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

You might have heard the term “hawala” mentioned over the last few weeks. Maybe you saw it discussed while watching Amazon’s new Jack Ryan series, or maybe you’re more of a C-SPAN fan, and caught it a few times while watching the House Financial Services Committee’s Subcommittee on Terrorism and Illicit Finance hearing on September 7th on terrorist groups and their means of financing.

Hawala is a trust-based informal value transfer system (sometimes called parallel banking) that is widely used for perfectly legitimate purposes across parts of South Asia, West Africa, and the Middle East, and for facilitating transactions between communities there and people in other parts of the world, like Europe and North America. Its attraction to money launderers and terrorist financers is driven in large part by the difficulty of tracing the transactions and the limited means of regulatory enforcement. Notably, hawala is generally unlawful in countries like Pakistan and India, and in some U.S. states.


Continue Reading Financing Terrorism Through the Hawala System