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1

LAW ENFORCEMENT
INVESTIGATIONS
Define a search warrant and
describe how it is issued.

A search warrant is a grant of permission from a court for
a law enforcement agency to search certain designated
premises and to seize specific categories of items or
documents. Generally, the requesting agency is required
to establish that probable cause exists to believe that
evidence of a crime will be located. The warrant is
authorized based on information contained in an affidavit
submitted by a law enforcement officer.

2

DECISION TO PROSECUTE
Identify the factors a prosecutor many
consider when determining whether
or not to bring a case against an
institution involving money
laundering-related charges.

• The institution has a criminal history,
• The institution has cooperated with the investigation,
• The institution discovered and self-reported the
money laundering-related issues,
• The institution has had a comprehensive and effective
AML program,
• The institution has taken timely and effective remedial
action,
• There are civil remedies available that can serve as
punishment, or
• Deterring wrongdoing by others is needed and will be
served by a prosecution.

3

SUMMONSES AND SUBPOENAS
ABC Bank was served with a subpoena
compelling the production of certain
documents on a personal checking
account. Describe the steps the bank
should consider taking upon receipt of
the subpoena.

If an institution is served with a summons or subpoena
compelling the production of certain documents, the
institution should have its senior management and/or
counsel review the summons or subpoena. If there are
no grounds for contesting the summons or subpoena,
the institution should take all appropriate measures to
comply with the summons or subpoena on a timely and
complete basis.
Failure to do so can result in adverse action and penalties
for the institution. Also, the financial institution should
not notify the customer who is being investigated. If
the government asks the bank to keep certain accounts
open, such a request should be obtained in writing under
proper letterhead and authority from the government.

4

SEARCH WARRANTS
ABC Bank was served with a
search warrant. What next steps
should the Bank consider?

1. Call the financial institution’s in-house or outside
counsel,
2. Review the war cant to understand its scope,
3. Ask for and obtain a copy of the warrant,
4. Ask for a copy of the affidavit that supports the search
warrant (the agents are not obligated to provide a
copy of the affidavit, but, if a financial institution is
allowed to see the affidavit, the financial institution can
learn more about the purpose of the investigation),
5. Remain present while the agents record an inventory
of all items they seize and remove from the premises.
Keep track of the records taken by the agents,
6. Ask for a copy of law enforcement’s inventory of what
they have seized, and
7. Write down the names and agency affiliations
of the agents who conduct the search.

5

MONITORING THE INSTITUTION’S
RESPONSE TO A LAW
ENFORCEMENT INVESTIGATION
How should a financial institution
monitor the receipt of a subpoena,
summons, or other government
request?

When an institution receives a subpoena, summons
or other government request, the institution should
do more than just produce the records or information
being sought. Financial institutions should ensure that
all grand jury subpoenas, as well as other information
requests from government agencies, are reviewed by
senior management, an investigations group or counsel
to determine how best to respond to the inquiry and to
determine if the inquiry or the underlying activity might
pose a risk to the institution.
In addition, the institution should maintain a centralized
control over all requests and responses in order to ensure
that the requests are responded to on a complete and
timely basis and to establish a complete record of what
is provided. This centralized record will also assist with
regard to the institution’s own internal investigation.

6

NOTICE TO EMPLOYEES
If a bank is under investigation by a
government agency for possible money
laundering, what steps should the Bank
have for its employees follow?

With regard to investigations conducted by the
government, employees should be informed of the
investigation and should be instructed not to produce
corporate documents directly, but, rather, should inform
senior management or counsel of all requests for
documentation and should provide the documents to
them for production.
In that way, the institution will know what is being
requested and what has been produced. In addition, the
institution can determine what, if any, requests should be
contested. The same procedure should be followed with
regard to requests for
employee interviews.

7

INTERNAL INVESTIGATIONS
Identify several situations that may
require a financial institution to initiate
an internal investigation?

• A report of examination from the regulators,
• Information from third parties, such as customers,
• Information derived from surveillance or
monitoring systems,
• Information from employees or a company hotline,
• Receipt of a governmental subpoena or
search warrant,
• Learning that overnment investigators are asking
questions of institution employees, business
associates, customers or even ompetitors, and
• The filing of a civil lawsuit against the institution or
a customer of the institution.

8

INTERNAL INVESTIGATIONS
What is the purpose of conducting
an internal investigation?

