Misplaced Pages

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60-528: FinCEN's stated mission is "safeguard the financial system from illicit activity, counter money laundering and the financing of terrorism, and promote national security through strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence." FinCEN serves as the U.S. Financial Intelligence Unit (FIU) and is one of 147 FIUs making up the Egmont Group of Financial Intelligence Units . FinCEN's self-described motto

120-642: A Board of Partners (BoP) formed by connected FIUs that have volunteered for a seat. The Board of Partners is chaired by an independent Director. Daily operation of the system is managed by the FIU.NET Bureau, a project bureau of the Dutch Ministry of Justice and Security , which is housed in the Europol International headquarters in The Hague . The United States has several laws requiring

180-574: A FinCEN investigation into the title character. In the first episode of the 2017 Netflix show Ozark , FinCEN is mentioned as one of the agencies (along with the DEA , ATF , and FBI ) active in monitoring cartel activity in Chicago. Financial Intelligence Unit A financial intelligence unit ( FIU ) is a national body or government agency or international organization which collect information on suspicious or unusual financial activity from

240-508: A FinCEN position. In September 2020, findings based on a set of 2,657 documents including 2121 suspicious activity reports (SARs) leaked from FinCEN were published as the FinCEN Files . The leaked documents showed that although both FinCEN and the banks that filed SARs knew about billions of dollars in dirty money being moved through the banks, both did very little to prevent the transactions. The 2016 film The Accountant features

300-757: A community of other financial intelligence units. According to the Department of Justice, VCET members represent the FBI, the Drug Enforcement Administration, multiple U.S. Attorney's Offices, and the Criminal Division's Asset Forfeiture and Money Laundering Section and Computer Crime and Intellectual Property Section. In 2021, amendments to the Bank Secrecy Act and the federal AML/CTF framework officially incorporated

360-687: A dedicated team of analysts to examine these SARs, aiming to detect possible money laundering incidents. FinCEN is the regulatory agency tasked with overseeing the Beneficial Ownership Information Reporting (BOIR) system in the U.S. This responsibility was established under the Corporate Transparency Act (CTA), which mandates that certain business entities must disclose information about their beneficial owners to FinCEN. CTA aims to enhance transparency and combat financial crimes by preventing

420-400: A sanctions violation money transmittal system. On June 7, 2010, despite the superseding indictment charge of $ 3.4 million, the same jury agreed to forfeit one bank account associated with a $ 6,000 transaction as the proceeds of the charges and the guilty verdict. The jury ruled that Mahmoud Reza Banki's other assets including the apartment he had purchased with the family funds he had received

480-415: A second criminal defense trial, Banki agreed to relinquish $ 710,000 of his assets. In exchange, prosecutors agreed without going through a second trial that Banki was not guilty of the sanctions charges, and that they would not pursue the criminal or civil cases further. The case was permanently closed on July 24, 2012, with the final word being the success of Banki's appeal, finding that he was not guilty of

540-725: A separate amicus brief with the United States Court of Appeals for the Second Circuit. The amicus brief argued that U.S.-Iran sanctions "are not aimed at the Iranian people, and therefore they contain exemptions permitting certain humanitarian transactions and family remittances." For about 11 months (from January 7, 2010, to December 1, 2010) Banki was held in high and maximum-security detention centers in Manhattan and Brooklyn (MCC and MDC). For December 2010 Banki

600-456: A specific or general license.". The final appellate court brief stated: "Banki's conviction [on the sanctions charges] cannot stand". Prosecutors reopened the case, seeking a retrial in February 2012. However, after a few months of delay and assignment of a new judge, the case was closed criminally with no option for future civil or criminal prosecution. Rather than pay for the high cost of

660-496: A superseding indictment later changing the amount to $ 3.4 million and adding two false statement charges to the three initial charges. Banki was denied bail. He was held in high and maximum security detention facilities pending trial. The indictment charging Banki argued that Banki should have gotten authorization in the form of a license for the money he received: "(vi) Under the ITR, any United States person who wishes to engage in

