The story of how a Brooklyn ice cream shop was used as a front for an unlicensed and unregistered money-remittance operation will be told at the BSA Coalition's 2011 Anti-Money Laundering Conference. The conference is being held June 28 at the Federal Reserve Bank of Richmond, starting at 8:30 a.m.
White collar crime expert Dennis Lormel will discuss the importance to banks of knowing their customers and discuss the kinds of customers who can represent a threat to financial institutions. Also speaking at the event, which is open to the media, is James H. Freis Jr., director of the U.S. Treasury's Financial Crimes Enforcement Network – or FinCEN.
The BSA Coalition is a network of regulators and bankers in the Federal Reserve's Fifth District who discuss how to develop and implement programs related to the Bank Secrecy Act and other efforts to combat money laundering and terrorist financing schemes. The Richmond Fed plays an advisory role in the group.
Lormel will use the story of the Carnival Ice Cream shop to show how close monitoring of account activity and cooperation among financial institutions led to the realization that the shop was making increasingly larger deposits that suggested the business was doing something other than selling ice cream. In the span of seven years, the shop handled $22 million, or more than $3 million a year, which far exceeded the shop's annual income from legitimate operations of $185,000. The FBI determined that a known Al-Qaeda operative had used the shop to wire money to Yemen, and deposits were structured to avoid reporting requirements.
Freis will speak about FinCEN's role in combating financial crimes to safeguard national security and address the importance of partnerships to detect and possibly prevent money laundering and fraud. Freis also will touch upon proposed regulatory changes and other hot topics involving his agency.
Additional information about the BSA Coalition is available online at www.bsacoalition.org
The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.
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