FinCEN deploys operation to detect drug trafficking money

The Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury reported that it is carrying out a pioneering operation of its kind, which consists of processing data from more than one million records to detect drug trafficking networks and the transactions they carry out in non-banking financial companies.

These are entities that are not banks, but offer money transfers, electronic transfers, exchanges and other services that are carried out with cash.

Using advanced technology, FinCEN strengthened its ability to transform fragmented information into high-level “trusted leads” to detect resources of illicit origin.

The project focuses on more than 100 US transmitters operating along the southwest border that could be found in noncompliance with regulations designed to detect and combat illicit resources.

The scheme resulted in the issuance of six notices of investigation, dozens of inspection referrals to the Internal Revenue Service, and more than 50 compliance disclosure letters.

“This is an ongoing operation in which FinCEN will investigate the facts and, where appropriate, seek to impose civil monetary penalties, file civil lawsuits, issue warning letters and refer cases to criminal authorities for intentional violations,” he warned.

He stated that failure to comply with the Bank Secrecy Act deprives law enforcement and national security agencies of crucial financial information and increases the risk that transmitters will facilitate money laundering and other criminal activities.

“These phased actions are designed to address money laundering vulnerabilities created by transmitters that appear to violate the Bank Secrecy Act,” the Treasury Department’s website states.

The agency detailed that this operation is based on the review of more than one million currency transaction reports and 87 thousand suspicious activity reports, which financial institutions must submit to FinCEN.

For the Treasury Department, transmitters operating along the southwest border may face increased exposure to illicit activities, such as drug money laundering, smuggling of undocumented immigrants and other serious crimes.

A month ago, the United States government issued an alert asking money transmitting companies to strengthen controls to “detect, identify and report” “suspicious” activities related to fund transfers between that country and Mexico carried out by undocumented foreigners, which included remittances (https://t.ly/zI0OG).

In Mexico, last August, Sandro García Rojas Castillo, a consultant specializing in the prevention of money laundering, commented that the new measures that the United States government has taken to combat money laundering and terrorist financing – such as the designation of six Mexican drug trafficking groups as transnational terrorist organizations – invite the exchange center sector to carry out its operations with a more rigorous risk approach.