Sex, Gambling and… Ice Cream?

credit Got Defense Attorney
credit Got Defense Attorney

People working for Department of Defense, both employees and contractors, have been found to be issuing Department issued credit cards to pay for gambling and “adult entertainment.” The Department spokesperson was quick to point out that that doesn’t mean the Department paid for the activity. The way things work there is that the cards are not directly billed to the Department, instead to the individual and then the individual fills out a form requesting a reimbursement from the Department. This could mean that the employees wanted to hide the activities from their spouses. (From UPI and Politico.)

If that wasn’t salacious enough for your… hahaha… excuse me, I couldn’t help myself. Benjamin Netanyahu, the Israeli Prime Minister was audited by his nation’s Comptroller and found lavish spending. Among the usual types of lavish spending was $2,500 a month on ice cream. That’s right. Ice cream. People have already begun to make fun of this in ways that are hilarious, even if you don’t understand Hebrew.

credit Calcalist
credit Calcalist
credit Israelly Cool
credit Israelly Cool
credit International Business Times
credit International Business Times

Say Hello To My Little Friend…

… I call him FinCEN.

FinCEN, the Financial Crimes Enforcement Network, a division of the US Department of Treasury, issued  a GTO, or Geographic Targeting Order. This is a rarely used order, for the obvious reason that money laundering is usually not concentrated in any one place. But Miami businesses are going to receive closer scrutiny from the sub-Treasury group because of money laundering related to drug trafficking. Effectively, this lowers the currency reporting threshold from $10,000 to $3,000.

'You've not been involved with money laundering before have you Joe!'This is a good time as any to discuss Black Market Peso Exchanges, or BMPE. This is a money laundering scheme often used by Colombian drug cartels to repatriot their US earnings back to Colombia. The exchange serves as the middle man. The exchange imports good into Colombia from the US, the imports being products that the cartel wanted, either to sell to the local market or for themselves. Cartel gives the exchange US funds, which is used to purchase goods for export. Effectively, it looks like the exchange is shipping many small orders from retail customers in Colombia, but actually, it is just laundering money.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses. He is the author of the forthcoming book History of Money Laundering: How criminals got paid and got away.


Financial Crime Briefing: Strengthening Controls to Address Evolving Risk Trends

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

  • William Langford, Moderator, Global Head of Compliance Architecture and Strategy, Citigroup
  • Martin Cunningham, CAMS, Regional Head – Financial Crime Intelligence – Americas, Standard Chartered Bank
  • Justin Bogert, CAMS, Global Controls Manager, Paypal

HeaderThis panel discussion, the final for the conference, was a well-rounded compliance function discussion. Compliance department has a lot of roles: adviser, monitor, surveillance, investigation, risk mitigation, oversight and control, and regulatory relations. The focus of this panel was monitoring, surveillance and investigation. Both Martin Cunningham and Justin Bogert have military intelligence backgrounds. Cunningham is at a traditional financial institution and Bogert is at a money services business (MSB). Many of the issues are the same but the institutions differing in two main ways, in terms of compliance:

  1. MSB’s collect far less information during onboarding a client, and
  2. MSB’s have more issues pertaining to charities being abused for money laundering or terror financing.

Paypal silos risk into three buckets: Brand Risk, Fraud Risk and Transaction Risk. Traditional anti-money laundering program development are utilized to research typology. Special effort is made to collect information as transactions, both financial and non-financial, take place on Paypal’s platform to create risk profiles. Paypal has developed an internal visualization tool to find relationships.

Standard Chartered Bank is highly exposed to developing economies. For this reason, geo-political expertise is highly valued. SCB’s AML teams are made up of four groups of people: Law Enforcement, Intelligence, Bankers and Trade/Tool personnel. Law Enforcement are good at documentation and analysis of the collected information. Intelligence are good at bringing outside information in to provide context. Bankers bring institutional knowledge about how the organization reacts to transactions and relationships. Trade and Tools personnel provide execution expertise in both preventing and investigating crimes.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance