"However, the filing of an SAR does not require the bank to cease doing business with the client in question."
This feels broken. Was this intended to prevent competitors from falsely filing SARs against each other to freeze their business? What are the penalties for abusing this system?
> Banks and other financial institutions file SARs when they believe a client is using their services for potential criminal activity.
It sounds like banks file SARs about their own clients. I'm guessing they don't have to cease doing business with the client because that would create an incentive not to file SARs.
SARs are merely suspected illicit activity. The feds investigate and see if the claims have merit. They can also have varying degrees of severity which can affect account closure decisions.
A SAR just means activity is suspicious. That's it - a SAR is not by itself evidence of wrongdoing, just a report to take a deeper look.
"Hey, this persons makes mostly foreign transactions with vague companies" is a SAR. That's not a crime, and it may not be criminal behavior - it's just an indicator that someone should look closer.
Can you imagine if your bank closed your account and refused to do business with you, without any kind of trial or notification, just because you did something that triggered a fraud measure?
Or to put this another way, how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't?
> how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't?
Ugh. I'd pay more for a credit card which didn't block my own transactions. Using a US credit card abroad can be seriously frustrating.
The only thing worse than rapidly increasing airfares on small airlines with websites which barely work is when your credit card refuses to complete the transaction, requiring multiple international phone calls to resolve.
I've had that happen too many times. I've had basically good luck with Capital One provided I tell them in advance which country I'll be in. I think at this point they let me set that online.
Or to put it another way, how do you like it when your content gets DMCA'd with no investigation and no recourse, because the enforcer doesn't want the liability and can't actually investigate? That's what would happen is SARS had to be treated as though they were proof of crimes.
The Feds determine if the activity is illegal. SARS are filed as part of the bank’s duty to report and they are liable if they don’t report the activity. You want to err on the side of “more SARs” so you are covered.
But if they’re leaked - that means reputational damage risk is higher so you’ll get less reports from banks and likely make it a lot harder to see patterns of illegal behavior. That’s why this agreement is in place.
SARs are required to be reported for all daily cash deposits greater than $10K by the Bank Secrecy Act.[1]
Cash heavy businesses could easily hit this level, as well as large transactions that are perfectly legal, so you wouldn't want to stop doing business with a customer, just because they deposited a large amount of cash.
and the threshold is not inflation linked, or location linked. it is just a 50 year misused law that has successfully spent the last half-century stigmatizing the concept of having money to move in the minds of people without money who want it.
Hmm i saw no mention of trump behind behind this. I saw a mention of manafort, and a 1 sentence description describing what he is most famous for: being trumps campaign manager
OK so your point is top line includes Paul Manafort who is connected to Trump, but you cite here the leaks include transactions going back to the time of the Clinton administration?
The Guardian highlighting Paul Manafort as a way to tie this scandal to Trump is interesting for sure. The scandal is certainly bigger than one person.
I have a hunch will go the way of the libor scandal which resulted in mostly fines, and the panama papers scandal which resulted in the journalist (Daphne Caruana Galizia) who broke the details winding up assassinated by a car bomb.
No it's not, it's just the press starting the article with the most famous name on the list: it's entirely expected.
What would be weird is if they topped with Mukhtar Ablyazov (alphabetical order by last name) or Reza Zarrab (reverse alphabetical order by last name).
So literally the only 2 publications remaining with a semblance of journalistic integrity that have proven to be beyond political bias? Sure, that makes complete sense. /s
I'm a paid subscriber to Guardian online and occasionally subscribe to its weekly paper summary; I would agree with its journalistic integrity; while I agree with their perspective though, it actually gets too much even for me these days, and I would not call them "beyond political bias" by ANY stretch of imagination. If nothing else, they explicitly endorse candidates.
The notion of bias is totally meaningless. What you should worry about is truthfulness. Everyone is biased, some people lie even if that means being selective in the sources they use to build their narrative rather than outright fabrication.
I have read the guardian for my entire life, I am aware of it's biases but I would not continue to trust the newspaper if I believed it was lying.
It seems to be an American disease spreading throughout the world to accuse things of bias constantly, when the root issue is just falsehoods and being economical with the truth. A newspaper should aim to represent multiple views but should not shy from having the conviction to both be explicit about what the truth is and who they support.
> In a statement released earlier this month FinCEN condemned the disclosure of the leaked documents and said it had referred the matter to the US Department of Justice.
> “The Financial Crimes Enforcement Network is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed suspicious activity reports (SARs), as well as other sensitive government documents, from several years ago,” it stated.
> “As FinCEN has stated previously, the unauthorised disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports
I just don't find your cognitive dissonance to be relevant.
You’re asking for something to be proved - or supporting evidence that requires a whole dissertation - because your exposure is starting from a position that is fundamentally wrong.
“Suspicious” is a misnomer referring to an automatic reporting threshold, that in fewer additional circumstances allows for discretion in filing. The end.
Like I said, I dont find your cognitive dissonance relevant enough to want to do that research for you. If you do research it, I hope the filter bubble Google put you in lets you get access to this version of reality.
In 2019 for example, the US had 2.7 million SAR filings. (https://www.fincen.gov/reports/sar-stats, all industry types + year 2019 + all states), compared to a touch above 5,000 white collar federal prosecutions (https://www.cbsnews.com/news/white-collar-crime-prosecutions...). It's hard to directly calculate a "false positive rate" from those things, because some criminals may generate multiple SARs and others may simply go unprosecuted, but I think such a vast gulf is pretty inconsistent with an idea that most SARs report crimes.
