The last several weeks have seen a number of noteworthy arrests for money laundering. A fugitive American, who pled guilty to money laundering charges eight years ago but disappeared while out on bail, was finally returned to the U.S. after being apprehended in Mexico last year. And a Jamaican national was sentenced to 30 years in prison in the U.S. for money laundering, and ordered to pay $55 million in restitution to his victims – after he finishes out his 6 ½ year term for a prior conviction in Jamaica.
The last decade brought about a tumultuous change in financial institution regulations. Many pre-2000 “suggestions” or “guidelines” became hard rules enforced by stiff fines. The new regulations were long overdue – the terrorist attacks of 2001, and the string of large corporate scandals a few years later proved once again we aren't in Kansas anymore – but they did significantly complicate compliance procedures. There is first an alphabet soup of overlapping legislation under the PATRIOT Act, Bank Secrecy Act, the Financial Anti-Terrorism Act, FINRA and “know your customer” requirements, Sarbanes Oxley and a fair amount of other stringent regulations. In short, financial institution executives are quite burdened familiarizing themselves with dozens of potentially applicable rules and regulations.
Mortgage fraud has been much in the news in recent years. After the dust created by the mortgage-fueled financial crisis of 2007-2008 began to clear, scrutiny of the mortgage-industry revealed extraordinary levels of fraud. This excerpt from the FBI’s Financial Crimes Report, 2008:
There’s a lot of semantic debate these days over what to name foreign nationals who violate U.S. immigration policies and national laws – whether you call them illegal immigrants, illegal aliens or undocumented workers, it comes down to the same thing at the end of the day for every business: hire them, and you’ll pay big fines if detected. Though the majority of U.S. companies do not intend to violate immigration laws; in fact, more compliance violations occur from nonexistent or simple lazy I-9 verification than intentionally shady hiring practices. Breaking the law is easily accomplished if you’re not properly prepared; the bottom line is this –
In a startling revelation yesterday, one of the largest U.S. banks admitted in court that a recently acquired retail bank division had failed to adhere to Bank Secrecy Act guidelines to detect and prevent money laundering by illicit organizations.