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I haven't looked into the individual cases this is about and I'm certain that some crossed a line, but with regards to the following: > The leaked documents, k

I haven't looked into the individual cases this is about and I'm certain that some crossed a line, but with regards to the following: > The leaked documents, known as the FinCEN Files, include more than 2,100 suspicious activity reports filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network. First, the banks actively filed these reports, so it's not like they were trying to hide these transactions. The ones they really wanted to hide, you won't find in these reports. Second, the bar for "suspicious activity" is usually set quite low -- it's usually literally just activity that doesn't seem 100% kosher. You don't know of any wrong-doing (because if you did, you'd be an accomplice), but something just does not smell quite right. Banks report these because they are required to. If they don't and they get caught in an audit, there are hefty fines. