MIAMI -- The way Ron Noble sees it, stopping the flow of drug money is like filling rat holes.
"If you don't plug up all the rat holes, there's a way for the money launderers to get through," said the assistant secretary for enforcement at the Treasury Department.
In an effort to stem the flow of dirty money into the nation's financial system, Treasury formed a new alliance last week between the Office of Financial Enforcement and the Financial Crimes Enforcement Network, or Fincen.
Mr. Noble announced the partnership at the International Money Laundering Conference sponsored by Alert Publications Partners. He also named Stan Morris, his former chief of staff, as the new director of Fincen. Mr. Morris will also oversee the Office of Financial Enforcement.
Before he became Mr. Noble's chief of staff in 1992, Mr. Morris was deputy director to drug czar William Bennett. He was also director of the U.S. Marshals Service at the Justice Department from 1983 to 1989.
Mr. Morris replaces Julius McGruder, who had been acting director for the network since October, when Brian Bruh left the position.
"He will be my right arm in designing and implementing a comprehensive financial enforcement and anti-money laundering strategy for the Department of the Treasury," Mr. Noble said.
Goal: Lessen Reporting Burden
The partnership is designed to strengthen both groups' mission against financial crime, said Mr. Noble. He also said a primary goal is to lessen bankers' reporting burden.
The Office of Financial Enforcement is a regulatory oversight arm of Treasury, and Fincen is the intelligence gathering network founded in 1990.
The network will also be responsible for collecting all currency transaction reports bankers must fill out on transactions of $10,000 or more.
But while the agency will be tougher on criminals, he also said it will lighten up on reporting requirements, Mr. Morris said. "You will see major changes in the reporting system," he said. Mr. Noble said transaction reports may be simplified as much as 40%.
Because Treasury now expects bankers to help fight financial crime through "know your customer" programs, it's only fair to reduce their paperwork burden, said Mr. Morris. "If we want financial institutions to help us think, we've got to take away the nonthinking reporting," he said.
Mr. Noble said the alliance will be responsible for other aspects of the fight against money laundering, at the recommendation of the Bank Secrecy Act Advisory Board, a group of 30 public and private experts founded in April.
Something to expect soon, he said, is guidelines for bankers on suspicious transaction reporting. "I recognize banks are confused when and where to file suspicious transaction reports," Mr. Noble said. "It was equally clear that the exemption process was broken."
Exempt Customers
Banks are permitted to exempt some customers that regularly deposit large amounts of cash. Exempt customers need not fill out transaction reports for each deposit.
Mr. Noble said many bankers do not use the currency transaction exemption process because they aren't sure when to use it. He said a safe harbor will be granted to those who do, and a list of exempt businesses will soon be published in the Federal Register.
Mr. Morris said the alliance does not mean massive new resources for the department, although the skills of approximately 15 people in the Office of Financial Enforcement and 200 Fincen employees will be joined.
Mr. Noble also said that Fincen will begin training all law enforcement officials on the Bank Secrecy Act data base this month. Use of that data base has so far been limited to a year-old pilot program, Project Gateway.
Through Project Gateway, Texas law enforcement had computer access to all currency transaction reports filed by banks. During the program, half the 5,700 queries to the data base resulted in positive hits for Texas law enforcement.
"I am convinced that expanded use of this material, which has been collected for nearly 20 years, will significantly enhance the investigative tools available to law enforcement nationwide," Mr. Noble said.
