by Michele Newbern Gillis
Staff Writer
Two members of the U.S. government offered a warning for people working in the financial industry at the Mortgage Bankers Association of Jacksonville meeting Wednesday at the Jacksonville Marriott.
Know who you are dealing with when it comes to financial transactions, they advised.
“You wouldn’t generally think that financial institutions would be involved in money laundering activities, but you can be a facilitator to money laundering,” said A. William Mackie, an assistant United States attorney. “There are some things financial institutions need to look out for, including transactions involving what we call block parties or people who are designated by the government as being a threat to either national security or other aspects of terrorism.”
The Office of Foreign Assets Control (OFAC) has a website — www.ustreas.gov/ofac/ that includes an alphabetical list of specially designated nationals (SDN) and blocked persons.
Any business involved in financial transactions needs to be aware of the list and make sure the people they are doing business with are not on the list.
“Each one of you are potentially liable for a violation of OFAC regulations whether you know it or not,” said Mackie. “There is a need to develop a comprehensive compliance program from your institutions that is in tune with OFAC.”
Mackie said the list was updated after the Sept. 11 terrorist attacks, adding a number of individuals and organizations. He said being on the list is grounds for stopping or denying a financial transaction. Failure to check the list and report the individual or organization could lead to civil or criminal charges.
“The system works only if you are watching what’s happening,” said Mackie. “If you are not, then we start looking at the institution to see if it had some role in it. You have to be aware of your customers. If you loan money to a person on the blocked list, those funds can be frozen and you won’t get them back.”
William Hurlburt, a special agent with the Federal Bureau of Investigation, told the group that being alert to money laundering, which is used to hide the true point of origin or to make dirty money appear legitimate, is a responsibility of people involved in financial transactions, including car dealers, loan officers and real estate agents. He said one way to do that was to fill out suspicious activity reports and turn them in to the FBI.
“It helps us to identify individuals moving large amounts of cash,” said Hurlburt. “Also it helps us identify known bank accounts that the money is moving through. According to the Financial Crime Enforcement Network most recent statistics, there is $750 billion laundered annually and $300 billion is laundered in the United States alone. That is more than the combined gross sales of General Motors and Ford. Sixty to 70 percent of money laundering activity comes from narcotics trafficking and proceeds.”
Money laundering includes taking large amounts of cash and exchanging it for a cashier’s check, concealing money through wire transfers to or from offshore banks and purchasing real estate or cars with cash and then selling them.
“Years ago, I had a case where someone put a piece of commercial property on the market for sale,” said Hurlburt. “Through the network of lawyers, settlement agents and mortgage brokers, a drug dealer would find these properties and offer to buy it for their listed or market value, but pay almost half of the money under the table in cash to the seller. The seller could do whatever they wanted to with the money. Then he would put the property back on the market for full price and it appeared to be legitimate. He did nine pieces of property that way. At the end of that case, I think we prosecuted 45 people from the real estate side of the industry.”