Financial Aspects of Criminal Investigations (Exam 2) Flashcards
Identify the Forms required to be filed to Track the movement of currency and monetary instruments as prescribed by the Bank Secrecy Act (BSA), Comprehensive Crime Control Act of 1984, and the USA PATRIOT Act.
BSA is a reporting and Record keeping Statute
Creates a paper trail for cash transactions
Law requires that movements of currency in amounts exceeding $10,000 are to be reported to the Govt.
FORMS:
Currency Transaction Report (CTR)
*Banks and Financial Institutions are required by to file a CTR when they are involved in a transaction with a customer involving more than $10,000.
*Financial Institution must file CTR with IRS Enterprise Computing Center within 15 days of the date of the transaction.
Identify Three Basic Methods that can be used by the Financial Investigator to establish a Person’s Financial Profile and Explain the Source and Application Method
Net Worth Method of Proof
*Bad guy is spending freely
Bank Deposits Method of Proof
- Trying to launder money through banking system
- Need to account for ALL of the accounts (can be hard to find)
Source and Applications
*Total Applications of Funds subtract known sources of funds equals funds from unknown sources
Trying to show money coming in and money going out
Source-
- INCOME derived from salary, inheritances, rental income etc
- Has ownership, control, or discretion over how funds can be used
Application-
- How the funds are spent (personal living expenses, rent, mortgage, vacations etc)
- Monthly payment, down payment, make loan to family/friend
Beginning Balance vs Ending Balance
Cash on Hand vs Cash on Hand
Bank Account vs Bank Account
Show as Source vs Show as Application
Distracter…..Doesn’t become an application until payment is made (credit card purchase)
Key Provisions of the BSA
Bank is required to know their customer
Banks must maintain an internal log of anyone who conducts a currency transaction between $3,000 and $10,000
All checks over $100. Film or Scan
Identify the Forms required to be filed to Track the movement of currency and monetary instruments as prescribed by the Bank Secrecy Act (BSA), Comprehensive Crime Control Act of 1984, and the USA PATRIOT Act.
Forms:
Currency Transaction Report (CTR)
Currency Transaction Report by Casinos
Report of International Transportation of Currency of Monetary Instruments
Report of Foreign Bank and Financial Accounts
Report of Cash Payments over $10,000 Received in a Trade or Business
Currency Transaction Report (CTR)
Who: Filed by Financial Institution
When: Transaction greater than $10,000
Circumstances: Deposit, withdrawal, exchange or purchase
Greater than $10,000, Financial Institution (Banks, Western Union)
Currency Transaction Report by Casinos (CTRC)
Who Files: Casinos with gross annual revenues excess of 1 million
When Filed:exceeding $10,000 by same customer on same day.
Circumstances: Cash in or cash out. Chips, tokens, foreign currency, house accounts, wires.
Casinos are required to know ID of customers who known by more than one name.
Greater than $10,000 and Casino
Report of International Transportation of Currency of Monetary Instruments (CMIR)
Who Files: Traveler, to CBP
When Filed: Anytime crossing a U.S. Border
Circumstances: With more than $10,000 in cash or monetary instruments (US Foreign coin and currency, traveler’s checks, checks, stock and securities
Greater than $10,000 Across U.S. Border
Report of Foreign Bank and Financial Accounts (FBAR)
Who Files: U.S. Person
When Filed: Financial Interest in or Signature Authority over any financial accounts in a foreign country. Do online by 6/30
Circumstances: Aggregate valve of the accounts exceeds $10,000 at any time during the calendar year
Greater than $10,000, Foreign Bank Account
Report of Cash Payments over $10,000 Received in a Trade or Business (IRS/FinCEN Form 8300)
Who Files: Trade or Business
When Filed:
Circumstances: Receive more than $10,000 in cash in one transaction or in a series of related transactions over 12-month period
Greater than $10,000 Trade/Business (Attorney, Dealerships are examples)
Suspicious Activity Reports (SARS)
Completed anytime a transaction is completed that is suspicious
***Treat a SAR like a CI, no LEO or employee who has knowledge that a SAR was prepared or filed may disclose to any person involved in the suspicious transaction that the transaction has been reported.
Suspicious Transactions
Explain the Use of Title 18 USC 1956 and Title 18 USC 1957 as codified in the Money Laundering Control Act
In 1986 the Money Laundering Control Act was passed giving Federal law Enforcement some powerful tools to combat crime by attacking the uses of the proceeds of criminal activities.
3 stages
Placement:Into of money into system
Layering: series of transactions that conceals the owner of the money
Integration: receiving the money back with appearance of legitimacy
Financial Transaction: Any way or degree that affects interstate or foreign commerce
Statute of Limitations: 5 years from the date of the final transaction
Title 18 USC 1956
- Proceeds from specified unlawful act (SUA)
- Knowledge of money from illegal act
- Financial Transactions (No money limit) has to affect interstate commerce
- MUST PROVE-Purpose/Intent:
a. Promote SUA (Shown by direct evidence of overt acts and inferred by the jury from a showing of the subjects acts)
b. Conceal the nature, source, location, Ownership, control of proceeds (moving the money around in order to hide larger scheme)
c. Avoid Reporting Requirement (Causing Financial Institution to fail to file an 8300 or CMIR FBAR
d. Evade tax
Title 18 USC 1957
SPENDING STATUTE
- Proceeds from Specified Unlawful Activity (SUA)
- Knowledge of money from illegal act
- Monetary Transactions (value GREATER than $10,000 through a financial institution)
- NO intent to promote or knowledge of a design to conceal is required.
Financial Institution is defined as trade/business that works through a bank, broker, etc… a place where a person is able to do ONE transaction greater than $10,000
