HSI SAC Newark NJ Kelly Polson & Terri Quintana Cornerstone - - PowerPoint PPT Presentation

Homeland Security Investigations Homeland Security Investigations

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FOR QUOTES AND SUCH

HSI

SAC Newark NJ Kelly Polson & Terri Quintana Cornerstone Outreach Program

Homeland Security Investigations

Homeland Security Investigations Legacy

HSI investigates customs, trade and immigration crimes, smuggling of narcotics, weapons and other types of contraband, human trafficking and smuggling, financial crimes, cybercrimes, gangs investigations, critical infrastructure and export enforcement issues.

Homeland Security Investigations

256 Domestic Offices 26 SAC Offices

Homeland Security Investigations Homeland Security Investigations

International Footprint

Homeland Security Investigations

HSI Special Agents “Customs Officers” Investigate at and away from the border

Broad authority to investigate federal crime

Homeland Security Investigations Narcotics Smuggling / Trafficking Commercial Trade and Fraud Weapons Smuggling Export Enforcement Intellectual Property Rights (IPR)

Trade

Human Smuggling / Trafficking Anti-Gang Enforcement Immigration Document / Benefit Fraud Human Rights Violations

Travel

Money Laundering / Bulk Cash Smuggling / Financial Crimes Cyber Crimes Worksite Enforcement/ Critical Infrastructure Protection

Finance

Homeland Security Investigations

HSI focuses on the means and methods utilized by transnational criminal

• rganizations to earn, move and store their proceeds.

Methods Kleptocracy Financial Fraud Telemarketing & Mass Fraud Human Trafficking & Human Smuggling Organized Retail Crime Contraband Smuggling/ Trafficking

Homeland Security Investigations Border Search Authority

Exclusive Access to Trade Data Full Access to BSA’s Reports

As the United States’ principal border enforcement investigative agency, HSI is uniquely positioned to investigate all incidents of transnational and cross-border financial crimes. HSI is the only law enforcement investigative agency that has border search authority, full access to BSA reports, and exclusive access to trade data.

Homeland Security Investigations

FinCEN Participation

• HSI contributes to FinCEN’s SAR Activity

Review which highlights case where BSA information played an important role in the successful investigation and prosecution of criminal activity.

• HSI has a continual presence at FinCEN

through the utilization of an HSI Liaison, a Special Agent and a Intelligence Research Specialist.

Homeland Security Investigations

In July 2003, HSI launched the Cornerstone Outreach Program to work with the private sector in order to identify and eliminate vulnerabilities in financial systems through which criminals launder their illicit proceeds. The key is building strong partnerships and alliances by sharing law enforcement trends and methods and providing training to the businesses and industries that manage the financial systems that terrorists and criminal organizations seek to exploit.

Homeland Security Investigations

HSI Special Agents/Program Managers assigned to HQ, publish a newsletter titled “The Cornerstone Report”, providing useful information on financial crimes, current trends identified by both law enforcement and the private sector, recent cases and training/outreach events. www.ice.gov/cornerstone

Homeland Security Investigations

How You Can Help

Homeland security is more than a government responsibility – it’s a shared mission for all Americans. As a valued stakeholder in this partnership, there are several ways you can help to ensure our nation’s security: PARTNER with your local HSI office by maintaining open lines of communication COMPLY with the Bank Secrecy Act, US PATRIOT Act and

• ther industry reporting requirements through a

comprehensive AML program REPORT suspicious activity by contacting your local HSI

• ffice by calling 1-866-DHS-2-ICE

SUBSCRIBE to the “Cornerstone Report”, HSI’s newsletter devoted to financial investigations on HSI’s authorities. Visit www.ice.gov/cornerstone for more information or write to cornerstone@ice.dhs.gov

Homeland Security Investigations

Suspicious Activity Report (SAR) Filed by financial institutions on suspicious activity Currency Transaction Report (CTR) Currency transactions over $10,000

Currency and Monetary Instruments Report (CMIR) Filed by persons departing or entering U.S. or shipping or receiving C/MI

• ver $10,000

FinCEN Form 8300 Cash over $10,000 received in a trade or business

Foreign Bank Account Report (FBAR) U.S. person with financial interest

• r signatory

interest in foreign bank accounts

Bank Secrecy Act Reports

Homeland Security Investigations

Recommendations when preparing a SAR

• Begin the narrative with a summary sentence to give

the reader a snapshot of what details will be discussed

• Who’s Involved?
• Amount of suspect $
• Dates of activity
• What activity is suspected?

Homeland Security Investigations

Recommendations when preparing a SAR

• Create 1 SAR per suspected activity relevant to the

subjects involved

Homeland Security Investigations

Recommendations when preparing a SAR

• Note what supporting documents exist

Homeland Security Investigations

Recommendations when preparing a SAR

• Please don’t list all of the transactions in the

summary without giving a reason. A sample set highlighting the activity will suffice.

