Most crimes have some sort of financial component and analytics and data are emerging as Law Enforcement’s number one tool in helping to find and stop criminals. Data doesn’t lie, and is hard to fake. Among those using data and technology the most in an effort to combat crime while assisting Law Enforcement are financial institutions. Financial Institutions worldwide are required to maintain robust compliance and Anti Money Laundering programs to help identify and stop the flow of illicit funds moving through their books. The number one thing to assist banks and financial institutions in maintaining a robust program is software and other tools to help them detect and investigate the illicit transactions.
Those who dedicate their lives and careers to working in Anti Money Laundering compliance are able to see first hand how software that works well and is properly tuned helps achieve this task. A successful compliance program pairs great software with great people. Proper training for AML and Fraud investigators is crucial, but so is proper tuning with AML software and ensuring that you have the right alert types. In this article we are going to discuss how the right software that is properly tuned can not only help a financial institution meet their regulatory obligations but also help the greater good in either stopping crimes or helping Law Enforcement find those responsible for them.
As an AML professional during a terrorist attack or after hearing about a large scale fraud one's mind can automatically start churning and thinking about how this could have been stopped by following the money and through an alert based suspicious activity monitoring system such as Trustpoint - or maybe that is just my mind. Migmen Information Systems is a boutique software startup headquartered in Silver Spring Maryland, US. Trustpoint is their first software application; Trustpoint stores KYC Files, creates a Customer Risk Rating, Negative News, PEP and Sanctions Screening as well as serves as a Money Laundering and Fraud Activity and Case Management System.
Oftentimes home grown terrorists can be harder to find. They may not receive outside funding from terror groups such as Al Qaeda; and may opt to use their own funds to finance the terror attack they are planning. Taking a look at one such terror attack - Stephen Paddock killed 58 and injured more than 1,000 concert goes in Las Vegas, NV on October 1, 2017. Law Enforcements investigation found no known motive, despite Isis claiming that Paddock converted to Islam and joined their organization. The FBI was never able to substantiate this claim that Paddock was involved with Isis. Stephen wasn’t particularly religious and he wasn’t driven by a social or political agenda that could be identified. No known accomplices were found and after his reign of terror he committed suicide further leaving unanswered questions as to why.
The why in this case is perplexing, this was a wealthy retired man, who committed the second worst mass shooting in United States history. For purposes of this article we aren’t focusing on the why, more so how can future attacks such as this be stopped? While it may be impossible to stop all crime, from a regulatory and moral standpoint we have to try. This wasn’t your typical stereotype of what most Americans think of picturing a terrorist. He was a wealthy retiree with no manifesto, and the only reasoning that Law Enforcement found was that he wanted to end his life. While there is no known reason, Paddock’s Father did spend some time on the FBI’s Most Wanted list - he was a Bank Robber who escaped custody and was on the run.
In the year leading up to the attack Paddock acquired 47 firearms, 50 pounds of explosives and 1,600 rounds of ammunition. All of this was acquired legally, and purchased with Paddocks own funds. Reports state everything was purchased from gun shows or retail stores. Paddock was a wealthy man and needed no outside financial support to complete his mission. From Law Enforcement or a Banks perspective how do you identify characteristics to help in preventing this from happening again - both for the greater good and to reduce your risk exposure in the future with this type of atrocious attack. The answer lies in data. While it is reported that not all of the tools needed to carry out this attack were purchased legally, the majority of it was. Purchasing this amount of firearms and ammunition with cash would absolutely raise a red flag with gun and ammunition retailers; it is very likely that Paddock utilized his debit or credit card to make his purchases - and as such those transactions passed through a bank or credit union.
Paddock is reported to have spread out these purchases with multiple retailers through multiple states over a period of time. The United States has no way of tracking gun and ammunition purchases at the retail level; but with the transaction data you can easily track this if the individual is using the same account to make the purchases. While it may be impossible to stop every act of terror; Trustpoint has a rule built in to help combat this specific type of terror attack. With data and the right software we are able to set thresholds for high risk purchases such as this so if an individual is stockpiling weapons an alert will generate if the transaction amounts breach whatever threshold the bank sets for the rule. That alert would be reviewed by an investigator who is able to take the information known about Paddock - that he was a retired postal worker and real estate investor and determine there is no reasonable purpose for him to purchase that many firearms, that much ammunition and that many explosives in a relatively short period of time. Some banks have policies where they will reach out to customers to ask the reasoning for transactions in their accounts - taking that information and using it to determine if a suspicious transaction report is needed. Looking at this case study from an AML Investigators perspective there is no reasonable purpose for an individual with his background and current status to need that many guns, explosives or ammunition.
To think that something as simple as monitoring a bank or credit card account for excessive purchases at high risk retailers could help save lives of innocent people is a rather new train of thought that has only been made possible with technological advancements. So much of what we do every single day is driven by and produces data. From a financial institutions perspective if you can find a way to harness that data you are not only able to stay more in compliance with international laws and regulations surrounding Money Laundering and Regulatory Compliance - you have the power to help the greater good and help Law Enforcement save lives or help find those responsible for crimes.
Migmen Information Systems and Trustpoint utilize data and advanced analytics to provide solutions that help financial institutions reduce risk and stay in compliance with local and international Anti Money Laundering and Countering the Financing of Terror Regulations. Headquartered in Silver Spring, Maryland just outside of Washington, D.C. we are ready and able to assist worldwide with our solutions. For more information please visit https://migmeninfo.com/
By Tahnee Sentinella, CAMS, CFE; Director of Regulatory Compliance - Migmen Information Systems