T4 B2 FinCEN Matters 2 of 2 Fdr- Entire Contents- Government Reports- Withdrawal Notices- Power...

8/14/2019 T4 B2 FinCEN Matters 2 of 2 Fdr- Entire Contents- Government Reports- Withdrawal Notices- Power Point- Org Ch

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Operation MeltdownDrug Proceeds

D r u g Traffickers Gold Supplier Gold Co mpa n y U .S.

Money Broker -U.S.Sh ipment o fDrugs to U.S. Assopia te

Smugglec / Cour ie r

U . S . Dol la rs /Pesos Gold fo r PesosColombianDrug Car te l

Co l o mb i a n BMPEB R O K E R

Colombian Go ldCompany/Ref inery

In or about January 1999, the El Dorado Task Force (LEA's from ICE and IRS) beganinvestigating certain narcotics traffickers that were laundering cash proceeds byconverting the cash into gold and then smuggling the gold to South and Central Am erica.According to information developed as a result of the investigation, Colombian narcoticstraffickers ha d large amounts of cash narcotics proceeds in the New York area that neededto be repatriated to Colombia for payment for additional narcotics and to capture theprofits of their sales. Thus, these traffickers desired to launder the cash to Colombia, andultimately convert the U.S. dollars into pesos in Colombia. Some of these traffickersachieved this goal by using the services of "money brokers" in the New York area.

One of the methods used by these mon ey brokers to launder the money to Colombia was toconvert th e cash into gold. Using this method, the money brokers employed couriers topick up cash at designated locations an d deliver the cash to designated gold an d preciousmetal suppliers. The suppliers then provided gold to the couriers in exchange for the cash.In some cases, the gold suppliers m olded the gold into common items, such as tools, beltbuckles, screws an d bolts, or other types of hardware, to make the gold less likely to bedetected by Customs inspectors as it was taken out of the country. The gold was thensmuggled to Colom bia, either by couriers or in cargo. Once the gold arrived in Colombia,it was sold to gold refiners for Colombian pesos, which w ere then delivered to m oneybrokers and, ultimately, to the narcotics traffickers.


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W I T H D R A W A L N O T I C ERG: 148Box: 00001 Folder: 0002 Document: 6Series: Team 4 FilesCopies: 1 Pages: 2

ACCESS RESTRICTEDThe item identified below has been withdrawn from this file:

Folder Title: FinCEN Matters (2 of 2)Document Date:Document Type: Talking Points/Briefing PaperSpecial Media:From:To:

Subject: Treasury response to question re: international finance investigations

In the review of this file this item was removed because access to it isrestricted. Restrictions on records in the National Archives are stated ingeneral and specific record group restriction statements which are availablefo r examination.

NND:401Withdrawn: 10-01-2008 by:RETRIEVAL #: 401 00001 0002 6System DocID: 4710


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Q&A: FinCen - Patterns ofterrorist financingQ. What patterns of terrorist financing are we seeingwith respect to charitiesand hawalas in particular?(A detailed description of patterns of terrorist financial activity is provided separately).A. Reconstruction of financial activities linked to the September 11 hijackers, along withongoing law enforcement investigations of terrorist financing, indicate that terroristfinanciers are adept at moving funds in ways that that do not trigger automatic reports orsuspicious activity reports in the U.S. or elsewhere; using international funds transfersystems and associated correspondent banking relationships to hide largertransactions; routing transactions through non-cooperative jurisdictions to reduce therisk of exposure to regulatory or law enforcement scrutiny; using ATMs to facilitateaccess to cash and reduce personal contact with bank staff; and using non-traditionalmoney movement systems, such as hawala, in some parts of the world to avoidtraditional banking channels altogether. These patterns are not indicative of terroristfinancial activity per se, and in fact involve methods that havebeen available to, andused by, organized crime and drug traffickers for decades. The use of charities tofacilitate the movement of terrorist funds, which has been documented by lawenforcement following the events of September 11, requires further research todetermine the extent to which charitable organizations have been used, wittingly orunwittingly, as links in the terrorist financing chain. Although hawalas have not beenlinked to terrorist financing in the U.S., they are known by law enforcement to have beenused in some parts of the world to move terrorist funds. They are problematic becausethey operate outside the regulated financial industry and offer a high degree of secrecyand lack of record keeping. As required by the Patriot Act, Treasury will provide acomprehensive report to Congress in October 2002 on the implications of hawalas andrelated alternate remittance systems in terrorist financing.


