Compliance Blog

Written by Bernadette Clair, Regulatory Compliance Counsel

Final FinCEN Roundtable Discussion.  FinCEN will hold its fifth and final roundtable discussion on December 3, 2012, at the Miami Branch of the Federal Reserve Bank of Atlanta, regarding the Advance Notice of Proposed Rulemaking (ANPR) on Customer Due Diligence (CDD) Requirements for Financial Institutions. FinCEN issued the ANPR on March 5, 2012, and the comment period closed on June 11, 2012.

FinCEN has been holding these roundtable discussions to collect additional information from interested parties, including credit unions, primarily on issues dealing with beneficial ownership, risk mitigation, due diligence on trust accounts, and shell companies.  See the notice for the complete list of issues, and information on attending the roundtable – requests to attend must be submitted to FinCEN no later than November 21, 2012.

FinCEN previously held a public hearing regarding the ANPR on July 31st.  A portion of the hearing is available via archived webcast, and a summary of the hearing is available here.

For more information on the ANPR itself, see our previous blogs on March 5th and March 6th.

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 SAR Activity Review.  On October 24th, we blogged about some of the SAR filing resources available in the latest SAR Activity Review – Trends Tips & Issues (SAR Activity Review).  This publication also features law enforcement case examples that make excellent training tools.  I especially like examples that feature suspicious activity reported by credit unions, like this one regarding the investigation of an identity theft ring. 

 â€œA local credit union began receiving online applications in January of 2010 for new accounts allegedly from females residing in a major metropolitan area. Similarities in the online account applications started becoming apparent after fictitious checks were deposited via ATMs shortly after the accounts were opened. It was discovered that each account was opened with a fictitious driver’s license (the names and personal identifying information were real), included previous addresses in another state, and came from IP addresses that were from the same location and provider. One last application was received for a business account with a local address, but the business owner resided out of state. The application came from an IP address in the same location as the previous applications. Surveillance video from the ATM deposits into the accounts appeared to be the same person, sometimes carrying a small dog with a white car in the background which matched the business owner’s Facebook photos of herself, her dog, and her new car. The females, whose names appeared on the previous online accounts, were contacted and it was verified that they were identity theft victims. One of the victims had previously worked for the suspect.

The credit union investigator requested the assistance of a state law enforcement unit and a federal agency. Numerous SARs were found and helped to identify other financial institutions having similar activity with the same suspect, identified more identity theft victims, and pointed to other ongoing criminal investigations throughout the metro area. Further investigation identified associated persons and the identity theft ring was tied to several other criminal investigations involving the use of stolen personal and financial information to open credit accounts in several local jewelry stores where the members of the organization purchased several high-end pieces on credit which were later pawned for cash.

A grand jury indicted the group consisting of the ring leader and four others. The ring leader was sentenced to 20 years in prison.”