It's certainly conventional wisdom in financial circles that a SAR is worth about as much as a user report on a Reddit comment.
It seems to be widely believed that nothing came from the Panama Papers, but I think that's only because people hoped to see some CEOs perp-walked to a waiting cop car. There certainly have been repercussions.
>Twenty-three countries have already recovered at least US$1.2 billion in taxes, heads of government implicated in corruption or tax avoidance have resigned or faced prosecution and there have been investigations in at least 82 countries. Mossack Fonseca, the law firm at the centre of the story, has shut down and the Panama Papers have prompted high-level political debates and expedited policy reforms around the world
How big of a proportion do you think that 1.2 billion is when compared to total amount of taxes avoided? I'd be willing to bet less than 1%. The company that was center of the documents no longer exists... and ctrl+f this wiki https://en.wikipedia.org/wiki/Reactions_to_the_Panama_Papers it seems only one person from Venezuela was arrested (and his mom, but she was allowed to go home due to health reasons).
So it seems what I said is still correct... almost no repercussions for white collar crime across the globe. I'd bet it still occurs rampantly.
I could dig it up, but there was a leak about ten years ago where literally thousands of high wealth individuals were caught out hiding money from the IRS. And a a large US money manager was found to be helping thing them.
What happened?
Some people had to pay fines. The company paid a small fine with no charges filed. Leaker went to prison.
It's very much like a mafia investigation. (In some cases it may well be a mafia investigation!) Most of the individual details you get are unreliable, insufficient, or just don't matter very much - but that doesn't mean there's no harm in leaking a list of them.
I think FinCEN's position here makes sense. SARs are supposed to be filed broadly and freely, without liability to the filer, in order to allow regulators to build and understand patterns of behavior. They're "suspicious activity", not "unambiguously bad activity". So from FinCEN's perspective, this is like a leak of confidental police reports - filing reports doesn’t make someone bad, and nobody's going to make the reports if law enforcement doesn't go to bat for the confidentiality!
Well, yeah. The leaker signed an NDA. You of course take the risk that you will be punished by the NDA’s consequences that you sign unless you are using whistleblower statutes. That’s the whole point of the NDA.
Edit: you don’t publish your company’s proprietary source code and then expect you just walk away right? You’d be sued into oblivion. It’s important that people abide by their agreements. Whistleblower statutes exist to ensure protection when fraud, abuse, or other illegal activity occurs. I’m not clear if this actually meets that standard.
What's you're point? This is a normative discussion. The presence of NDAs says nothing about what is morally correct. For example, Harvey Weinstein systematically used NDAs to silence his victims and cover up his violent crimes.
That’s why I mentioned the whistleblower statutes. SARs are not crimes. They are potentially suspicious activity. If there is a crime not being reported after collection of these SARs then blow the whistle. No reason to leak a bunch of them unless you believe the collection of such data to be illegal in the first place (it’s not).
For what it’s worth, the problem is that most folks don’t know what SARs are, when they’re filed, etc. This is basically the equivalent of leaking a bunch of private banking records that banks have to provide to the government, not “leaking hidden crimes that nobody stopped”
It’s financial crimes. If someone leaked investigational records of say, the FBI, while they are investigating an extortion ring, that could seriously compromise any prosecution.
Seems reasonable to me to punish someone leaking information that was meant to be private.
absolutely no doubt that this is a feature of the system.
I recently read "Treasure Islands: Tax Havens and the Men who stole the world" and can't recommend it highly enough. It shows that tax fraud and offshore banking is despite propaganda that "it's dead" very much alive and the US is a central player now. Hollywood still uses Switzerland and the Cayman's but a lot more convenient are setups involving Nevada, New Mexico, etc.
Offshore banking is a key component in maintaining control when an empire retreats/collapses. The French installed puppets in Gabon who let them launder their money until today in a similar fashion that the City of London and the more reckless jurisdictions (BVI) allowed the Brits to keep their loot which they stole in the past 200 years.
we had a chance to burn all this to the ground during the financial crisis but Occupy Wallstreet was just a "leaflet campaign" without teeth. You don't fight a real enemy that subverts the rules of democracy with democratic tools.
I work at a bank, and we get training on this regularly.
One of the main reasons FinCEN requires strict confidentiality on SARs is to not tip off the account owners that they're being watched/investigated.
Investigators will often monitor the accounts to gather enough evidence to prosecute them or to gain intel into broader criminal networks. Regulators also rightfully don't want money launderers to know the playbook and tactics they use to track down these networks.
The secrecy also protects bank employees. If you're a compliance department worker that's reporting on potential criminal activities of terrorists or a criminal network to the authorities, and you think there's a risk you'll be outed, you might be less willing to submit the SAR.
SARS get generated all the time. Any large movement of cash will generate a SARs. That multi million dollar wire from an escrow account after your startup had liquidity event generated a SARs. What do you think the false positive rate of a SARS report it? 99%? 1 out of 100 SARS reports are actual criminal activity.
I should clarify, any large transfer to an individual that hasn’t demonstrated access to large amount of capital will generate a SARS. If your not a private client at your bank and you get a $10mm wire will more than likely will generate a SARS and lots of phone calls from the compliance dept at the bank. That like the text book definition of a suspicious transaction. Low balance accounts getting large transfers.
Kind of ridiculous if you ask me... "possibly corrupt"? Is the court of public opinion taking on suspicious financial activity reports now?
My gut says these leaked reports will have a greater negative impact on current corruption investigations than any positive impact from public consumption.
you're right. this is the weakest leak, specifically aimed to perturb the public consciousness. the legislature called them "Suspicious Activity Reports" and then forget they did it. but they are "Useless Spam Reports". An investigative journalist decided to use the name and the current sentiment against "Banks" and "money" to write these articles.