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DEPARTMENT OF THE TREASURYFINANCIAL CRIMES ENFORCEMENT NETWORK

A U B 7 2 0 0 2

MEMORANDUM FO R EDWARD HNGMANASSISTANT SECRETARY (MANAGEMENT)THROUGH: JIMMY GURULE*UNDERSECRETFROM: James F.DirectorSUBJECT: Proposed Reorganization o f FinCENCreated in 1990, the Financial Crimes Enforcement Network (FinCEN) has served as thenational central clearinghouse for broad-based intelligence and information sharingrelative to money laundering, terrorist financing, and other financial crimes. Starting asan assembly of highly skilled financial analysts and information technology experts,FinCEN's role in those areas was significantly expand ed by virtue of severalCongressional an d Departmental determinations and mandates. Included am ong themwas the designation of FinCEN as administrator of the Bank Secrecy Act (BSA) in 1994,as well as FinC EN 's elevation to bureau status following the enactment of the USAPATRIOT ACT in 2001.FinCEN continues to support the law enforcement, intelligence, regulatory, an dinternational efforts against financial crime; and to provid e U,S; policymakers withstrategic analyses of domestic and worldw ide money laund ering developments, trends,and patterns, It works toward those ends through information collection, analysis andsharing as well as technological assistance and innovative, cost-effective implementationof the BSA and other Treasury authorities.Also, during the past three years and in parallel to the increased responsibilities,FinCEN's human resources have increased significantly. At present, 216 permanentemployees are on board and we anticipate a total of approximately 240 by December2002, Our w orkforce is supplemented by approximately eleven dctailees from otheragencies as well as approximately one hundred eighteen contract employees supportingou r mission.Because of these increased responsibilities coupled with the corresponding resourcerequirements, it has becom e necessary for FinCEN to organizationally restructure inorder to effectively and efficiently continue to fulfill its mission.


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Off ice of Investigative Support International Case StatisticsTimeIncrement

2000 (Jan-Jun)2000 (Jul-Dec)2000 TOTAL2001 (Jan-Jun)2001 (Jul-Dec)2001 TOTAL2002 (Jan-Jun)2002 (Jul-Dec)

2002 TOTAL2003 (Jan- June)2003 (July-Nov)

Incoming Requests(Foreign/DOJ-OIA)102150252

14823 338124 823948734 2220

OutgoingReferrals

17264333-148181

-25651 .30711680

Totals

11917629518138 156250429079445830 0

Increased caseload from 2000 to 2002:Incoming requests 193 %O utgoing refe rrals 714%Total cases 270%


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Off ice of Investigative Support International Case StatisticsTimeIncrement

2000 (Jan-Jun)2000 (Jul-Dec)2000 TOTAL2001 (Jan-Jun)2001 (Jul-Dec)2001 TOTAL

TerroristFinancing 20012002 (Jan-Jun)2002 (Jul-Dec)2002 TOTAL

TerroristFinancing 20022003 (Jan- June )2003 (July-Nov)

TerroristFinanc ingJan toN ov 2003

TOTALTERRORISTFINANCING

Incoming Re quests(Foreign/DOJ-OIA)102150252

14823 3381

1224 823 948738

34 222 0

35

OutgoingReferrals1726433314818111125651307

22611680

10

Totals

11917629518138 1562123

504290794264

45830 0

45

123

26 4

45

432Increased caseload from 2000 to 2002:Incoming requests 193%O utgoing referrals 714%Total cases 270%

Statistics are as of November 4, 2003


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11/24/02 7:3SAM: aozeaataag ' ODt or trie Treasury Now Delni ; Page11/23/02 SAT 2 2 : 0 9 FAI 2026221829 . U S TREASURY D E P A R T M E N T 01008Secnon fo r Options Forttoho ^

jon! Financial Crimes Enforcement Network (FinCEN)Organization's Mission Statement:T he mission of FinCEN is to support law enforcement investigative efforts and fosterinteragency and global cooperation against domestic and international financial crimesand to provide U.S. policymakers with strategic analyses of domestic and worldwidemoney laundering developments, trends, and patterns. FinCEN works toward those endsthrougb information collection, analysis, and sharing, iswell as technological assistanceand innovative, cost-effective implementation of the Bank Secrecy A ct (BSA)and otherTreasury authorities.Overview of Oryanteation's M aior Goals & Objectives:FinCEN's activities supp ort Treasu ry's strategic goal to "Combat M oney Laundering andOther Financial Crimes" as well as T reasury's top priorities he fight against terroristfinancing and money laundering. T he bureau 's strategic objectives include:

- Support the Financial Aspects of Investigation* by providing quality and timelyinvestigative support, as well asnetworking to its customers in the fight againstmoney laundering, terrorist financing, and other financial crimes.

- Identify financial Crime Trends an d Patterns for law enforcement, regulators,and financial institutions by applying strategic analysis techniques to an array of datacollected pursuant to the B SA, obtained through commercially available sources, orreceived by law enforcement.

- Foster International Cooperation by promoting global cooperation throughencouraging and sup porting other countries to establish financial intelligenceunits,and strengthening the mechanisms o facilitate the exchange of information.

- Administer the BSA Effectively in partnership w ith the financial services industry,the financial regulatory agencies, and the law enforcement community in order tosupport the prevention and detection of money laundering, terrorist financing, an dother financial crimes.- Strengthen M a n agemen t Sup po r t by building efficient and effective management

processes and adm inistrative support to accomplish FinCEN's mission.Overview of Organization's Programs and Activities:FinCEN supports law enforcement investigative efforts and fosters interagency andglobal cooperation agabstdomestic and international financial crime. FinCE N alsoprovides U.S. policymakers with strategic analysis of domestic ind worldwide moneylaundering developments, trends, and patterns. FinCEN works toward these ends throughinformation collection, analysis, and sharing, as well as technological assistance, n d

M/U/JD02

NCTA000066603


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W I T H D R A W A L N O T I C ERG: 148Box: 00001 Folder: 0002 Document: 7Series: Team 4 FilesCopies: 1 Pages: 9

ACCESS RESTRICTEDThe item identified below has been withdrawn from this file:

Folder Title: FinCEN Matters (2 of 2)Document Date:Document Type: SummarySpecial Media:From:To:

Subject: feedback from law enforcement customers of FinCENservices

In the review of this file this item was removed because access to it isrestricted. Restrictions on records in the National Archives are stated ingeneral and specific record group restriction statements which are availablefo r examination.

NND:401Withdrawn: 10-01-2008 byRETRIEVAL #: 401 00001 0002 7System DocID: 4711


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.cfiV/f1

?clous Aci

I7OII5

SAR BulletinInformation drawn from the Suspicious Activity Reporting SystemJanuary 2002

Aspects of FinancialTransactions Indicativeof Terrorist Funding

This Bulletin is provided to alertfinancial institutions to financial transac-tions and methods that could indicatefundraising associated with variouscriminal activities including terrorism.

This Bulletin provides synopses ofFinCEN's investigative support describ-ing financial transactions that may beassociated with criminal fundraisingactivities. This information was derivedfrom Suspicious Activity Reports (SARs)and other Bank Secrecy Act (BSA)information filed by depository institu-tions. Each case example is followed bya set of indicators of fundraising activitythat were extracted from the case. SARnarratives were used extensively in thedevelopment of these indicators.

The information provided in thisBulletin is intended to assist financialinstitutions in identifying transactionsthat may be linked to potential terroristfinancial activity. The indicators of suchactivity outlined inthis Bulletin areintended to augment existing systemsand procedures used by financialinstitutions to identify suspicious orunusual activity that may be of interestto law enforcement.

Issue 4Taken individu ally, the indicators do not

necessarily equate to terrorist or othercriminal financial activity.Combinationsofindicators should raise the level of concernaboutpotential terrorist financing orothercriminal context. For example, referencestooccupation ornationals ofcountriesassociated with terrorist activityasreportedin SARs should not, on their own, betakento indicate potential terrorist activity.Butsuch indicators when partof the largergroupingof indicators could add to thesuspicion of potential terrorist activity.Case # 1

SAR reporting identified activityinvolvingmultiple payments by check froma business account of approximately$420,000to a securities brokerage in theU.S. Theaccount wasalso used to wiretransfer a total of $2.1 million intoand outofbusiness andpersonal accounts in aPersian Gulf State. In addition, a Cur-rencyTransaction Report (CTR) was filedon a cash withdrawal of $ 11,000 from theaccountby an individual with a foreignpassport.Two individuals with signatureauthority on the account were alsoinvolved in two otherbusinesses, bothofwhich are the subject of CTR filings forcash withdrawals totaling $43,000.

The indicators and patterns ofactivity described in the SARs thatcould be associated with funds collectionand movement relating to terroristfinancing include:

United States Department of the Treasury Financial Cr imes Enforcement Network


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F I N A N C I A I C R I M I - . S E N F O R C E M E N T N F . T V V O R K

Financial CrimesEnforcement Network(FinCEN)

2003-2008Strategic Plan

September 30, 2003

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