Homeland Security Investigations

Recommendations when preparing a SAR

• Indicate if there are employees of the financial

institution that may have more detailed knowledge of the SAR being filed

Homeland Security Investigations

Recommendations when preparing a SAR

• SARS related to correspondent account activity

should include the details of all the accounts involved

Homeland Security Investigations

Recommendations when preparing a SAR

• Include the identifying information of all

parties involved

Homeland Security Investigations

Recommendations when preparing a SAR

• If you are writing the SAR because of a look-back

state that in your opening sentence.

• If you are writing due to a Law Enforcement

Inquiry, be sure to input that Officer’s Contact information in its respective field.(Law Enforcement

Agency Contact)

Homeland Security Investigations

• Write why you think the activity is suspicious

and what factors drove you to that conclusion Recommendations when preparing a SAR

Homeland Security Investigations

Recommendations when preparing a SAR

• Note other suspicious businesses or individuals that

have frequent financial contact with your customer and why you think these relationships are suspect

Homeland Security Investigations

Recommendations when preparing a SAR

• Explain how the money goes in AND how the

money goes out, especially in Trade Based Money Laundering scenarios

Homeland Security Investigations

Recommendations when preparing a SAR

• Specify the suspect amount of currency going

in and out of the account

$400,000 going into the account $100,000 going into the account

Homeland Security Investigations

Recommendations when preparing a SAR

• If your bank has completed any site visits of the

suspect .customer, enter the details of the findings in the summary

Homeland Security Investigations

Recommendations when preparing a SAR

• If the suspect customer has a safe deposit

box, note that .information

Homeland Security Investigations

Recommendations when preparing a SAR

• If possible, when the account is closed by your bank,

indicate where .the money was transferred to after the closure of the account

Ending Balance: $454,680.99 Bank Check Issued to XYZ Bank for $230,484.99 Wire Transfer to ABC Bank for $224,196.00

Homeland Security Investigations

Recommendations when preparing a SAR

• Do the deposit locations match the geographical

footprint?

Homeland Security Investigations

• When a SAR is generated from CTRs that

aggregate to over .$10,000, note the locations each transactions occur in Recommendations when preparing a SAR

Homeland Security Investigations

Recommendations when preparing a SAR

• Please list patterns of structuring:

Date – Amount – Location 9/1/2012 $5,600 Pequannock, NJ 9/1/2012 $4,400 Wayne, NJ 9/8/2012 $5,500 Butler, NJ 9/8/2012 $4,500 River Vale, NJ

Homeland Security Investigations

Recommendations when preparing a SAR

• If this isn’t the first SAR for the

customer, please indicate the:

• previous reference number(s),
• previous suspicious activity dates
• cumulative amounts

Homeland Security Investigations

Case Study

Homeland Security Investigations Homeland Security Investigations

HSBC Bank

• In December 2012, Homeland Security Investigations and the Department
• f Justice announced a $1.256 billion summary judgment with HSBC.
• HSBC entered into a deferred prosecution agreement for violations of the

Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA).

• A four-count criminal information was filed charging HSBC with willfully

failing to maintain an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent affiliates, violating IEEPA and TWEA.

Homeland Security Investigations

HSBC Bank

• From 2006 to 2010, HSBC failed to implement an Anti-Money Laundering (AML)

program capable of monitoring suspicious transactions and activities.

• This included a failure to monitor billions of dollars in purchases of physical U.S.

dollars, or “banknotes”, from these affiliates. HSBC Bank USA rated Mexico as “standard” risk, its lowest AML risk category.

• As a result, HSBC Bank USA failed to monitor over $670 billion in wire transfers

and over $9.4 billion in purchases of physical U.S. dollars from HSBC Mexico during this period, when HSBC Mexico’s own lax AML controls caused it to be the preferred financial institution for drug cartels and money launderers.

Homeland Security Investigations

HSBC Bank

• A significant portion of the laundered drug trafficking proceeds were

involved in the Black Market Peso Exchange (BMPE), a complex money laundering system that is designed to move the proceeds from the sale of illegal drugs in the United States to drug cartels outside of the United States, often in Colombia.

• In 2008, HSI New York’s El Dorado Task Force identified multiple HSBC

Mexico accounts associated with BMPE activity and revealed that drug traffickers were depositing hundreds of thousands of dollars in bulk U.S. currency each day into HSBC Mexico accounts. This was accomplished by analyzing Fedwire data.

Homeland Security Investigations

HSBC Bank

• As a result of HSBC Bank USA’s AML failures, at least $881 million in

drug trafficking proceeds – including proceeds of drug trafficking by the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Colombia – were laundered through HSBC Bank USA.

• HSBC Group admitted it did not inform HSBC Bank USA of significant

AML deficiencies at HSBC Mexico, despite knowing of these problems and their effect on the potential flow of illicit funds through HSBC Bank USA.

Homeland Security Investigations

AML Staffing Issues

Homeland Security Investigations

Become a Partner with Law Enforcement

Homeland Security Investigations

Contact Information Kelly Polson, Cellular: (973) 917-9452

Special Agent:

Email: Kelly. J.Polson@ice.dhs.gov Terri Quintana; CAMS, CFE Cellular: (973) 332-7118

Intelligence Research Specialist:

Email: Terri.A.Quintana@ice.dhs.gov