FinCEN gave out its first-ever Law Enforcement Awards (during National Police Week, no less) to law enforcement agencies who use BSA reporting data (e.g. SARs and CTRs) to further their cases. Why?
There are two primary goals of the program. First, to recognize law enforcement agencies who made effective use of BSA data to obtain a successful prosecution. And, second, to provide concrete evidence of the value of BSA data to the financial industry.
Who are the winners? In the SAR Review/Task Force category, it was the Boston PD, for example:
BSA data provided the leads that helped the Boston BSA Financial Review Task Force, hostedby the IRS, identify a multi-million dollar Ponzi scheme – the largest Ponzi scheme in that citysince the days of the infamous Charles Ponzi. The BSA reporting that started it all was ofrelatively low dollar amount. But local law enforcement, recognizing the threat to thecommunity, seized on the information provided in the BSA reporting and acted to prevent furtherlosses. And a further review of BSA filings revealed additional instances of possible structuring,money laundering, and other suspicious activities. At least 42 victims lost more than $10 millionthrough this scheme. In one of the most significant aspects of this case, prosecutors indicted thedefendants before any victims realized that they had been duped. In addition, this case is the firstinstance where prosecutors used a recently enacted state money laundering statute to seize fundsin bank accounts. The defendants claimed to be working with real estate developers who hadtrouble getting conventional loans, and victims were promised returns of 8 percent interest.However, the defendants used the investment money for living a lavish lifestyle and gambling.The owner of the financial company operating this scheme was sentenced to serve 10-12 years;the defendant’s spouse was sentenced to serve 2 years; and the defendant’s son was sentenced toserve 2 years. This case demonstrates that all BSA reporting has value, no matter the dollaramount involved.
There were six categories in which FinCEN recognized exceptional results, in total.