Report outlines key tools law enforcement using to follow, prosecute money laundering

Telling money launderers to “beware” that the Treasury’s anti-money laundering (AML) division has many ways to thwart criminals trying to hide illicit cash, the congressional watchdog Tuesday published a digest of two recent reports from the law enforcement agency highlighting its crime-fighting efforts.

The Government Accountability Office (GAO) said the two recent reports from Treasury’s Financial Crimes Enforcement Network (FinCEN) that focus on geographic targeting orders (GTO) and the costs of the anti-money laundering Bank Secrecy Act (BSA) are examples of the “many ways of collection information on financial activities” by FinCEN, “making life harder for criminals.”

GAO said FinCEN’s real estate GTO (started in 2016), and which required title insurers to report information on shell companies used to buy homes in Manhattan or Miami costing $1 million or more (later expanded to a dozen areas around the country at lower property value thresholds), has given the crime fighters “greater intelligence on the potential misuse of shell companies to launder money through real estate.”

On the BSA front, the GAO said its report in September found that nearly three-quarters (72%) of federal law enforcement agencies surveyed used BSA reports from 2015-18 for identifying new subjects to investigate or expand ongoing investigations.

However, Tuesday’s report noted, the GAO has also found that complying with BSA “can be costly for banks.”

“We reviewed 11 banks varying in size and location and estimated that their costs for complying with the BSA ranged from about $14,000 to about $21 million in 2018,” the agency said, referring to a September report. “We also found that these costs generally tended to be proportionally greater for the smaller banks than for the larger ones.”

Fighting Money Laundering with the Bank Secrecy Act