AML Scandals that Flew Under the Radar in ’15 – American Banker’s BankThink Blog

Screen Shot 2016-06-20 at 3.03.02 PMIn addition to anti-money-laundering scandals involving global banks and worldwide organizations such as FIFA that grabbed headlines last year, there were plenty of damaging laundering convictions and accusations in 2015 that went unnoticed but still took a heavy toll on midlevel banks.

Money laundering is a crime that occurs more often than the general public realizes, and in most sectors of our economy. In the past year alone, charity officials, a mortuary owner, a church director and a doctor providing chemo treatments were at the center of appalling cases you probably never heard about.

1. Tayfun Karauzum, of Newport Beach, Calif., was sentenced to five years in prison for distributing $1 million to $2.5 million of Potion 9, which contained a solvent that metabolizes in the body to become gamma-Hydroxybutyrate, or GHB, a known date-rape drug. He then laundered the proceeds.

2. Charles and Diana Muir were sentenced to 48 and six months in prison, respectively, and forced to return the $1.1 million they stole from a 140-year-old college scholarship charity in Louisville, Ky. — the Woodcock Foundation — that was run by Charles Muir. The couple then laundered the proceeds through Diana Muir’s dental business.

To view the rest of the top 10 most unheralded, yet just as disturbing money laundering stories from 2015 please click here.

Big Data Redefines KYC? – Medium

Thanks to technology, KYC is evolving to Know Your Country

To the average American, the acronym KYC probably sounds like a misspelling of the infamous KFC, but those of us in the financial services industry immediately recognize the acronym as referring to Know Your Customer, one of the cornerstones of today’s efforts to reduce risk and fraud in banking. The definition of KYC is about to change, however, as the acronym evolves to the risk management tool, “Know Your Country.”

It used to be understood that a successful banker would need to know his or her customers. One hundred years ago, chances are good that the home town banker would be intimately acquainted with his or her neighbors investing money, or seeking loans. Fast forward to today, and life is just not that simple anymore, particularly with national and global banks having hundreds of branch offices in multiple countries.

After 9/11, the U.S. Patriot Act in 2001 formalized the requirement for financial institutions to “know” their customers. . . Click here to read the rest of the article.