"Crimes don't matter"
"Democracy doesn't matter"
"Nothing matters"
"You should just accept it"
Does that sum it up pretty well? You seem to have a pretty vested interest in this being ignored if judged by the volume of similar comments you've left in this thread.
I have a general interest in people understanding what this is.
A suspicious activity report is not about a crime, it isn't about anything being suspected of a crime or even actually suspicious.
SARs are an ill thought compliance nuance created by Congress 50 years ago with a ridiculous name.
The headline even has a vested interested in covering its own ass with the wording "possibly corrupt" because their own legal department was like "really?" and the editor in chief was like "but think of the clicks!"
So news organizations have an interest in having their stories heard? Film at 11.
TFA literally makes no accusations, it is simply stating the facts. Manafort was convicted of money laundering and fraud, and the fact that many of these reports were filed on him makes it seem like the system is working as intended. Similarly, Mogilevich is wanted by the FBI. Maybe that should mean there's a reason for banks to stop doing business with him?
No one here is arguing that banks should be required to stop doing business with anyone who triggers one of these reports. The point is that based on retrospect, they haven't been doing a good job of operating on the information they have, so maybe it's time to actually give such a law teeth.
I think the opposite, the law should stop burdening banks and the regulators with these mostly erroneous reports. The SARs didnt necessarily help bust Manafort, the bank already had records of the sender and recipient either way.
The biggest story here for me is I look forward to grepping my name and seeing how many of my bank bonus chasing activities/etc have generated SARs. I guess everyone else will get to see that too. For more interesting/famous people than myself it’s a terrible breach of privacy. There could be lots of interesting stuff in this leak but like you, I very much doubt it will expose much corrupt activity.
I can tell you for certain: if credit card churning generates SARs, then the hit rate on those has to be <1%. There's a lot of consultants out there...
Except we can't grep for our or other people's names because the FinCEN leak isn't necessarily available publicly. It was only (rightly) given to the ICIJ -- even though it was a global team of over 40 journalists trawling through the data trove.
I'll followup now that I'm out of bed and see that my comment seems controversial and counter to the thread.
2000+ reports from between 1999 to 2017 amounting to a total of $2tn. Of those reports they only name-check Manafort, a Russian oligarch, and HSBC. How many people are feeling outrage because of the perceived connection between the current administration and corruption when these reports also cover years from the previous 3 administrations? How many characters connected to powerful Democrats could be found among these 2000 reports?
What if someone at the IRS leaked their flagged accounts as "possible tax fraud" or if Google leaked suspicious traffic logs as "possible cyber terrorism"? How much information could the general public be expected to glean about actual bad actors based on similar reporting? How many people here actually understand what an SAR contains and why it is created? Can anyone cite me what % of SARs turn out to be indicators of actual crimes?
I don't doubt that many of the people in these reports are guilty of crimes, but corruption investigations also take a long time and the more recent reports may very well be relevant to ongoing investigations and having them made public could spook suspects before authorities have gathered enough evidence to bring a charge.
This article seems to be carefully avoiding a very important contextual question - what's the expected value of these "accounting adjustments" for a large organization?
The 2 trillion we are talking about is 'corrupt' financial activity. Money laundering and this sort of thing.
Pentagon financial adjustments are not even close to being related.
Lastly the article you posted says 35 trillion in adjustments, but doesn't say how far back in time they went making adjustments, so that number is meaningless. Whoever this reporter is seems to not be familiar with accounting or finance.
SARs are filed automatically any time the amount is over a certain number, I think the simplest one is at $10k and then there is a more detailed one for some larger threshold amount. There must be millions filed per week.
Have never been able to determine if what someone told me is true... that publicly traded companies are exempt from many of these regulations.
That's incorrect. You're confusing SARs with CTRs, which are reports of cash transactions. SARs are for the most part at the discretion of bank compliance officers, although there are a few "automatic" ones.
SARs are required any time someone is asked to fill out a CTR (which they can be, by the bank, optionally, for any amount) and declines to do so.
Imagine going to your bank and trying to withdraw $3000 or $5000 in cash, and them asking you to fill out a CTR out of an abundance of caution (like the fact that you’ve never made a cash withdrawal of that size before).
Don’t feel like filling out extra forms to get access to your own money? In a hurry and don’t have time? Decline the CTR and say you’ll deal with it another time?
It’s now a criminal offense for the bank to not file a SAR based on your refusal to complete the requested CTR.
Under the Bank Secrecy Act (BSA), financial institutions are required to assist U.S. government agencies in detecting and preventing money laundering, such as:
-Keep records of cash purchases of negotiable instruments,
-File reports of cash transactions exceeding $10,000 (daily aggregate amount), and
-Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion).
Keep records of cash purchases of negotiable instruments,
File reports of cash transactions exceeding $10,000 (daily aggregate amount), and
Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion)
If you do more than $10,000 in cash business/transactions, the bank will (must) file a report -- if you're deposit $8000 one day and $4000 the next day, the bank might be forced to consider it a single transaction for $12,000 -- and file a SAR.
There's fantastic reasons to keep this confidential -- Given that requirements to file are so broad, almost all of these are going to be normal business activity.
> CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Referral.
* make sure the deposits are under $9000, but also not some amount that's "suspicious" like $8,999
* make sure the deposits happen on a regular interval
* make sure the deposits are at the same branch
I also suspect banks don't share information to generate SAR (eg. a deposit of $15,000 at one bank would generate a SAR, but a deposit of $7,500 at two banks on the same day won't generate a SAR), so if you need to deposit more cash then all you need to do is open more accounts at more banks.
