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20200927 The FinCEN Files - misleading the public and benefiting from criminal conduct

Nigel Morris-Cotterill

There is, at present, a state of excitement amongst the media, some financial crime consultants and some politicians in response to what they are being told is public opinion.

The so-called FinCEN Files were heavily telegraphed in a media blitz more akin to the launch of a Hollywood film that has cost a fortune but the result isn't as good as was hoped.

In the USA and the UK, mainstream media outlets have published a series of articles that, they say, arise because of what it has found in documents obtained illegally from the USA's Financial Intelligence Unit, FinCEN.

No one seems to notice that all those who are profiting from the articles are gaining a benefit from criminal conduct.

That's just one reason why I would not have worked on the FinCEN papers, had I been asked (I wasn't and I'm glad).

If banks, etc. were not complying with the law, there would be no SARs for the journalists to work on

The only reason that there are SARs is because banks, lawyers, car dealers and many more are filling in increasingly complex forms and submitting them.

Where banks have been criticised by regulators and prosecutors, they tend to do something called "remediation."

Remediation is where a team is dedicated to review files, often many files, to see if any suspicious activities have been missed. Inevitably fresh eyes - with the added benefit of freedom from the commercial pressures that would have existed at the time of the transaction - find reports that they consider should have been filed. Often many new SARs are filed.

This should not, in most cases, be considered a failing. But what it does, and which the journalists seem to have missed, is that this results in a concentration of reports and a concentration of amounts to which the reports relate. So, because the illegally extracted data refers to a period in which several banks were undertaking large scale remediation simultaneously, it is an unrepresentative sample. They present large numbers, presumably hoping for a public reaction, without explanation.

I could go on and maybe I will add to this article in due course. But I think I've made my case.

Who cares?

Less than a week into the publication of articles, there is widespread apathy in the public at large. Bank bashing has been so common - with the USA, in particular, bashing the same banks as feature in the articles that there is no longer much interest amongst the general population except those who are happy to jump on any anti-capitalist, anti-bank, anti-wealth bandwagon. There are politicians who are raising questions for whatever reasons they have. There is continued excitement as some (by no means all) journalists think there's a feeding frenzy they can't afford to miss out on. And there are dozens of consultants and others in business using the sensational to promote their own product and services.

There are also a growing number of journalists who are critical of the material and the way that it was obtained. And consultants - which of course includes me - who are trying to redress the balance and hope that, if Joe Public does read the articles, he also reads articles, like this, that explain that which the articles do not.

At the end of the day, the only people who really care are those who are driving an agenda - and trying to justify their own actions that have arisen from illegal conduct.

And they don't see the irony in that.

Just as they don't see the irony in the fact that they are obtaining a benefit from criminal conduct.

Why is that ironic? It's because it's money laundering.

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