Investigators use the detailed information in your SARs (suspicious activity reports) to find the trail left behind by fraudsters, cyber criminals and terrorists. Essentially, the information in the SAR filing becomes the taggant for financial crimes investigators. What does that mean to you?
A panelist at the Counter Terrorism and Financial Crimes Forum asked the audience if anyone knew what a taggant was. I admit that I didn’t know. So I Googled it.
A taggant is a substance or object that helps investigators identify the manufacturer or distributor of a product. For instance, a chemical in explosives can help with airport screenings and help investigators uncover the trail after a bomb has been detonated.
The panelist said that investigators should approach the SAR in the same way that law enforcement looks at the taggant – it is the vital link to the criminal. So, filing a SAR should be less about meeting compliance and filling out the required form and more about digging for all possible information associated with that suspicious transaction.
More than compliance
SAR filings help with investigations of broader criminal activities, like:
- Murder of innocent people by terrorists.
- Drug and weapons sales by organized crime rings.
- Human trafficking.
- Child and infant abuse and pornography.
Take a harder look
Because of the value the SAR details can provide, regulators are holding institutions more accountable for collecting key information about the transaction that triggered the SAR. That means the roles of investigator and compliance officer need to change. They have to be more like Sherlock Holmes – uncovering clues and providing as much detail as possible to fill in the missing pieces to a very important puzzle.
For instance, think about the possible source of funds during the onboarding process. Do the relationships seem right? Shell companies can make it difficult to find the source because they can be set up in low-risk jurisdictions. They funnel the funds through nested relationships with other institutions or Money Service Businesses (MSB) in a high-risk jurisdiction. That information may not show up on the wire. But it isn’t impossible to find.
The panelist said that wire transfers in round dollar amounts are still a great flag, but investigators need to drill deeper. Check out credit and lending paper sources. And look across lines of business where possible. Check social media sites.
You don’t need to know how the crime was committed; you just need to report the suspected “taggant.”
All this hard work in investigations will pay off. Again, what was eye-opening for me is just how important that single SAR might be to stopping organized murder and terrorists (or terrorism) across the globe.