Nothing says the bank can't go "hey this guy deposited $90k in cash this year". They may ask you where you're getting it; if you own a bunch of vending machines, you're probably fine. If your answers are evasive or don't make sense, you might be getting a SAR.
$10k is just the automatic threshold for a CTR. A $1 transaction could cause a SAR to be filed, if there was a reason for the bank to be suspicious of it.
Those types of businesses get additional scrutiny from the financial fraud team for precisely the reason they're useful as front businesses (as well as tax evasion).
What does this look like? Does the bank ask for receipts if a Chinese restaurant wants to be their customer? Do they stake out the restaurant to see whether the foot traffic levels correspond to the claimed revenues?
In a lot of countries if you establish a small company and open a bank account for it they will just do the bare minimum, after all if you got a tax number and just got a new company registered you already jumped through a few background check hoops.
Of course they will still run your name through their whatever systems. And eventually if your business starts transacting it'll be constantly looked at by the automated systems.
As long as you don't do anything suspicious, no one will care.
Basically if you behave like all the small shops that have to deposit cash, no one will look twice.
Also, cash is not interesting, the problem is when you start to wire money (or get transfers) to/from places that small kitchens usually don't. And that's when risk and compliance departments might notice the activity.
Yeah, they've thought of this. It's called structuring, and it's a crime[0].
Side note: I see this kind of response a lot on HN. Whenever a precisely-defined law or regulation comes up, there will be the inevitable tricksy engineers pointing out a bug in the program. Except they haven't read the whole program, but only a couple of stanzas. And it's not actually a program. It's not being interpreted by a computer, but by people. At a certain point, rules-laywering will get the actual lawyers to tell you to get out of here with that.
Repeating something I've written here before: Your adversaries are people, not bash scripts.
Curious - how do people who work cash jobs handle this or if your system flags them. I pay our cleaner say $100 in cash. Pretty sure they don't report that to the IRS or pay taxes on it. What happens if they deposit say 2-3k / mo spread across several days? (~30k / yr in total?)
Their AML systems will flag this activity as suspicious, and someone in the back office file a SAR. Think of the financial circuit as closed and traceable. Any untraceable entries and exits into this circuit needs CTRs and SARs.
Untraceable entries/exits: cash, money orders, cashier checks, wire transfers, etc.
The financial fraud teams have models of what cash-based businesses 'should' look like. They don't, per se, care if these folks aren't paying taxes (the IRS does, and they have their own models). The Bank is looking more for things like "I'm a house cleaner...depositing $250k+ a year" (possible, but unlikely) or "I've been depositing 2-3k a month for a couple of years and suddenly I'm depositing 10-20k a month".
You've crushed the dreams of a lot of people who get their tax tips from anonymous internet posters.
"Deposit $9,999 to fool the IRS" is up there with "Consult with top divorce lawyers to keep them from representing you spouse" in the Hall of Bad Legal Advice.
Yeah...there's not a COBOL program running someplace saying IF DEPOSIT IS EQUAL TO 9999.00 THEN FLAG-IT. There's some pretty sophisticated machine learning work being done here, and all the major banks these days have a data science team working the problem.
Why is that sad? Since there are a vast collection of morons who see "transactions over 10k will get flagged" and 'cleverly' say "ah-ha! I shall beat the system with 9999.00!", why wouldn't you want to spot that early and easy?
> The leak focuses on more than 2,000 suspicious activity reports (SARs) filed with the US government’s Financial Crimes Enforcement Network (FinCEN).
I think it's important to get the right mindset on what these are before we cry foul.
All banks will report 'large' transactions to their country's Financial Intelligence bureau. In the US, that's FINCEN. In Canada, that's FINTRAC, where I interned way back in 2006. Here, that means for all transactions over $10,000 CAD (or if the sum of transactions from an account within 24 hours exceeds $10,000), a report is filed, and FINTRAC keeps the report for 5 years while they look for signs of money laundering or terrorist financing. They data mine this to find patterns that indicate criminal activity. In 2006, while I was an intern, the Montreal mafia was brought down this way.
Suspicious Activity Reports, SARs are just what they sound like- the banker says 'something smells funny about this'. They want to let someone know about it. For example, let's say there's a particular person who moves $9,999 every day from his account to another one. That's under the $10,000 reporting limit but the bank can say "That's a bit weird, let's report it with an SAR". They can provide more details of why they're concerned.
The banks aren't the police. They don't know a crime has taken place. That person moving $9,999 every day could be doing something not criminal at all. And it's not the banks place to stop them- because that is just ripe for abuse. "Hey, I think all people of <race> are suspicious, so anytime they move $1000 or more, I file an SAR and close their accounts". Or "Hey, that guy is part of <political organization which I don't agree with>, so I flag all his transactions with SARs".
In this case, there are SARs leaked related to some large transactions involving suspicious circumstances. That doesn't mean there's a crime! But it does mean that someone raised an eyebrow and flagged something so that it could be followed up on by the right government authorities.
It's up to the US FINCEN to decide if a crime took place and to handle it accordingly. You decide if you trust them or not, but that is their role in this.
(Do I think Paul Manafort is innocent? That is a whole different question.)
No, this is applicable to all transactions the bank knows about.
If money enters or leaves a bank account in a quantity greater than $10k within 24 hours, a report is filed with every detail they know about you and about the transactions.
This has been law for more than 20 years. And it's made money laundering really, really hard.
