FinCEN’s Annual List of Top Crimes Solved

July 6, 2017

FinCEN recently held its annual awards ceremony that recognizes law enforcement agencies that made effective use of financial institution reporting to successfully prosecute crimes. Here is a summary of this year’s award recipients:


SAR Review Task Force: New York State Police

A bank in the Hudson Valley Region noticed that one of its accounts had an unusual pattern of cash deposits along with rapid withdrawal from ATMs across the United States.

Using suspicious activity reports (SARs) along with other investigative tools, a special unit at the New York State Police was able to identify expansive criminal organizations that were responsible for importing large quantities of narcotics, operating business fronts used to launder funds, trafficking weapons, smuggling bulk cash, and conducting extensive gang activity, including murder.

The multi-agency investigation eventually led to the seizure of firearms, illicit drugs, cash and other assets as well as the indictment of 55 individuals.


Transnational Organized Crime: FBI

A referral from local law enforcement led the FBI to arrest and charge an individual with money laundering. This person in turn helped in the discovery of a network of criminal actors and accounts suspected of laundering money through businesses and trust accounts located in several countries.

In co-operation with foreign and domestic law enforcement partners, it was found that the suspects and organization were bringing in $100–$300 million annually in criminal proceeds in North America alone.

Through this information, authorities arrested and convicted several targets on various money laundering, fraud, and conspiracy charges.


Transnational Security Threats: FBI

During the investigation of a criminal organization believed to be moving hundreds of millions of dollars for foreign nuclear and ballistic missile programs, the FBI identified two families that operated a network of exchange houses, precious metals companies and trading companies.

These families also operated front companies throughout the Middle East that carried out financial activities for OFAC-sanctioned entities as well as entities with close ties to foreign military organizations.

Financial data identified one particular exchange house for foreign remittances, which enabled a grand jury to issue more than 100 subpoenas to U.S. financial institutions relating to more than 300 targets and millions of transactions totaling over $200 billion.

Subsequent investigations, including into bribery, corruption and embezzlement, led to criminal charges of conspiracy to commit money laundering, bank fraud, and sanctions violations to be laid against nine individuals, including an officer of a foreign bank. Criminal forfeiture is expected to be in the millions.


Cyber Threats: IRS-Criminal Investigation (IRS-CI)

A multi-year, multi-agency investigation, led by IRS-CI focused on several targets selling narcotics on the dark web and distributing them through the U.S. Postal Service. The shipment of the illegal drugs were disguised inside packages filled with markers and drawing paper, and multiple return addresses and sender names were used. Despite the guise, postal inspectors were able to determine that the mailings originated from the same individual.

Through internet service provider records, investigators were able to determine that the username associated with several undercover purchases on the dark web belonged to the same individual identified by the postal service. With this information, it was found that over a six-month period the individual had sent 435 suspicious packages on at least 50 different occasions.

With financial data, it was also discovered that Bitcoins were being used to pay for narcotics and to launder money before it was converted into U.S dollars and deposited into several accounts. As result of this investigation, many targets were arrested and eventually pled guilty to various drug and money laundering charges.


Significant Fraud: Defense Criminal Investigative Service (DCIS)

Multiple financial institutions identified a single individual that was structuring transactions and had excessive credit card charges. Investigators at DCIS determined that one of companies receiving funds had been providing subcontractor support for a military contract in Afghanistan.

Upon further investigation, it was found that this business was also a shell company for a U.S. military official to conceal bribery payments he was receiving in exchange for helping the primary target win contracts.

Further analysis of financial data found that $24 million was deposited into the personal accounts of the primary target, most of which were deposits from his employer, a Department of Defense prime contractor providing logistical support and training to foreign military units.

These deposits were followed immediately by transfers to several bank accounts and structured cash withdrawals.

The U.S. military official receiving the bribery helped the primary target win $54 million in bids and was paid over $9 million through an extensive network of shell companies and bank accounts.

The targets eventually pled guilty to various conspiracy, money laundering, obstruction, and fraud charges. Investigators were able to seize $12.3 million in assets including property, cars, boats, aircrafts, firearms, gold coins and bank accounts.


Third-Party Money Launderers: Immigration and Customs Enforcement Homeland Security Investigations (HSI)

Through a FinCEN-issued Geographic Targeting Order (GTO) where armored car services importing or exporting funds through two specific geographies were required to provide additional identifying information on certain transactions, it was found that one company appeared to be facilitating a money laundering scheme.

HSI investigators discovered that the company was importing U.S. dollars and Mexican pesos from casas de cambio in Mexico and depositing them into bank accounts of shell companies owned by two individuals who owned and operated the car service company.

These individuals also owned other companies, two of which were registered as money services businesses (MSB) that were funneling millions of U.S. dollars back to Mexico.

Transaction records identified cash deposits of $45 million over a 15-month period, which were then transferred in and out of the accounts of the various companies owned by the individuals before ultimately being wired to Mexico.

As a result of the investigation, both individuals pled guilty to failing to maintain an effective anti-money laundering program, lost all licenses necessary to operate as an MSB and forfeited hundreds of thousands of U.S. dollars and Mexican pesos.

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