Imagine you spent hours and hours in the kitchen carefully preparing meals for someone, only to learn later that, instead of eating those meals, they had ordered pizza, letting your hard work spoil in the refrigerator. You’d probably be steamed. Similarly, you’d probably be a bit peeved if you learned that instead of using your carefully prepared SARs, law enforcement and government agencies simply tossed them in the trash bin out back. After all, financial institutions file a lot of SARs. Nearly a million last year alone. That represents a lot of painstaking effort that can sometimes feel like wasted effort. That’s why FinCEN recently held its annual award ceremony highlighting how those reports you’re filing play a vital role in law enforcement’s investigation processes. Here are a just a few examples of how those SARs may provide law enforcement with just the piece of information they need to thwart a criminal enterprise or to combat money laundering, fraud, corruption, and criminal activity.
1. New York State Police
While reviewing SARs, New York State Police saw that a bank in the Hudson Valley Region was reporting an unusual pattern of cash deposits. The bank believed the cash was coming from illegal marijuana sales. Some deeper investigation revealed that this activity was connected to a larger criminal organization. Information about this organization led to law enforcement uncovering an extensive criminal enterprise of over 100 individuals involved in narcotics dealing, weapons trafficking, cash smuggling, and gang activity. Suspicious activity reporting ultimately led to the arrest and indictment of 55 of these individuals.
After receiving a report on an individual suspected of various fraud and money laundering schemes, local law enforcement referred the individual to the FBI, which was able to make an arrest. This individual, after agreeing to cooperate with the FBI, revealed information about a network of criminals in the U.S. and Canada. The FBI soon discovered that this criminal network was one of the highest priority organized crime organizations with individuals operating all over the world. Authorities determined that the organization was bringing roughly $300 million each year into North America alone. Law enforcement was able to make necessary arrests and put a stop to many of these individuals.
3. Defense Criminal Investigative Service
The Defense Criminal Investigative Service began a long-term investigation based on suspicious activity reports from multiple financial institutions about structuring and excessive credit card charges. Investigators found that one individual was transferring funds to a shell company owned by a U.S. military official to conceal bribery payments he was receiving in exchange for helping him win contracts. The individual paid the official more than $9 million for providing sensitive bidding data through an extensive network of shell companies and bank accounts. Eventually the targets of the investigation pled guilty, and investigators seized $12.3 million in assets.
Besides these three examples, financial institutions were able to provide important information that helped uncover and put a stop to numerous transnational security threats, cyber threats, and other money laundering, drug trafficking, and fraudulent activity. Needless to say, the efforts of financial institutions such as yours to track and report suspicious activity go a long way toward identifying and preventing criminal activity.