You can have a large transaction that isn't deemed suspicious by your bank. You can have a tiny transaction that is deemed suspicious by your bank, too. CTR = "big transaction". SAR = "suspicious transaction". Often related; not identical.
No, not a SAR. A Large Transaction Report. A SAR is if it's suspicious.
If you ever move $10,000 into our out of your bank account, a report is filed with your country's FinInt agency. Every time. It has whatever ID numbers you gave when you opened the bank account, everything else they know about you, and where the money moved from and to.
In Canada (and maybe the US as well?), this also includes large cash transactions with currency converters, casinos, and jewelry stores- because people kept finding new tricks for moving around money.
Edit: And this is why leaking these things is super serious! There's a lot of personal information in them!
If "more than 2000" SARs are totaling $2tn, I don't think there's a lot of "Grandma Jones got a new bed and finally decided to trust the bank with her $11k secret savings".
> It's up to the US FINCEN to decide if a crime took place and to handle it accordingly. You decide if you trust them or not, but that is their role in this.
The US Attorney, who'd receive the information and decide whether or not to prosecute, and the juries/courts involved in that prosecution. Plus, the typical regulatory loop of Congress, courts, etc. involved in the all of the Department of the Treasury's doings.
The same can be said for the CIA, FBI, Justice Department, etc. If you have a good suggestion for how one can trust their government to have secrets, but also not do bad things, please share it.
The best I can come up with is having the press being their opposition that pokes and prods and calls them out when they see wrong being done. That's what this is, essentially. For maximum harm, you could simple release to the public and spread propaganda. For critical evaluation, leaking to the press is quite normal, I believe.
Banks get punished if there was fradulent activity and they didn't publish a SAR. This means banks will file SARs even when there isn't any real fraud going on, just behaviour that their models flag as "suspicious".
I wire-transfer tens-of-thousands of USD / month from my bank to my wealth-management company for perfectly valid reasons (e-commerce revenue), primarily to exchange to CAD (far better rate than bank) for funding payroll and/or purchase Investments.
With each transfer, my investment company has me fill-out / sign a form declaring Source of Funds.
If the gov’t finds anything suspicious, there’s an airtight paper-trail for all these transactions.
The financial activity is not generally corrupt, it is the act by the which the money is obtained that is corrupt.
The immense pressure of money laundering comes with a lot of consequences to the cost of transactions, the utilization of commercial banks as part of monetary policy, etc. This is one of the core reasons why bitcoin exists, to precisely avoid these kind of banking issues.
Moreover its over-sensationalized with the conflation between money and wealth. All the dollars stashed away in a cayman islands account is doing no harm to anyone: its depreciating as it is as a holding. Money has no effect unless its spent. And whatever is spent is just as good as regular consumption.
It's not even in the interest of government to get the money back: if a few trillion dollars were suddently released into circulation you would have inflation and would not be able to print money that gov is already spending.
Following the money to fight crime has been a ruse.
The $2T focuses on "high-risk individuals from around the world, in some cases even after they had been placed under sanctions by the US government."
So this isn't new "they're not taking this seriously" allegations; it's a methods leak. As a aggressively-pro-transparency advocate, this seems like... a reasonable thing to keep secret, no?
Am I missing something? JP Morgan did the right thing; HSBC was _already known_ to be failing to stop fraudulent transfers; and there's no allegations of impropriety on the part of the government.
There seems to be a serious amount of astroturfing going on here there's no other way to explain all these "every 10k transaction generates a SAR... all these things might be harmless, maybe some startup needed some cash liquidity..."
First these are 2000 SARs over a period of 8 years, so if SARs get filled very often (I have no idea if they do), then this would be a very select few of them. Maybe someone already did a selection based on the specific activity?!
Second this is $2 Tn in 2000 transactions I leave it as an excersise to calculate how much on average that is, but you can be assured this is not some random person buying. I would wager that most nation states very rarely move that amount of money around.
Do the accounts posting this information look suspicious? I’m not doubting your claim at all, merely curious about the prevalence of astroturfing on HN.
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[ 2.3 ms ] story [ 177 ms ] threadThis feels broken. Was this intended to prevent competitors from falsely filing SARs against each other to freeze their business? What are the penalties for abusing this system?
It sounds like banks file SARs about their own clients. I'm guessing they don't have to cease doing business with the client because that would create an incentive not to file SARs.
"Hey, this persons makes mostly foreign transactions with vague companies" is a SAR. That's not a crime, and it may not be criminal behavior - it's just an indicator that someone should look closer.
Can you imagine if your bank closed your account and refused to do business with you, without any kind of trial or notification, just because you did something that triggered a fraud measure?
Or to put this another way, how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't?
Ugh. I'd pay more for a credit card which didn't block my own transactions. Using a US credit card abroad can be seriously frustrating.
The only thing worse than rapidly increasing airfares on small airlines with websites which barely work is when your credit card refuses to complete the transaction, requiring multiple international phone calls to resolve.
But if they’re leaked - that means reputational damage risk is higher so you’ll get less reports from banks and likely make it a lot harder to see patterns of illegal behavior. That’s why this agreement is in place.
Cash heavy businesses could easily hit this level, as well as large transactions that are perfectly legal, so you wouldn't want to stop doing business with a customer, just because they deposited a large amount of cash.
[1] https://www.occ.treas.gov/topics/supervision-and-examination...
Way to pitch it that it’s somehow Trump doing it all.
I wish HN would flag publications like, unfortunately, the guardian, bbc, that are known to twist data to suit a political agenda.
What would be weird is if they topped with Mukhtar Ablyazov (alphabetical order by last name) or Reza Zarrab (reverse alphabetical order by last name).
I'm a paid subscriber to Guardian online and occasionally subscribe to its weekly paper summary; I would agree with its journalistic integrity; while I agree with their perspective though, it actually gets too much even for me these days, and I would not call them "beyond political bias" by ANY stretch of imagination. If nothing else, they explicitly endorse candidates.
I have read the guardian for my entire life, I am aware of it's biases but I would not continue to trust the newspaper if I believed it was lying.
It seems to be an American disease spreading throughout the world to accuse things of bias constantly, when the root issue is just falsehoods and being economical with the truth. A newspaper should aim to represent multiple views but should not shy from having the conviction to both be explicit about what the truth is and who they support.
> “The Financial Crimes Enforcement Network is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed suspicious activity reports (SARs), as well as other sensitive government documents, from several years ago,” it stated.
> “As FinCEN has stated previously, the unauthorised disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports
Government response: Punish the leakers
Collateral Damage, Snowden panama papers...
Imagine if they spend 10% of resources that they spent going after leakers punishing real perpetrators.
You’re asking for something to be proved - or supporting evidence that requires a whole dissertation - because your exposure is starting from a position that is fundamentally wrong.
“Suspicious” is a misnomer referring to an automatic reporting threshold, that in fewer additional circumstances allows for discretion in filing. The end.
I’m baffled how asking for data is revealing my position?
I had the hope that your position is well founded and it would be easy to point to actual data.
I hardly believe that the compliance laws are not accompanied by studies that collect the data that i asked for. So it should be out there.
Good luck.
It's certainly conventional wisdom in financial circles that a SAR is worth about as much as a user report on a Reddit comment.
If they are, they probably don't want the perpetrators to know how much information they have.
If so, their cases may have just been blown apart by these leaks, and the perpetrators are even less likely to get persecuted.
Didn't we have many financial crime leaks this past decade with essentially no repercussions?
>Twenty-three countries have already recovered at least US$1.2 billion in taxes, heads of government implicated in corruption or tax avoidance have resigned or faced prosecution and there have been investigations in at least 82 countries. Mossack Fonseca, the law firm at the centre of the story, has shut down and the Panama Papers have prompted high-level political debates and expedited policy reforms around the world
https://www.transparency.org/en/news/three-years-after-the-p...
So it seems what I said is still correct... almost no repercussions for white collar crime across the globe. I'd bet it still occurs rampantly.
What happened?
Some people had to pay fines. The company paid a small fine with no charges filed. Leaker went to prison.
The system is completely corrupt.
Edit: you don’t publish your company’s proprietary source code and then expect you just walk away right? You’d be sued into oblivion. It’s important that people abide by their agreements. Whistleblower statutes exist to ensure protection when fraud, abuse, or other illegal activity occurs. I’m not clear if this actually meets that standard.
For what it’s worth, the problem is that most folks don’t know what SARs are, when they’re filed, etc. This is basically the equivalent of leaking a bunch of private banking records that banks have to provide to the government, not “leaking hidden crimes that nobody stopped”
It’s financial crimes. If someone leaked investigational records of say, the FBI, while they are investigating an extortion ring, that could seriously compromise any prosecution.
Seems reasonable to me to punish someone leaking information that was meant to be private.
I recently read "Treasure Islands: Tax Havens and the Men who stole the world" and can't recommend it highly enough. It shows that tax fraud and offshore banking is despite propaganda that "it's dead" very much alive and the US is a central player now. Hollywood still uses Switzerland and the Cayman's but a lot more convenient are setups involving Nevada, New Mexico, etc.
Offshore banking is a key component in maintaining control when an empire retreats/collapses. The French installed puppets in Gabon who let them launder their money until today in a similar fashion that the City of London and the more reckless jurisdictions (BVI) allowed the Brits to keep their loot which they stole in the past 200 years.
we had a chance to burn all this to the ground during the financial crisis but Occupy Wallstreet was just a "leaflet campaign" without teeth. You don't fight a real enemy that subverts the rules of democracy with democratic tools.
https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_a...
https://www.theguardian.com/world/2019/nov/14/the-great-amer...
I think you meant to write something like:
You don't fight a real enemy that subverts the rules of democracy with subverted democratic tools.
One of the main reasons FinCEN requires strict confidentiality on SARs is to not tip off the account owners that they're being watched/investigated.
Investigators will often monitor the accounts to gather enough evidence to prosecute them or to gain intel into broader criminal networks. Regulators also rightfully don't want money launderers to know the playbook and tactics they use to track down these networks.
The secrecy also protects bank employees. If you're a compliance department worker that's reporting on potential criminal activities of terrorists or a criminal network to the authorities, and you think there's a risk you'll be outed, you might be less willing to submit the SAR.
No. It will generate a CTR. It may generate a SAR.
Not a bank employee leaking the data.
Why would they leak it? Cause they know the system is fubar.
The simple question to ask is how many people are needed to monitor the system.
Now you have one clown after another saying the banks file zillions of reports every day.
Thats not the issue. Someone has to monitor all that.
And when that someone realizes they arent making a dent, given the volumes, they get sick of the pointlessness and leak the DB.
This is going to keep happening. Swiss leaks, Panama papers, libor etc etc
We have learnt how to scale things up over the last 20 year exponentially.
But oversight can't scale exponentially.
It's unsustainable and pressure will build to ridiculous levels on regulators and law enforcement.
National security...
Seems China practiced this excuse so well that US decides to copy that...