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720-446: A transaction otherwise prohibited by the ITR must first file an application for a license and receive approval from OFAC. 31 C.F.R. §§ 56.600, 560.501, and 501.801.". On May 10, 2010, a three-week trial commenced where Second Circuit District judge John F. Keenan presided. The trial concluded on June 4 when the jury returned a guilty verdict on all five counts, albeit, guilty on a lesser charge of aiding and abetting rather than running

780-416: Is " follow the money ." The website states: "The primary motive of criminals is financial gain, and they leave financial trails as they try to launder the proceeds of crimes or attempt to spend their ill-gotten profits." It is a network bringing people and information together, by coordinating information sharing with law enforcement agencies, regulators and other partners in the financial industry . FinCEN

840-521: Is a stub . You can help Misplaced Pages by expanding it . United States v. Banki In United States v. Banki , 685 F.3d 99 (2nd Cir. 2011) the Second Circuit Court of Appeals overturned the conviction of Mahmoud Reza Banki . Banki had been convicted of multiple crimes related to allegedly conspiring to violate United States sanctions against Iran by transferring large amounts of money — totaling some $ 3.4 million — from Iran to

900-525: Is a decentralized computer network that provides an information exchange between the financial intelligence units of the European Union. FIU.NET is a decentralized system with no central database where the information is collected. All the connected FIUs have their FIU.NET equipment within their own premises and manage their own information. Through FIU.NET the connected FIUs create bilateral or multilateral cases. Ma tch (autonomous, anonymous, analysis)

960-927: Is a matching tool within FIU.NET. Ma tch makes it possible for FIUs to match names in order to find relevant data that is possessed by other connected FIUs. As the data is anonymized, there is no breaching of privacy and data protection rules. The heads of Financial Intelligence Units (FIUs) around the world play crucial roles in combating financial crime, including money laundering, terrorist financing, and fraud. FIUs are typically national agencies responsible for collecting, analyzing, and disseminating financial intelligence to combat these issues. Here are some prominent FIU heads and their respective countries, though it's worth noting that leadership can change. PROMINENT EXECUTIVES The executives leading these units are often prominent figures with extensive experience in finance, law enforcement, or regulatory affairs. Here are some notable executives and leaders associated with FIUs from around

1020-520: Is an Iranian-American and a US citizen. He immigrated to the United States in the 1990s to attend college at the University of California at Berkeley and later at Princeton University . He was working at McKinsey & Company at the time of the case. Between 2006 and 2009, Banki's family sent proceeds of his parents' divorce settlement, approximately $ 3.4 million to him, from Iran to

1080-497: Is the goal of the U.S. government to continue cultivating that support while isolating the government of Iran. In virtually all economic sanctions programs administered by OFAC (with the exception of the 1963 program against Cuba where Cuban nationals were also included as targets), including the Iran sanctions program, it was always understood that there was a dual goal and purpose – to bring as much economic pressure as possible to bear on

1140-742: The Customs Service ; and the U.S. Postal Inspection Service . The 2001 USA PATRIOT Act required the Secretary of the Treasury to create a secure network for the transmission of information to enforce the relevant regulations. FinCEN's regulations under Section 314(a) enable federal law enforcement agencies, through FinCEN, to reach out to more than 45,000 points of contact at more than 27,000 financial institutions to locate accounts and transactions of persons that may be involved in terrorist financing and/or money laundering. A web interface allows

1200-813: The Electronic Frontier Foundation in San Francisco has debated its benefits compared to its threat to privacy. FinCEN does not disclose how many Suspicious Activity Reports result in investigations, indictments or convictions, and no studies exist to tally how many reports are filed on innocent people. FinCEN and money laundering laws have been criticized for being expensive and relatively ineffective while violating Fourth Amendment rights, as an investigator may use FinCEN's database to investigate people instead of crimes. It has also been alleged that FinCEN's regulations against structuring are enforced unfairly and arbitrarily; for example, it

