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“Just Another Manic Monday”*

AML themes in major events like the Manafort indictment

The special prosecutor's indictment of Paul Manafort and Richard Gates made major news, but John Byrne says the filing also serves as a reminder of how many legal issues touch on anti-money-laundering laws. The special prosecutor's indictment of Paul Manafort and Richard Gates made major news, but John Byrne says the filing also serves as a reminder of how many legal issues touch on anti-money-laundering laws.

At first glance, yesterday’s announcement of indictments against the former staff of the Trump campaign may make folks return to their tribal political corners.

For those of us in AML—but hopefully everyone—that would be a mistake. This is a professional opportunity, a chance to refresh our understanding of the breadth of laws encompassing money laundering and the need for all of us to stay current with how statutes are used.

Key elements of the charges

It should be noted that as facts continue to come out, what we know may change. However, one essential part of the indictment revolves around deceit and avoidance of taxes.

Paul Manafort and Richard Gates, among other things, acted as “unregistered” agents of the Ukrainian government. They are charged with violating the Foreign Agents Registration Act (FARA) by not filing with the Department of Justice their clear lobbying work and filing false statement with Justice when asked about this after earlier press reports.

Related to the false filings mentioned above, both had oversight, signature authority, and financial interest in foreign bank accounts and failed to file the appropriate form (FBAR—Foreign Bank Account Report) or note that fact on their tax returns. Another part of the indictment covers the false statements regarding use of properties in order to get a higher loan amount for construction that was never done.

As far as the money laundering charges, we in the BSA/AML community have an opportunity to explain to those who do not have our backgrounds, why these individuals have been indicted. Now is the time to explain “specified unlawful activity” (SUA)—a term that certainly doesn’t roll off the tongue.

Many of our friends and neighbors still equate money laundering with drug proceeds and maybe terrorist financing. But most are unaware of the many federal crimes that permit a money laundering charge.

Here, the SUA was the FARA violations, but while we have their interest you should also mention the diversity of SUAs such as environmental crime, elder abuse, human trafficking, and many other financial crimes.

If more people realized that moving funds derived from crimes and (making them “illicit”) attempting to disguise the source is an additional crime, they could focus on the various press accounts of cases without confusion.

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Finally, there have been some controversial cases on asset forfeiture recently. But the references in this indictment to how that would work also bear mentioning. The charges listed, if proven, will result in the forfeiture of a number of properties as well as an insurance policy.

It would be hard for anyone of any political stripe to think that taking the property or substitute assets from convicted individuals that hid their work on behalf of foreign governments was anything less than appropriate—right?

A teachable moment (or two)

Thus far, we have only witnessed immediate reaction to what will be an ongoing and potentially lengthy investigation.

Don’t accept Twitter, Facebook, or talking heads as your sole source of information on this indictment.

My first Twitter response was to send the whole document and I urge all of you to read the document in its entirety. I will continue to follow this as an AML training and awareness tool.

For now, the first public display of Special Counsel Robert Mueller’s investigation tells me that the following issues are in play:

• Following long-standing filing requirements

• Tax evasion

• Abuse of offshore banking

• SUAs and money laundering

• Asset forfeiture

• Mortgage fraud

• False statement

• Political corruption

As with everything else this year, more to come…

Other upcoming issues

I want to mention that there a few more AML-related activities coming up in the next month that I will relay in future postings.

• Members of the financial sector continue to work with counterparts in other sectors on human trafficking and inclusion and we are hoping for more strategies to share with the AML community.

• Finally, later this month Congress may begin a formal review of 30-plus years of AML.

Have I piqued your interest?

* “Manic Monday,” a 1986 hit by the Bangles which reached #2 on the Billboard list and was actually written by Prince.

John Byrne

John Byrne is President of Condor Consulting LLC and Senior Advisor to the Advisory Board  of the Association of Certified Anti-Money Laundering Specialists. ACAMS, with more than 55,000 members, develops anti-money laundering/sanctions/financial crime detection programs and certifies specialists in financial and non-financial businesses and government agencies. Byrne is a nationally known regulatory and legislative attorney with close to 30 years of experience in a vast array of financial services issues, with particular expertise in all aspects of regulatory oversight, policy and management, anti-money laundering (AML), privacy, and consumer compliance. He has written hundreds of articles on AML; represented the banking industry in this area before Congress, state legislatures, and international bodies such as the Financial Action Task Force (FATF); and appeared on CNN, Good Morning America, the Today Show, and many other media outlets. Byrne has received a number of awards, including the Director's Medal for Exceptional Service from the Treasury Department's Financial Crimes Enforcement Network (FinCEN) and the ABA's Distinguished Service Award for his career work in the compliance field. His podcast, “AML Now” (on ITunes) received a 2017 Communicator Award for hosting from the Academy of Interactive and Visual Arts. Byrne’s blog on AML and Fraud on BankingExchange.com received a Gold Hermes Award in 2016. John received the ACAMS Lifetime Service Award in September. Byrne can be e-mailed at john.byrne90@yahoo.com and don't miss John's updates on Twitter! You can find him at @jbacams2011

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