My gut says these leaked reports will have a greater negative impact on current corruption investigations than any positive impact from public consumption.
Does that sum it up pretty well? You seem to have a pretty vested interest in this being ignored if judged by the volume of similar comments you've left in this thread.
A suspicious activity report is not about a crime, it isn't about anything being suspected of a crime or even actually suspicious.
SARs are an ill thought compliance nuance created by Congress 50 years ago with a ridiculous name.
The headline even has a vested interested in covering its own ass with the wording "possibly corrupt" because their own legal department was like "really?" and the editor in chief was like "but think of the clicks!"
TFA literally makes no accusations, it is simply stating the facts. Manafort was convicted of money laundering and fraud, and the fact that many of these reports were filed on him makes it seem like the system is working as intended. Similarly, Mogilevich is wanted by the FBI. Maybe that should mean there's a reason for banks to stop doing business with him?
No one here is arguing that banks should be required to stop doing business with anyone who triggers one of these reports. The point is that based on retrospect, they haven't been doing a good job of operating on the information they have, so maybe it's time to actually give such a law teeth.
2000+ reports from between 1999 to 2017 amounting to a total of $2tn. Of those reports they only name-check Manafort, a Russian oligarch, and HSBC. How many people are feeling outrage because of the perceived connection between the current administration and corruption when these reports also cover years from the previous 3 administrations? How many characters connected to powerful Democrats could be found among these 2000 reports?
What if someone at the IRS leaked their flagged accounts as "possible tax fraud" or if Google leaked suspicious traffic logs as "possible cyber terrorism"? How much information could the general public be expected to glean about actual bad actors based on similar reporting? How many people here actually understand what an SAR contains and why it is created? Can anyone cite me what % of SARs turn out to be indicators of actual crimes?
I don't doubt that many of the people in these reports are guilty of crimes, but corruption investigations also take a long time and the more recent reports may very well be relevant to ongoing investigations and having them made public could spook suspects before authorities have gathered enough evidence to bring a charge.
That is all, carry on.
https://finance.yahoo.com/news/pentagon-35-trillion-accounti...
The 2 trillion we are talking about is 'corrupt' financial activity. Money laundering and this sort of thing.
Pentagon financial adjustments are not even close to being related.
Lastly the article you posted says 35 trillion in adjustments, but doesn't say how far back in time they went making adjustments, so that number is meaningless. Whoever this reporter is seems to not be familiar with accounting or finance.
Have never been able to determine if what someone told me is true... that publicly traded companies are exempt from many of these regulations.
Imagine going to your bank and trying to withdraw $3000 or $5000 in cash, and them asking you to fill out a CTR out of an abundance of caution (like the fact that you’ve never made a cash withdrawal of that size before).
Don’t feel like filling out extra forms to get access to your own money? In a hurry and don’t have time? Decline the CTR and say you’ll deal with it another time?
It’s now a criminal offense for the bank to not file a SAR based on your refusal to complete the requested CTR.
Quoted from above page on SAR reports:
Under the Bank Secrecy Act (BSA), financial institutions are required to assist U.S. government agencies in detecting and preventing money laundering, such as:
-Keep records of cash purchases of negotiable instruments,
-File reports of cash transactions exceeding $10,000 (daily aggregate amount), and
-Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion).
https://www.occ.treas.gov/topics/supervision-and-examination...
Keep records of cash purchases of negotiable instruments, File reports of cash transactions exceeding $10,000 (daily aggregate amount), and Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion)
If you do more than $10,000 in cash business/transactions, the bank will (must) file a report -- if you're deposit $8000 one day and $4000 the next day, the bank might be forced to consider it a single transaction for $12,000 -- and file a SAR.
There's fantastic reasons to keep this confidential -- Given that requirements to file are so broad, almost all of these are going to be normal business activity.
Transactions over $10k aren't automatically a SAR.
https://en.wikipedia.org/wiki/Currency_transaction_report
> CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Referral.
* Depositing $9,999 cash (yeah, still gonna report that)
* Depositing random X,000 cash increments across multiple transactions (yeah, still going to report that)
* Making cash deposits across multiple locations in the same day/week (as if the computer didn’t alert us to multiple cash deposits)
* make sure the deposits are under $9000, but also not some amount that's "suspicious" like $8,999
* make sure the deposits happen on a regular interval
* make sure the deposits are at the same branch
I also suspect banks don't share information to generate SAR (eg. a deposit of $15,000 at one bank would generate a SAR, but a deposit of $7,500 at two banks on the same day won't generate a SAR), so if you need to deposit more cash then all you need to do is open more accounts at more banks.
$10k is just the automatic threshold for a CTR. A $1 transaction could cause a SAR to be filed, if there was a reason for the bank to be suspicious of it.
In a lot of countries if you establish a small company and open a bank account for it they will just do the bare minimum, after all if you got a tax number and just got a new company registered you already jumped through a few background check hoops.
Of course they will still run your name through their whatever systems. And eventually if your business starts transacting it'll be constantly looked at by the automated systems.
As long as you don't do anything suspicious, no one will care.
Basically if you behave like all the small shops that have to deposit cash, no one will look twice.
Also, cash is not interesting, the problem is when you start to wire money (or get transfers) to/from places that small kitchens usually don't. And that's when risk and compliance departments might notice the activity.
No, the bank doesn't ask for receipts or stake out businesses.
If that business has a transaction profile that's out of line with the 'similar business' model, they potentially get flagged.
