WASHINGTON -- Government experts advise bankers trying to detect money laundering to rely on their common sense.
Officials from the Federal Reserve Board, the State Department, the Justice Department, and the Federal Bureau of Investigation gathered this week to speak to bankers at a conference aimed at combatting money laundering. The meeting, held in Washington, was sponsored by the American Bankers Association and the American Bar Association.
Know Your Customer
To recognize suspicious transactions that move through their banks, bankers must know their customers better, the officials stressed.
Richard A. Small, special counsel for the Federal Reserve, said that if bankers know which transactions are routine for their customers, they will recognize the unusual ones that can signal criminal activity.
"If the customer strays from that normal activity, there is nothing wrong with asking the customer why," Mr. Small said. "Fifty percent of the time when you ask the customer why the transaction was abnormal, you will get a satisfactory answer. That is the way to protect yourself."
Whatever their scheme, con artists who try to launder money through banks share some attributes that bankers should watch for, said Gregory D. Meacham, supervisory special agent at the FBI.
"Your communications with these people are very seldom face to face," he said. "Whatever deal it is that he is proposing is typically more convoluted than it needs to be," he said. "Typically, they will never disclose the funding source."
Another warning sign, Mr. Meacham said, is a customer's always using Federal Express or another overnight delivery services, but never the U.S. mail.
Mr. Meacham's advice to bankers who see such activity is simple. "Make a (criminal) referral."
Playing It Safe
Shirah Neiman, deputy U.S. attorney for the Southern District of New York, agreed that bankers should play it safe, particularly when it comes to transactions involving cash.
When the bank customer structures cash transactions so that they will be just under the $10,000 level that would trigger the filing of a currency transaction report, the bank should report the activity to the government as suspicious- even if the bank believes the transaction is part of that customer's legal and normal business, Ms. Neiman said.
Banks bear part of the responsibility for detecting money laundering, said Rayburn F. Hesse, the State Department's senior policy adviser on international narcotics matters.'
"The bank has some obligation to get its head out of the sand," Mr. Hesse said.
Banks, especially the larger ones, "do not seem to know what kinds of money laundering schemes are prevalent around the world," he said. "Banks need to talk with each other."
The key though, is a common sense. Mr Hesse said bankers should ask themselves: "Is this deal logical?"