Money laundering uptick in 2016? Magic 8 Ball says, ‘signs point to yes.’ – Medium

When I was a kid, the Magic 8 Ball was a quirky toy used to tell fortunes or predict the future. The answers to yes-no questions were often vague enough to be accurate, such as “Ask Again Later” and “Don’t Count on It.” As we kick-off 2016, it might be fun to ask the Magic 8 Ball what we can expect to see as far as financial institutions and risk strategies go for coping with money laundering in the coming months.

Most Likely. We all know that we can expect to see an uptick in attempts to launder money, despite the tightened scrutiny by banks. In fact, as 2015 drew to a close, a man in Minnesota was being charged with conspiring to launder more than $2 million in a penny stock fraud scheme. It’s probably just human nature: where there are laws, there will always be people who try to figure out how to avoid them for personal gain.

Signs Point to Yes. . . Click here to read the rest of this prediction article. 

Silk Road, Bitcoin and the Secret Servicemen – Medium

Two Secret Service agents, both of whom were members of the Baltimore Silk Road Task Force charged with breaking Silk Road’s ring of illegal online activity (primarily drug sales), have pled guilty to money laundering and other charges. Shaun Bridges was sentenced on December 7 to 71 months behind bars, and ordered to forfeit $651,000 of the $820,000 he reportedly stole and laundered. Bridges’ colleague, Carl Force, was convicted of a similar crime last October, sentenced to six and a half years in prison and ordered to pay $340,000 in compensation.

Two members of a task force ordered to bring down an online black market, become criminals themselves; how does this happen? To read the rest of this story, please click here.

From the Laundromat to Wall Street: a History of Money Laundering – Medium

I talk a lot about money laundering, but exactly what is it and how did it become a popular topic of conversation?

According to the U.S. Treasury, money laundering is simply how someone or some organization makes illegally-gained proceeds, or dirty money, clean. Typically, it involves three steps — placement, layering and integration — so that illegitimate funds can become part of the legitimate financial system.

As an illegal activity, it’s been going on for several thousand years; for example, we know that Chinese merchants were hiding their wealth from rulers as early as 2,000 BC. They would either move it, invest it in remote provinces (or outside of China) or bury it.

Fast forward to today, and. . .to read the rest of this article, please click here.

Fourth Anti-Money Laundering Directive Underway in EU – Medium

5 things you need to know about the fourth anti-money laundering directive underway in the European Union.

It isn’t always easy to get multiple stakeholders to agree to change. But after much discussion (and some bickering), the European Union finally passed the Fourth Anti-Money Laundering Directive earlier this year. Financial institutions operating in an EU member state have until 2017 to meet the new reporting and disclosure requirements aimed at disrupting terrorist financing, corruption and money laundering. And in just a few months, financial institutions need new account onboarding procedures put into place no later than January 1, 2016.

In a nutshell, here’s what you need to know:

  • The entire gambling spectrum is now subject to these regulations, not just casinos.
  • Enhanced customer due diligence is required.
  • The cash payment threshold was lowered to €7500.
  • Click here to read the rest of this post on Medium.com.

It’s not that easy to KYC

It sounds pretty straightforward.  Banks should know who they are doing business with in order to halt illegal activities.  But Know Your Customer (KYC) programs as a risk management tool aren’t all that easy to implement.  Quite often, they are at the  polar opposite end of delivering superior customer service – a differentiator that all banks are trying to capitalize on in this competitive market.

Let’s assume you want to open a new account at a private bank.  Before the institution of the U.S. Patriot Act in 2001, you could probably have just walked in the front door, showed the teller or bank officer a passport, driver’s license or even a utility bill, and voila! Your new account is up and running.

It’s a much different picture today.  Anti-money laundering protocols now mean that the bank needs to know the origin of your money.  For example, how did you acquire your savings, and can you prove that it came from your hard work? Off the top of your head, could you list all of your assets and attach a dollar amount to them?  Remember that small parcel of land you inherited from Aunt Edith – exactly how much is it worth?

After this interrogation, which will include a discussion of your family and your politics, you MAY be approved for a bank account.  By this time, you are probably frustrated and out-of-sorts; after all, aren’t you supposed to be the client, and shouldn’t the bank be falling all over itself to get your business?

The key to adhering to KYC regulations and mitigating the impact on customer service is rapid customer onboarding.  This is an agile business practice that uses technology to eliminate manual compliance checks. By leveraging integrated data collection and search, banks can keep approval decisions on the fast track and ensure that the data is simultaneously submitted to its risk management and fraud detection programs.

As an example, here’s a story of how improved KYC processes helped one bank simultaneously save $1.4 million while increasing its focus on customer-facing activities.  Enhanced KYC policies do not necessarily have to mean more client aggravation.







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