Side note: I see this kind of response a lot on HN. Whenever a precisely-defined law or regulation comes up, there will be the inevitable tricksy engineers pointing out a bug in the program. Except they haven't read the whole program, but only a couple of stanzas. And it's not actually a program. It's not being interpreted by a computer, but by people. At a certain point, rules-laywering will get the actual lawyers to tell you to get out of here with that.
Repeating something I've written here before: Your adversaries are people, not bash scripts.
[0] https://www.law.cornell.edu/uscode/text/31/5324
Nothing? Nowhere near the thresholds.
Untraceable entries/exits: cash, money orders, cashier checks, wire transfers, etc.
"Deposit $9,999 to fool the IRS" is up there with "Consult with top divorce lawyers to keep them from representing you spouse" in the Hall of Bad Legal Advice.
I think it's important to get the right mindset on what these are before we cry foul.
All banks will report 'large' transactions to their country's Financial Intelligence bureau. In the US, that's FINCEN. In Canada, that's FINTRAC, where I interned way back in 2006. Here, that means for all transactions over $10,000 CAD (or if the sum of transactions from an account within 24 hours exceeds $10,000), a report is filed, and FINTRAC keeps the report for 5 years while they look for signs of money laundering or terrorist financing. They data mine this to find patterns that indicate criminal activity. In 2006, while I was an intern, the Montreal mafia was brought down this way.
Suspicious Activity Reports, SARs are just what they sound like- the banker says 'something smells funny about this'. They want to let someone know about it. For example, let's say there's a particular person who moves $9,999 every day from his account to another one. That's under the $10,000 reporting limit but the bank can say "That's a bit weird, let's report it with an SAR". They can provide more details of why they're concerned.
The banks aren't the police. They don't know a crime has taken place. That person moving $9,999 every day could be doing something not criminal at all. And it's not the banks place to stop them- because that is just ripe for abuse. "Hey, I think all people of <race> are suspicious, so anytime they move $1000 or more, I file an SAR and close their accounts". Or "Hey, that guy is part of <political organization which I don't agree with>, so I flag all his transactions with SARs".
In this case, there are SARs leaked related to some large transactions involving suspicious circumstances. That doesn't mean there's a crime! But it does mean that someone raised an eyebrow and flagged something so that it could be followed up on by the right government authorities.
It's up to the US FINCEN to decide if a crime took place and to handle it accordingly. You decide if you trust them or not, but that is their role in this.
(Do I think Paul Manafort is innocent? That is a whole different question.)
If money enters or leaves a bank account in a quantity greater than $10k within 24 hours, a report is filed with every detail they know about you and about the transactions.
This has been law for more than 20 years. And it's made money laundering really, really hard.
CTRs (https://en.wikipedia.org/wiki/Currency_transaction_report) are not SARs.
You can have a large transaction that isn't deemed suspicious by your bank. You can have a tiny transaction that is deemed suspicious by your bank, too. CTR = "big transaction". SAR = "suspicious transaction". Often related; not identical.
If you ever move $10,000 into our out of your bank account, a report is filed with your country's FinInt agency. Every time. It has whatever ID numbers you gave when you opened the bank account, everything else they know about you, and where the money moved from and to.
In Canada (and maybe the US as well?), this also includes large cash transactions with currency converters, casinos, and jewelry stores- because people kept finding new tricks for moving around money.
Edit: And this is why leaking these things is super serious! There's a lot of personal information in them!
> It's up to the US FINCEN to decide if a crime took place and to handle it accordingly. You decide if you trust them or not, but that is their role in this.
Who watches the watchmen?
The US Attorney, who'd receive the information and decide whether or not to prosecute, and the juries/courts involved in that prosecution. Plus, the typical regulatory loop of Congress, courts, etc. involved in the all of the Department of the Treasury's doings.
With each transfer, my investment company has me fill-out / sign a form declaring Source of Funds.
If the gov’t finds anything suspicious, there’s an airtight paper-trail for all these transactions.
Nothing to see here.
The immense pressure of money laundering comes with a lot of consequences to the cost of transactions, the utilization of commercial banks as part of monetary policy, etc. This is one of the core reasons why bitcoin exists, to precisely avoid these kind of banking issues.
Moreover its over-sensationalized with the conflation between money and wealth. All the dollars stashed away in a cayman islands account is doing no harm to anyone: its depreciating as it is as a holding. Money has no effect unless its spent. And whatever is spent is just as good as regular consumption. It's not even in the interest of government to get the money back: if a few trillion dollars were suddently released into circulation you would have inflation and would not be able to print money that gov is already spending.
Following the money to fight crime has been a ruse.
So this isn't new "they're not taking this seriously" allegations; it's a methods leak. As a aggressively-pro-transparency advocate, this seems like... a reasonable thing to keep secret, no?
Am I missing something? JP Morgan did the right thing; HSBC was _already known_ to be failing to stop fraudulent transfers; and there's no allegations of impropriety on the part of the government.
Seriously: what's the motivation behind the leak?
To let criminals know which banks they can trust?
First these are 2000 SARs over a period of 8 years, so if SARs get filled very often (I have no idea if they do), then this would be a very select few of them. Maybe someone already did a selection based on the specific activity?!
Second this is $2 Tn in 2000 transactions I leave it as an excersise to calculate how much on average that is, but you can be assured this is not some random person buying. I would wager that most nation states very rarely move that amount of money around.
https://news.ycombinator.com/item?id=24535241 (535 points/220 comments)
https://news.ycombinator.com/item?id=24535903 (131 points/16 comments)
https://news.ycombinator.com/item?id=24539132 (110 points/26 comments)
https://news.ycombinator.com/item?id=24536630 (83 points)