Fascinating New Reporting

I didn’t think I’d be posting again so quickly after Friday’s devastating news. But today, Buzzfeed News launched their major investigative reporting series, the “FinCEN Files.” It’s sure to continue generating headlines and will be a major focus at anti-money laundering conferences for the foreseeable future.

The series is some of the best investigative journalism I’ve seen in this field. The reporting speaks for itself, but the core centers on several thousand Suspicious Activity Reports leaked to Buzzfeed over a year ago. The Bank Secrecy Act requires financial institutions to file those reports, called SARs, to report suspicious transactions and other conduct that may suggest illegality like money laundering or terrorist financing. The reports are compiled by a Treasury agency, FinCEN—the Financial Crimes Enforcement Network—which often shares them with U.S. law enforcement and with law-enforcement and intelligence agencies around the world.

I’m not aware of any prior leak of so many SARs, which are confidential and sensitive. Buzzfeed worked with hundreds of journalists around the world through the International Consortium of Investigative Journalists. These investigators analyzed not only the SARs themselves, but also thousands of government documents, bolstered by interviews.

The thrust of the stories is that many global banks may have continued transacting business with suspicious actors, despite good reason not to do so. And the government has rarely acted on these SARs or against the banks themselves for lax anti-money laundering controls. The series includes a fascinating interactive map allowing readers to trace suspicious transactions around the world. It also coincides with the launch of a podcast on the investigation—I’ll be adding that to the blogroll here. And Buzzfeed‘s partner organizations have started running their own stories from the documents, like this NBC piece on North Korea.
Continue Reading White Collar Update – Buzzfeed’s FinCEN Scoop

A few weeks ago, Justin flagged an Oregon case alleging money laundering through the Black Market Peso Exchange, one of the most successful and efficient laundering schemes in the world.  The Black Market Peso Exchange is a trade-based money laundering technique commonly used by narcotics traffickers based in Colombia and Mexico. The central feature is the use of a money trader to ensure that the revenue from drug sales in the U.S. doesn’t actually cross any borders. Instead, those dollars are used to purchase any number of legitimate commodities from unsuspecting businesses on behalf of legitimate South American businesspersons whose legitimate imports are used to obtain pesos for the drug cartels.

This system involves several key advantages for the trafficker:

  • Avoiding the risk of having large quantities of cash detected at international borders
  • Avoiding the type of large cash deposits that trigger reporting requirements for financial institutions in many jurisdictions
  • Achieving quick access to pesos


Continue Reading Money Laundering Through the Black Market Peso Exchange