Most Read
Image 01 Image 02 Image 03

San Bernardino terrorists’ suspicious transactions raise issue of tightening federal reporting

San Bernardino terrorists’ suspicious transactions raise issue of tightening federal reporting

Transactions potentially fit reporting requirements, but 30 days reporting period would have been too late.

Emerging reports indicate Syed Farook made a series of questionable banking transactions in the weeks before he and his wife killed fourteen people in their terrorist attack in San Bernardino.

These transactions raise yet again the question of whether financial institutions could play a larger part in interdicting terrorists.  The transactions may have been subject to reporting requirements under the Bank Secrecy Act (“BSA”), but the reports would have come too late.

Under the BSA and supporting regulations financial institutions must file Suspicious Activity Reports (“SAR”) within 30 days of a variety of large, unusual or structured transactions.  A structured transaction or series of transactions is designed to evade reporting requirements or additional scrutiny.  The Federal Financial Institutions Examination Counsel’s (“FFIEC”) Examination Manual notes that “[s]uspicious activity reporting forms the cornerstone of the BSA reporting system.”

According to the Financial Crimes Enforcement Network (“FinCEN”), the BSA:

requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities.

The FFIEC’s guidance on structured transactions notes further that, “[e]ven if structuring has not occurred, the bank should review the transactions for suspicious activity.”

Tracking terrorists through the flow of money and cutting off their resources has been a major focus in the war on terror.  Yet despite SARs’ front-line role in counter-terrorism efforts, FinCEN reports dozens of enforcement actions since 9/11.

Farook reportedly received a $28,500 deposit and subsequently withdrew $10,000 cash and made three separate $5,000 transfers to his mother. The deposit, the $10,000 cash transaction and the repeated transfers to Farook’s mother all could have been subject to additional scrutiny as structured transactions under the BSA.

The banks connected with these transactions have declined to comment on the investigation, including the specific question of whether the $10,000 cash withdrawal triggered reporting requirements.

Institutions subject to the BSA must file a SAR within 30 days after the underlying event, and Farook’s reported transactions were all within two weeks of the attack, so no SAR would have been required by the time of the attacks in any event.  It remains to be seen whether Farook made any other suspicious transactions outside the 30-day reporting window.

The BSA’s 30-day grace period for filing SARs presumably reflects the practical realities of operating a financial institution processing millions of transactions or more per day.

Identifying, investigating and compiling the necessary information on potentially suspicious transactions cannot be done instantaneously.  Still, with banks unwittingly facilitating terrorist attacks at least as far back as 9/11, it is worth revisiting what transactions require reporting, under what circumstances, and how quickly, as well as what analytical technology might be available to identify suspicious transactions more efficiently.

DONATE

Donations tax deductible
to the full extent allowed by law.

Tags:

Comments

Tightening controls is not the answer. Federal agencies, (IRS) have already abused these regulations. Regulations are not 100% preventative anyway. Armed citizens would have ended the slaughter immediately. The terrorists are already in the country. They can operate under the radar if they are careful. BSA will only catch the sloppy terrorists. What about the rest? Like it or not, armed citizens are now necessary. The open borders (passive invasion on the South and aggressive invasion by the Dems via Syria) are only making all of this worse. BSA will only catch some.

Since the loan was obviously a fraudulent transaction- they had no plan to pay it back- shouldn’t the loan company be able to sue the mother for return of the money since it was transferred to her?

    TX-rifraph in reply to gospace. | December 9, 2015 at 10:00 am

    Under Dodd-Frank, et al, it may require more documentation to NOT make a loan than to make it especially if one does not want to be labeled Islamophobic or whatever. Collecting on the defaulted loan calls in another big set of laws and regulations. If you apply too much logic, you may get a severe headache.

    You can thank the ruling class in D.C. and the MSM who helped put them there for all of this mess.

    Milhouse in reply to gospace. | December 9, 2015 at 10:14 am

    Surely the assets they left behind should be enough to repay the lender.

