There's always the risk of stealing them and then selling them on online sales portals and getting the funding. So it's become very large, and it's clear that, as you said earlier, it's very organized and segmented.

One of the nice things about this particular piece is that there are some red flags that financial crime prevention professionals can use as they're trying to detect whether any of this activity is going through their organization or their institution.

John Byrne: Right. And you know, they give you a tip on filing SARS, and they ask that you maintain photos and video. If you got them of the individuals making deposits or withdrawals suspected of being involved in this, the red flags are. They're not unknown to our community. So there are things like structured cash deposit fraud associated with the paycheck protection program. Cryptocurrency exchange deposits that exceed significantly exceed the stated income on account applications and have no identifiable source.

The businesses' principals use the bank smartphone apps to send multiple transfers. Those sorts of things. I think that's important, but I like the way Homeland Security says I don't understand why this is important, other than the obvious that these are criminal activities because these street gangs also commit narcotics smuggling, human smuggling trafficking, and all sorts of other things.

So the funds that they raise from the sales of these ill-gotten goods help them pay for those criminal activities. So I think. That's a good connection as to why our community needs to pay attention to this.

Elliot Berman: Yeah, also in the newsletter, there was something that was not in the focal point of the topic, but they said one of the things that's interesting is HSI special agents are available to provide training and share red flag indicators, criminal typologies, et cetera.

Many of our colleagues in the field who have responsibility for making sure that their training programs are, you know, current and interesting and effective are often looking for sources for external speakers beyond just their online training. And this is just a good reminder that HSI.

Some of the other agencies offer that in their outreach programs as well, you know.

John Byrne:  I don't think it's the advertising, but HSI in this publication and when they speak at our programs, sometimes I think people forget the scope of coverage. I did a session today on the antiquities smuggling here on the west coast and reminded people that the FBI has an art theft division, which I didn't know until a couple of years ago. But similarly, HSI lists the things they investigate. Most of our community knows this, but besides financial crime, national security issues, and human trafficking, we're well aware of transnational gangs' general smuggling, IP theft, and trade fraud.

So, you know, there's a whole host of things. The day and other law enforcement agencies work on. But I think sometimes they, we sort of forget, maybe put other agencies in line ahead of them, but they do elder fraud. You know they have important corruption. So I would say to folks, subscribe to this number one, and they're asking you, in addition to, if you want training, do you have recommendations for content. Are they missing something? So if they're willing to do this and put it out monthly, we should continue to ask for education, awareness, and outreach from them in this publication. And certainly, with the work we do with them regularly.

Elliot Berman: Yeah. So cornerstone is one of their key Outreach programs collaborating with the financial industry. So, I mean, they have many other outreach programs across the many things that HSI does, but it's important to take advantage of this. I mean, I know it sounds a bit corny, but these are our tax dollars at work.

At work and are being effective. And so it's important to take advantage of it.

John Byrne: I think that's right. I know coming up. We have a webinar. We were able to get the three folks who did a great job at the AML Partnership Forum on sanctions that will re-repeat the session, if you will, but put it into webinars so it could have broader access toward the end of May. So you want to give folks information on that?

Elliot Berman: Yeah, so that's it's May 26th. It's a Thursday. The live stream will start at 1:00 PM Eastern time. And you can sign up by going to the AML RightSource website, and if you're on the website for just a moment or two, you'll get a little pop-up that will give you a chance to register for the website or for I'm sorry for the webinar.

And you'll also, if you register for the webinar, whether you attend or not. You'll get an email a few days afterward that will link to the full recorded session. 

John Byrne: Yeah, you know Elliot, when we do our webinars, obviously I'm well aware that we send out both snippets and fuller versions of what have you of the programming, but if people want to make sure if they missed the one on domestic terrorism last week how can they get some of that information going forward?

Yeah. We certainly are well aware that we do this, that you guys do this, but I think it's important. So people sort of looked for that, you know?

Elliot Berman: Yeah. So there are a couple of ways. The first way is in the month beginning of the month following. They will see posted in the video section several throughout the month, several shorter excerpts from it. They tend to run about ten-ish minutes.

So, you know, an easier view than sitting and watching the entire thing and those posts throughout the month. And sometimes, if there's enough, you know, different webinars yield different amounts. So sometimes they go on into the next month. Also, about a month after a webinar, we then post the full recording to the website.

And so, that's the other way that you can see these. And then there's also often, you know, through our LinkedIn channel, you'll see posts that talk about excerpts, and we'll have a link to those excerpts as well. So that's three ways that you can access our great webinar content in addition to watching the live stream.

John Byrne: All right, sounds good. Have yourself a great rest of the week, and we will talk again next week.

Elliot Berman: Yeah. And you enjoy a west coast. And what do you, whenever you're coming back east traveled carefully.

John Byrne: Thanks. Take care.

Elliot Berman: Take it easy. Bye-bye.