1260-739: The Federal Financial Institutions Examination Council , a congressionally-chartered forum called the "Bank Secrecy Act (BSA) Advisory Group" and BSA Working Group to review and discuss new regulations and guidance, with the FBI-led "Virtual Currency Emerging Threats Working Group" (VCET) formed in early 2012, the FDIC-led "Cyber Fraud Working Group", the Terrorist Financing & Financial Crimes-led "Treasury Cyber Working Group", and with

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1320-483: The 22 months in which he lost his liberty and which he cannot get back". Since his release, Banki has completed a Masters' in Business Administration from UCLA Anderson School of Management. Banki spoke about his case for the first time publicly at a TED Conference at UCLA in 2014 in an effort to raise awareness about the justice system. He also spoke about the uncertain life path he now faces in

1380-478: The BSA across industries and for some larger holding companies even within the same institution. Regulators need to promote greater consistency, coordination and information-sharing, reduce unnecessary regulatory burden, and find concerns across industries. FinCEN estimated that it would have data access agreements with 80 percent of state agencies that conduct BSA examinations after 2012. Since FinCEN's inception in 1990,

1440-751: The Department of the Treasury. Since 1995, FinCEN has employed the FinCEN Artificial Intelligence System (FAIS). In September 2012, FinCEN's information technology called FinCEN Portal and Query System, migrated with 11 years of data into FinCEN Query, a search engine similar to Google . It is a "one stop shop" [ sic ] accessible via the FinCEN Portal allowing broad searches across more fields than before and returning more results. Since September 2012 FinCEN generates 4 new reports: Suspicious Activity Report (FinCEN SAR), Currency Transaction Report (FinCEN CTR),

1500-539: The Designation of Exempt Person (DOEP) and Registered Money Service Business (RMSB). As of November 2013, FinCEN employed approximately 340 people, mostly intelligence professionals with expertise in the financial industry , illicit finance, financial intelligence , the AML/CFT ( anti-money laundering / combating the financing of terrorism ) regulatory regime, computer technology, and enforcement". The majority of

1560-485: The Government of Iran, its leadership, its various agencies, instrumentalities, controlled entities and support structure, including Iran's Revolutionary Guard Corps, and other such organizations necessary for the support and continuation of the current Governmental hierarchy. The industrial and commercial sectors - oil and gas, financial, manufacturing and other sectors that contribute significantly to Iran's economy and

1620-506: The Government's ability to continue its threatening behavior were also of primary concern. The program goal was never intended to target the Iranian people. The Iranian Diaspora is large. As many as 4 million or more Iranians live as expats around the world. It is estimated that there are as many as 800,000 Iranian nationals currently resident in the United States as dual nationals, green card holders or with other visa status. A very large percentage are supporters of U.S. policy toward Iran, and it

1680-500: The US and the difficulty he faces in finding employment due to his continued status as a felon despite his appellate win. There are plans for a documentary of his story. Banki's case raises questions not just about the ambiguity and impracticality of the sanctions laws for Iranian-Americans but speaks to the broader impact that the current criminal justice system can have on the path of a "success story". With support from 13 Congressmen and

1740-608: The US-imposed Iran sanctions. The United States enforces sanctions against several countries worldwide. These sanctions are instituted by the Office of Foreign Assets Control ( OFAC ) under the Department of Treasury of the United States. The US Treasury's OFAC designates family money as exempt from the sanctions law. A detailed letter by former head of the Office of Foreign Assets Control (OFAC), Richard Newcomb, to

1800-431: The US. The money came into a single bank account at Bank of America , over multiple transfers through an informal money transfer systems which the defendant argued was legal and the only means of sending money out of Iran at the time. Banki used the majority of this money to purchase an apartment in downtown Manhattan. Prosecutors argued that over this three-year period, between 2006 and 2009, Banki had allegedly violated