The purpose of the investigation will be to learn the
nature and extent of any potential wrongdoing, to
develop information sufficient to report – when necessary
– to the authorities, to enable the institution to minimize
its liability, and to stop any potential money laundering.

9

CLOSING THE ACCOUNT
The checking account for XYZ Trading
LTD, a company registered in the
British Virgin Islands, was identified
on a government subpoena issued
to International Bank. The Bank has
initiated an internal investigation on
the account and its beneficial owners.
What factors should the Bank consider
on whether to close the account?

Based on its internal investigation, the institution should
make an independent determination as to hether to
close the account in issue. Some of the factors that the
institution should consider are as follows:
• The legal basis for closing an account,
• The institution’s stated policies and procedures for
closing an account,
• How serious is the underlying conduct. If the conduct
is serious and rises to the level where the account
would ordinarily be closed, then the institution should
consider closing the account, or
• As stated above, if law enforcement requests the
institution to keep the account open, the institution
should request that the investigator or prosecutor
make that request in writing on roper government
agency letterhead with the appropriate
authorized signature.

10

FILING AN STR
If an institution decides to file an
STR, what should they do as soon
as possible?

Notify the investigators or prosecutors.

11

THE IMPORTANCE OF GATHERING
AND PRODUCING DOCUMENTS
What type of documents would a
financial institution have that could
assist a financial investigator in tracking
money movements?

A financial investigator’s main objective is to track the
movement of money, whether through a bank, brokerdealer,
money services business or casino. For example,
banks maintain signature cards, which are collected at
the opening of an account, account statements, deposit
tickets, checks and withdrawal items and credit and debit
memorandums.
Banks also keep records on loans, cashier’s checks,
certified checks, traveler’s checks and money orders.
They exchange currency, cash third-party checks, and
conduct wire transfers, as do most money services
businesses. Banks also keep safe-deposit boxes and issue
credit cards.

12

INTERVIEWING EMPLOYEES
Why is it important to interview
knowledgeable employees as soon
as practical?

When performing an internal investigation, it is important
to secure and review all relevant documentation and to
interview all knowledgeable employees. It is important
to interview these employees as soon as practicable so
that their memories are the freshest and so that they can
direct management or counsel to relevant documents and
people on a timely basis.

13

DISSEMINATION OF A WRITTEN
REPORT BY COUNSEL
What steps should the institution
take to ensure a written report on
the internal investigation retains the
attorney-client privilege?

If counsel for the institution prepares a written report
of an investigation, the institution should take steps to
not inadvertently waive the attorney-client privilege by
distributing the report to persons who should not receive
it. Every page of the report should contain a statement
that it is confidential and is subject to the attorney-client
privilege and work-product privilege.
Copies of the report should be numbered, and a list
of persons who are given copies to read should be
maintained. After a set period of time, all copies should
be returned. Persons obtaining the report should be
instructed not to make notes on their copies. All copies
should be maintained in a file separate from regular
institution files in a further effort to maintain the highest
level of protection.

14

MUTUAL LEGAL
ASSISTANCE TREATIES
What are the steps commonly taken to
obtain mutual legal assistance?

1. The central authority of the requesting country sends a
“commission rogatoire” (letter rogatory, or letter of request)
to the central authority of the other country. The letter
includes the information sought, the nature of the request,
the criminal charges in the requesting country and the legal
provision under which the request is made,
2. The central authority that receives the request sends it to
a local financial investigator to find out if the information is
available,
3. An investigator from the requesting country then visits the
country where the information is sought, and accompanies
the local investigator during visits or when statements are
taken,
4. The investigator asks the central authority for permission to
remove the evidence to the requesting country,
5. The central authority sends the evidence to the requesting
central authority, thereby satisfying the request for mutual
legal assistance, and 6. Local witnesses may need to attend
court hearings in the requesting country.

15

AML COOPERATION
BETWEEN COUNTRIES
Identify the three gateways that
assist with the AML cooperation
between countries.

• Mutual Legal Assistance Treaties,
• Financial Intelligence Units, and
• The Supervisory Channel.

16

FATF RECOMMENDATIONS
ON COOPERATION BETWEEN
COUNTRIES
Recommendations 36-40 from
FATF’s 40 Recommendations pertain
specifically to the international aspects
of money laundering and terrorist
financing investigations. What are
Recommendations 36-40?

Recommendations 36-40 deal with mutual legal
assistance treaties, extradition, confiscation of assets and
mechanisms to exchange information internationally.