Anti-Money Laundering in a Nutshell: Awareness and Compliance for Financial Personnel and Business Managers

Table of Contents
About the Author
Acknowledgments
Introduction
Chapter 1: What Is Money Laundering?
	Turning “Bad” Money into “Legitimate” Money
	Money Laundering All Around Us
	How Money Is Laundered
	Why AML Efforts Are Important
	The Three Stages of Money Laundering
		Placement
		Layering
			Why Layering Works
		Integration
		Putting It All Together for a Payday
		Case Study
	Who Launders Money
	Summary
Chapter 2: Methods of Money Laundering
	Structuring
	Bulk Cash Smuggling
	Money Service Business (MSB)
		Regulations Involving Money Service Businesses
	Money Orders
	Wire Transfers
		How a Wire Works
	Trade-Based Money Laundering (TBML)
		Over- and Under-Invoicing of Goods
		Black Market Peso Exchange
		Underground Banking System (Hawala)
		Red-Flag Indicators of Trade-Based Money Laundering (TBML)
	Correspondent Banking
	Online Banking
	Cyber Banks
	Smart Cards
	Prepaid Cards
	Credit Cards
	ATMs
	Cash-Intensive Business
	Autos
	Real Estate
		Price Manipulation
		Real Estate Shell Game
	Gold
	Diamonds
	Insurance
	Casinos
	Summary
Chapter 3: Federal Regulations
	1970: Bank Secrecy Act
	What Constitutes a Financial Institution
	Currency Transaction Report
		Currency Transaction Exemptions
		Why a CTR Is Important to Law Enforcement
		United States to World Comparison: Currency Transaction Reporting
		Form 8300
	1986: Money Laundering Control Act
	1990: FinCEN
	1992: Annunzio-Wylie Act
	1994: Money Laundering Suppression Act
	1998: Money Laundering and Financial Crimes Strategy Act
	2001: USA PATRIOT Act
	Office of Foreign Assets and Control
	Foreign Account Tax Compliance Act
	The Anti-Money Laundering Act (AMLA) of 2020
	Summary
Chapter 4: International Standards
	Various Organizations That Create Guidelines
		The Financial Action Task Force
		Basel Committee on Banking Supervision
		Wolfsberg
		Egmont
		European Union
		International Monetary Fund
		Transparency International
	Economic Sanctions
	USA PATRIOT Act
		Section 311
		Section 312
		Section 313
		Section 319
	Summary
Chapter 5: Building a Quality AML Program for Financial Institutions
	Recommended Elements of a Quality AML Program
	The Five Pillars
		Internal Policies and Procedures
		Designated Compliance Officer
		Independent Audit Function
		Training
		Customer Due Diligence
	Risk Management
		Conducting Due Diligence
		Customer Risk
		Product and Service Risk
		Geographic Risk
	Ultimate Beneficial Ownership
	Common Program Deficiencies
	Summary
Chapter 6: Know Your Customer and Customer Identification Program
	Elements of a KYC Program
		Customer Identification
		Basic Customer Due Diligence
		Beware Shell Companies
		Identifying Customers Online
		Monitoring Transactions
		The Diligences
		Start with a Checklist
		Beware of “Voo-Due” Diligence
	When to Perform Due Diligence or Enhanced Due Diligence
		Perform Risk-Based Due Diligence
	Sources of Intelligence
		Let’s Fill In Some of the Blanks
	Other Special Considerations
		Transaction Monitoring
		Correspondent Banking: Know Your Correspondents
		Politically Exposed Persons
	Summary
Chapter 7: A SAR Is Born
	The Back Story
	Getting to Suspicious
	Hidden Value of SARs
	30/60/90 Rule
	Completing the SAR
		A fundamentally good SAR narrative should contain the following:
		There are some common mistakes that should be recognized:
		Here is additional SAR completion information:
	Why Financial Institutions Need to File
	What Happens After You File
	Law Enforcement Contact
	Suspicious Activity Report Statistics
	Summary
Chapter 8: Tips for Law Enforcement and Financial Crimes Investigators
	The “You Must Be an Accountant Theory”
	What Do Bankers Do
	What Regulators Do
		Who Are the Regulators?
		Getting in Touch with Regulators
	SAR Power
	Other Information Financial Institutions May Provide
		The following is the information available from FinCEN:
		The following is information available from a financial institution:
	Developing the Investigative Mind
		Use Your Instincts
		Tips for Developing the Investigative Mind
	How I Got Here
	Summary
Chapter 9: Fraud and Anti-Money Laundering
	Merging the Fraud and AML Units
	Law Enforcement’s Role
	A Suggestion for Dealing with Your Own Personnel
	Types of Fraud
	Summary
Chapter 10: Beyond the Basic Predicate Crimes
	The Wildlife Trade
	Cryptocurrencies
	Human Smuggling/Trafficking
		Possible indicators for financial institutions are
		Arts and Antiquities
	Geographical Targeting Orders (GTOs): A Tool for Combating Money Laundering
		Red Flags
	Summary
Chapter 11: What Could Possibly Go Wrong?
	If You Think Compliance Is Expensive, Try Non-compliance
	Inside the White-Collar Criminal Mind
	Last Words
Appendix A: Money Laundering Red Flags
	Potentially Suspicious Activity That May Indicate Terrorist Financing
Appendix B: Code of Federal Regulations Title 31 Section 1020.320
	§ 1020.320 (formerly 103.18) Reports by banks of suspicious transactions.
Glossary
Index