1860-779: The United States. In 2010, Mahmoud Reza Banki, an Iranian-American, was arrested and prosecuted by the United States Attorney's office in New York City. He was charged in the Southern District of New York with violating the US sanctions against Iran. He was charged with conspiracy to violate the Iranian Transactions Regulations (the "ITR") and operate an unlicensed money-transmitting business and four other charges. His defense argued these transfers were necessary to protect

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1920-612: The apparatus of administrative anti-money laundering supervision, which ensures that obliged entities transmit relevant information to the FIU. Financial Intelligence Units (FIUs) are specialized agencies responsible for receiving, analyzing, and disseminating financial information related to money laundering, terrorist financing, and other financial crimes. They play a crucial role in the global fight against financial crime by collaborating with various stakeholders, including law enforcement, regulatory authorities, and international organizations. Here’s an overview of some prominent FIUs around

1980-450: The charges. Judge Keenan also did not allow the defense to call Richard Newcomb, former head of OFAC, to testify as an expert witness on the sanctions charges despite his qualifications: he had been head of OFAC for 17 years (from 1987 to 2004), where he was the author of the sanctions law. Richard Newcomb was not only the author of the underlying sanctions regulations but in his capacity as head of OFAC he had also been in charge of enforcing

2040-564: The corporate sector. In 2009, the GAO found "opportunities" to improve "interagency and state examination coordination", noting that the federal banking regulators issued an interagency examination manual, that SEC , CFTC , and their respective self-regulatory organizations developed Bank Secrecy Act (BSA) examination modules, and that FinCEN and IRS examining nonbank financial institutions issued an examination manual for money services businesses. Therefore multiple regulators examine compliance of

2100-406: The court during the case of US v. Banki outlined the sanctions regimen and intent; undermining the prosecutor's case against Banki as not being in line with the practices of OFAC or the intent of the sanctions. Nor were the charges in line with the agency's approach while Richard Newcomb was head of the agency: "The underlying purpose for these multiple U.S. economic sanctions programs against Iran

2160-439: The direct or indirect benefit of the Government of Iran or a person in Iran, arising from several types of underlying transactions, including: a) a noncommercial family remittance; b) an exportation to Iran or importation from Iran of information and informational materials; c) a travel-related remittance; d) a payment for the shipment of a donation of articles to relieve human suffering; or e) a transaction authorized by OFAC through

2220-703: The existing FinCEN guidelines on digital assets. The legislation was updated to encompass "value that substitutes for currency," reinforcing FinCEN's authority over digital assets. As a result, exchanges dealing in these assets were required to register with FinCEN and adhere to specific reporting and recordkeeping obligations for transactions involving certain types of digital assets. For the year 2021, FinCEN received 1,137,451 Suspicious Activity Reports (SARs), which include both traditional financial institutions and cryptocurrency trading entities. Within this category, there were reports of 7,914 suspicious cyber events and 284,989 potential money laundering activities. FinCEN utilizes

2280-540: The family's assets. He spent 22 months in prison before winning his case on appeal, with all the sanctions charges against him being dismissed. The case was permanently closed in July 2012. Banki spoke publicly for the first time about his case at TED Talk in 2014. He has spoken before various audiences and in The Moth podcast released January 2017, Banki spoke to the personal toll of the ordeal. Mahmoud Reza Banki ,

2340-413: The financial industry and other entities or professions required to report suspicious transactions, suspected of being money laundering or terrorism financing . FIUs are normally not law enforcement agencies, but their mission is to process and analyze the information received. If sufficient evidence of unlawful activity is found, the matter is passed to the police or public prosecutors. They complement