    Ragspierre in reply to gospace. | December 9, 2015 at 10:24 am

    I think there would be a good case for doing that very thing. The question is whether the amounts would justify the expense of a law suit.

      I think that the answer to that is a resounding “no”.

      Besides, they’ll need to answer their own questions if the FBI looks into whether this was just a transaction between strangers or a sweetheart terror financing deal.

So, in the name of fighting terrorism, we should give an oppressive government another tool with which to choke the life out of us?

No.

(Example,for those who may have forgotten, remember how the current administration misused banking regulations to squeeze legal firearms dealers?)

Agree 100% with the other negative comments.

1) more government monitoring is not the answer

2) the Feds still wouldn’t act on the real time intelligence it gets

3) these transaction monitoring are part of the war on cash so the government can complete total surveillance of your activities

4) these regulations enable civil asset forfeiture of your cash holding, read the numerous stories about grabbing cash amounts in excess of these regs

The point about firearms dealers was just one of money examples and an excellent one in the post above.

I will not support giving up my freedoms and privacy at every scare. It is the 2nd amendment I turn to protect myself from danger like the San Bernadino shooter.

Expect other moves – as soon as a terrorist event occurs, agencies trot arguments out that encryption was a problem and that back door codes are needed into encrypted systems.

Yet the reality is that the intelligence is likely there in front of us – unencrypted, in plain sight but ignored because of bureaucracy or political correctness.

These will become tools to oppress the tea party – the real enemy to many government workers – not people who kill Americans but don’t threaten those who wield this power …

Rant over. Let’s hope for better posts from Jonathan Levin going forward. 🙂

No. Enough with all this snooping, turning banks from service providers with a fiduciary duty to act in the customer’s best interest into government spies on the customer. What has happened to the privacy in our persons and papers that the republic was founded to protect? Where can a person go now for privacy in his finances, which are in our society considered so intimate. We’re more willing to talk about our sex lives than about our finances, and yet we’ve been lulled into admitting a spy corps into our accounts that we would never admit into our bedrooms.

Even if we stipulate the dubious proposition that all this will actually save lives, is it worth the sacrifice? If we were to station police monitors in every home we might be able to prevent any amount of domestic violence, serious injuries and murders, as well as suicides, accidents, etc., but would we contemplate such a thing even for a moment? No, we’d rather put up with the casualties than subject ourselves to such tyranny.

Supposing the reporting period had been 5 days instead of 30, or even 1 day, and these transactions had been reported promptly; would anyone have noticed? Would it have stood out from all the normal transactions that people engage in all the time for all sorts of reasons of their own? And if someone had noticed, would they have a reason to devote the resources to find out what was going on? And if they had, would they have found out what was going on before it happened? What would have given it away? How would they possibly have known that this was important, and not just someone perhaps cheating on his taxes or his wife, in which case the tiny amount wouldn’t justify any urgent action?

Meanwhile, look at the damage we’ve taken from these monitoring systems. People have all sorts of reasons to structure transactions. It’s really none of anyone’s business. Look at what happened to Elliot Spitzer. I shed no tears for him, it really couldn’t have happened to a more appropriate person, but at the same time if it happened to him it could happen to anyone, and that should concern us more than terrorists. Spitzer was a nasty piece of work, but had he been a decent person the same thing would have happened. (Even if you’re one of those fuddy duddies who thinks buying sex makes one a bad person who deserves to have bad things happen to them, what if he’d been seeing a psychiatrist and didn’t want his wife to know? Or what if he’d been making restitution for some old wrong, or helping some relative that his wife didn’t like, or any number of other things that people might have occasion to do.)

I agree with all those comments above, and I’m proud of the posters here.

Just goes to show that the snooping doesn’t work. They were obviously up to something and all of the red flags were there. Someone just didn’t want to see it.

Without profiling, nothing “works” to stop terror attacks.

    Sammy Finkelman in reply to Daiwa. | December 9, 2015 at 3:25 pm

    What gets lost sometimes is that profiling can be sued to establish innocence, not guilt.

