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Detective Sergeant John Poole, FIUDetective Garda Jimmy Cronolly, FIU
www.fiu-ireland.ie
Role of FIU
Money Laundering Trends/Typologies
Terrorist Financing
Electronic Submission of STRs - GOAML
FINANCIAL INTELLIGENCE UNIT (FIU) – Part of the Garda NationalEconomic Crime Bureau (GNECB) - Police-based FIU - 11 GardaOfficers & 7 administrative support staff
Assisted by two in-house Money Laundering Investigation Teams(MLIU) – cross-jurisdictional/complex ML cases
PRIMARY ROLE/FUNCTION OF FIU: Receive, assess, & disseminateSuspicious Transaction Reports (STRs) from “designated persons”for investigation - MLIU Teams, CAB or Garda Divisions –specially trained members . . .
Also receive reports (Section 63 of 2010 Act) of suspected ML/TFfrom “Competent Authorities”, e.g. Central Bank, AccountancyBodies, AMLCU, Law Society, etc.
Dual reporting of STRs - Approximately 90% of STRs– potentiallyof interest to the Office of the Revenue CommissionersRegular meetings with Rev. Commissioners to discuss STRs
FIU Database: All new data matched against existing data/fin. intelligence for any ‘hits’
Can the FIU link the person(s) and source of funds with a “predicate offence”?? Cross-jurisdictional nature of ML/TF –International enqs. through secure channels . . .
Some STRs lead to full investigations – Funds may be ‘frozen’, persons arrested and prosecuted for ML offences and/or associated “predicate offences”
Good quality STRs are vital in the fight against ML/TF
2002 4398
2003 4254
2004 5491
2005 10,735
2006 10,402
2007 11,145
2008 14,505
2009 14,400
2010 13,416
2011 11,168
2012 12,390
2013 15,242
2014 18,302
2015 21,685
2016 23,308
An Garda Síochána - Financial Intelligence Unit
Money Laundering Trends/Typologies
ARE MAJOR CRIMINALS & MONEY LAUNDERING SYNDICATES GOING TO RISK USING THE FINANCIAL SYSTEM??
An Garda Síochána - Financial Intelligence Unit
TRADITIONAL PROFIT-GENERATING CRIMES: Drug trafficking, financial crime, brothel-
keeping/prostitution, cross-border smuggling, tax evasion, etc.
. . . TRADITIONALLY CASH-BASED FUNDS – may or may not be laundered through the financial system
FINANCIAL CRIME:STRs are reflecting an increase in the potential
laundering of the proceeds of financial crime more so than any other ‘predicate offence’
Financial crime includes white-collar crimes, cheque fraud, internet frauds (phishing, CNP fraud, ATM fraud, etc.), advance fee frauds, inheritance frauds, etc. . . .
More recently: invoice re-direction fraud/CEO fraud
An Garda Síochána -Financial Intelligence Unit
HOW ARE THE PROCEEDS OF FINANCIAL CRIME LAUNDERED?
> Proceeds of domestic investments scams (‘Ponzi/Pyramid’ scams) being laundered through the financial system (personal/business accounts) and often transferred to other accounts/multiple jurisdictions
> Proceeds of complex frauds (‘boiler-room frauds’, ‘Advance Fee Frauds/419 scams’ & Inheritance Frauds) committed outside jurisdiction being channelled through Irish financial system – how??
Bank accounts opened in the name of an Irish-registered entity – directors may be non-nationals using TCSPs – funds being transferred into accounts and moved out of the country again very quickly
Proceeds of VAT carousel/MTIC frauds being channelled through Irish bank accounts – same day transfers into business a/cs. – portion of funds remaining represents profits
Accounts opened in false names using false documentation – funds remain in account for a very short period of time and are then transferred to avoid same being ‘frozen’/confiscated if transactions look suspicious e.g. deposits re purchase of plant & machinery, etc.
Identity Theft /Use of “assumed identities” – Good quality false documentation being used . . . .
Use of “money mules” - allowing personal accounts to be used for channelling proceeds of financial crime (proceeds of phishing, etc) – unusual international credit transfers vis-à-vis profile of customer. He/she may then withdraw cash to make onward transfer via payment institutions . . . Breaks the ‘audit trail’
Investment structures (Funds, Trusts, Stocks/Shares) are potentially attractive mechanisms for money laundering – variety & complexity of instruments available (nominee structures/numbered a/cs.) – bribery, foreign bribery or corruption, etc. . . .
Use of corporate structures: LBSs & entities used as a‘front’
Purchase of high-value goods (SUVs, boats, jewellery,gold, etc.) & properties (home/abroad)
In addition to using the financial system, criminals/money launderers may use solicitors, accountants & other professionals to assist in laundering funds (‘gate keepers’) - important to protect your reputation
“Self-launderers” V “Third-party money launderers”
International OCGs may use “money laundering Syndicates”
An Garda Síochána -Financial Intelligence Unit
Globally, CASH remains a significant problem in the fight against ML/TF
USE OF MULTIPLE LARGER NOTES (€500 NOTES/“BIN LADEN NOTE”) . . . The €500 note may be the “note of choice” for criminals - €1m in €20 notes weighs 50kgs V €1m in €500 notes weighs 2kgs . . .
By 2018, no longer produced
VIRTUAL/CRYPTO CURRENCIES – A PASSING FAD??CHALLENGE??: “virtual currencies are the wave of the
future for payment systems” V “virtual currencies provide a powerful new tool for criminals & terrorist financiers”??
USE V MISUSE??There is no evidence that there is a current crystallised
risk for ML/TF purposes but the threat could greatly increase in the future with the expansion of ATM & merchant networks
N.B. National Risk Assessment (NRA): published Oct. 2016
An Garda Síochána -Financial Intelligence Unit
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STR Receipts
Trends/Typologies
Alerts
Section 56 Requests
1. Register
2. Complete STR
3. Attach documents
4. Preview & print copy for Revenue
5. Submit STR
6. Receive acknowledgement from FIU