2400-460: The intended target without causing unintended hardship and suffering on the civilian population, the very people whose support and assistance the U.S. and the international community will need if and when a successor government emerges." On January 7, 2010, U.S. Immigration and Customs Enforcement (ICE) agents authorized by a grand jury with a search and arrest warrant entered the residence of Mahmoud Reza Banki in New York City and arrested him. He

2460-406: The person(s) designated in §314(a)(3)(A) to register and transmit information to FinCEN. The partnership between the financial community and law enforcement allows disparate bits of information to be identified, centralized, and rapidly evaluated. As early as 2003 FinCEN disseminated information on " informal value transfer systems " (IVTS), including hawala , a network of people receiving money for

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2520-550: The purpose of making the funds payable to a third party in another geographic location,... generally taking place outside of the conventional banking system through non-bank financial institutions or other business entities whose primary business activity may not be the transmission of money. On September 1, 2010, FinCEN issued a guidance on IVTS referencing United States v. Banki and hawala. In July 2011, FinCEN added "other value that substitutes for currency" to its definition of money services businesses in preparation for adapting

2580-691: The reporting to the Financial Crimes Enforcement Network (FinCEN). These include the Right to Financial Privacy Act (RFPA) of 1978, the Bank Secrecy Act of 1970 (and other names of revisions), and the Gramm–Leach–Bliley Act of 1999 (GLBA). Some reports also need to go to the Securities and Exchange Commission . Actions that can trigger an SAR being filed include: This bank and insurance -related article

2640-517: The respective rule to virtual currencies. On March 18, 2013, FinCEN issued a guidance regarding virtual currencies , according to which, exchangers and administrators, but not users of convertible virtual currency are considered money transmitters, and must comply with rules to prevent money laundering/terrorist financing ("AML/CFT") and other forms of financial crime, by record-keeping, reporting and registering with FinCEN. Jennifer Shasky Calvery, director of FinCEN said, "Virtual currencies are subject to

2700-453: The same rules as other currencies. … Basic money services business rules apply here." At a November 2013 Senate hearing, Calvery stated, "It is in the best interest of virtual currency providers to comply with these regulations for a number of reasons. First is the idea of corporate responsibility," contrasting Bitcoin 's understanding of a peer to peer system bypassing corporate financial institutions. She stated that FinCEN collaborates with

2760-523: The sanctions charges against him. Judge Keenan's court ordered Banki's release on November 2, 2011. The Appellate court ruled that Judge John F. Keenan had erred at trial in denying Banki's defense's request to instruct the jury on the law that specifically exempts family money as an exception to the sanctions law, permitting such transfers without the need for a license: "However, U.S. depository institutions are permitted to handle funds transfers, through intermediary third-country banks, to or from Iran or for

2820-713: The sanctions charges and highlighted that through Newcomb's administration of the sanctions program in the US the program was "never intended to target the Iranian people" and that "the Iranian-American community commonly and openly uses remittance forwarding service providers, including hawalas to move family funds back and forth between the United States and Iran, typically with no penalty, civil or criminal." On August 16, 2010, Judge Keenan sentenced Banki to 30 months in prison. Shortly after being sentenced Banki filed for appeal. The Iranian American Bar Association along with 10 other advocacy and civil rights groups filed

2880-400: The sanctions charges for which he had been arrested imprisoned for 22 months. In the final court hearing Banki's prison record was cleared. Judge Engelmayer in clearing Banki's prison record called him a "talented man, even brilliant". The judge also stated: ". . . the damage to Mr. Banki's life brought about by his lengthy incarceration, occasioned by his confinement, cannot be measured only by

2940-514: The sanctions law not just against Iran but all countries US had sanctions against. During sentencing, over 120 letters of support were sent to Judge Keenan to ask for leniency. Among those were letters from Nobel Peace Laureate Shirin Ebadi and ex-Director of the Office of Foreign Assets Control (OFAC) Richard Newcomb. In a lengthy letter, Richard Newcomb made the case for Banki's innocence of