    Some people maybe think that if you get the guilty group down small enough you can just stop bothering trying to distinguish who is guilty and who is innocent.

    Donald Trump seems to think that once you’ve narrowed it down to 1 billion people, you can act.

Sammy Finkelman | December 9, 2015 at 1:45 pm

It wasn’t suspicious.

The money was borrowed from Prosper, and the reason Syed Rizwan Farook aparently supplied was the innocuous one of “debt consolidation.”

He probably had a good enough credit score to get it, and the odd amount of $28,500 looks like something an algorithm might have kicked out but this could also have been, that’s right, “a sweetheart terror financing deal,” and the amount could have been determined by the cash available for disbursement, rather than by a credit algorithm.

The money arrived in his bank account on Wednesday November 18, 2015, five days after the Paris attacks.

On November 20, or on that business day, two days after the deposit on November 18, Syed Rizwan Farook withdrew exactly $10,000 in cash.

Not $9,999.

Any combination of transactions in a short period adding up to over $10,000 might have been suspicious, but he did not evade the reporting requirements, making it LESS suspicious, and besides an povert withdrawal of $10,000 or more would not trigger a more timely alert by the bank.

Of course it’s a big question where all this money went. It couldn’t have been used to pay Enrique Marquez for the rifles, which he had already. Re-imburse him? Who in the investigation came up with that idea?

In addition to the $10,000 cash withdrawal, there were 3 approximately (?) – the leak has not been clear – $5,000 transactions in which he transferred the money to his mother, or an account listed in her name.

That could be suspicious – generally amounts over $4,000 begin to trigger interest.

There was also a car rental fee on November 30 (that car didn’t go anywhere.)

And then…

A $600 cash withdrawal (probably the maximum the ATM would give) the night before the massacre.

What did he need that money for? Who did he give it to? It wasn’t to bribe his way out of hell.

Sammy Finkelman | December 9, 2015 at 1:54 pm

And we learn, someone in teh FBI leaks, from Enrique Marquez, the childhood friend and former neighbor of yed Rizwan Farook in Riverside, California who bought the two rifles used in the attack, and married Rizwan’s sister, and checked himself into a ental hospital when he heard about the massacre but is now talking to police, that Syed Rizwan farook plotted to do something in 2012, together with someone whose name has not been leaked to the press, but was scared off by some terror arrests.

This brings up my point that the best anti-terrorist method is NOT to convince would-be terrorists that they can’t do what they can.

That merely slows them down. It postponed it here maybe by 3 and half years.

The best anti-terrorist method is to convince them that they can do what they can’t.

That way they get caught.

That way also crimes get solved, or prevented.

The answer here is easy, its called profiling and it is something humans do naturally every day. But for some reason has been changed to be something bad.

People profile without thinking. When I go out I have a certain type of woman that I am attracted to, how do I find that type? Simple I use visual profiling to find women who meet the criteria I have.

If you are getting on a plane and you see 2 young middle eastern men who look upset getting on the plane ahead of you with carry on luggage are you not gonna keep a closer eye on them, because I darned sure would. Heck maybe they are upset because a business deal went bad or maybe they want to die for Allah, I don’t know but they fit a profile. Now if I am seated next to them, being the person that I am I would probably engage them in conversation if for nothing else then to alleviate my concerns. I use this example because it actually happened to me. Turns out I had a great conversation with 2 brothers who were on their way home to see their sick and dying father and they had been delayed and rerouted by the airline. One of them even stuck his foot up and said “Look no fuses!” after which I needed the oxygen mask from laughing.

The point, is that we have to get back to being comfortable with profiling and realizing there is a difference between that and racism.

The 10k number is a lie. They actually watch all transactions down to 3k for the structuring effect.

Looking at those two pictures of the recent Islamist Butchers….How f***ing difficult for a thousand like them to drift over our border with Mexico as youthful Latino/Latina adults??

DDddduuuuuuuuuuuhhhhhhhhhhhhhhhh…..!

Font Resize
Contrast Mode
Send this to a friend