3000-679: The staff are permanent FinCEN personnel, with about 20 long-term detailees assigned from 13 different regulatory and law enforcement agencies. FinCEN shares information with dozens of intelligence agencies, including the Bureau of Alcohol, Tobacco, and Firearms ; the Drug Enforcement Administration ; the Federal Bureau of Investigation ; the U.S. Secret Service ; the Internal Revenue Service ;

3060-555: The use of anonymous shell companies for illicit purposes. FinCEN administers the BOIR system to collect and maintain accurate records of beneficial ownership information. This information includes details such as the names, addresses, dates of birth, and identification numbers of individuals who ultimately own or control companies. By centralizing this data, FinCEN supports law enforcement efforts to investigate and prosecute financial crimes, ensuring greater accountability and integrity within

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3120-442: The world: These units often work in conjunction with one another, sharing information and coordinating efforts to tackle financial crimes on a global scale. They are part of a broader network of organizations and agencies committed to financial security and integrity.The Egmont Group of Financial Intelligence Units is the global coordination venue for FIUs. National FIUs include: The Financial Intelligence Unit Network (FIU.NET)

3180-543: The world: FIU.NET is funded by the European Commission and participating FIUs. Currently, the connected EU Member State FIUs are: Austria, Belgium, Bulgaria, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Sweden, Slovenia, Slovakia, Spain, and the United Kingdom. FIU.NET is governed by

3240-417: Was arraigned before Judge John F. Keenan on an indictment charging him with three counts: 1. Conspiracy to violate the U.S.-imposed Iran sanctions and conspiracy to run an unlicensed money transmittal system, 2. Violation of the Iran sanctions, and 3. Running of an unlicensed money transmittal business. The indictment accused Banki of receiving $ 4.7 million in violation of the Iran sanctions. Prosecutors filed

3300-629: Was established by order of the Secretary of the Treasury (Treasury Order Numbered 105-08) on April 25, 1990. In May 1994, its mission was broadened to involve regulatory responsibilities, and in October 1994 the Treasury Department 's precursor of FinCEN, the Office of Financial Enforcement, was merged with FinCEN. On September 26, 2002, after Title III of the PATRIOT Act was passed, Treasury Order 180-01 made it an official bureau in

3360-519: Was not forfeitable nor was it a direct proceed of any crime. Judge Keenan overruled the jury only in the case of the forfeiture verdict on the basis that the jury might have been "confused" and awarded the government prosecutors a money judgment order, essentially ignoring the jury verdict on forfeiture and awarding the US Attorney's office $ 3.4 million, to be paid by Banki. The defense objections throughout trial were overruled. One such overruling

3420-534: Was reported in 2012 that small businesses selling at farmers' markets have been targeted, while politically connected people like Eliot Spitzer were not prosecuted. Spitzer's reasons for structuring were described as "innocent". In February 2019, it was reported that Mary Daly, the oldest daughter of United States Attorney General William Barr , is to leave her position at the United States Deputy Attorney General 's office for

3480-403: Was the judge's decision not to allow for jury instructions on the family money exception from the sanctions law. Essentially, the jury was not told that transfer of family money is legal; that family money can be sent to and received from Iran and is an exception in the US sanctions law against Iran. This would become a material issue at the appellate level and the primary reason for the reversal of

3540-490: Was to target the Government with the use of economic methods to change the behavior of the leadership in Iran toward the United States and the international community at large, and to thwart Iran's support for and funding of terrorism, its efforts to disrupt the Middle East Peace Process and its development of weapons of mass destruction. Central to the effort was to direct and focus the sanctions impact on

3600-634: Was transferred to the Taft Correctional Institution 's deportation prison outside Bakersfield in California. In January 2011 Banki was transferred to the lower-security Taft prison, where he remained pending the appellate decision. Upon release Banki had served 665 days, nearly 22 months in prison. On October 24, 2011, the United States Court of Appeals for the Second Circuit ruled in favor of Banki and reversed

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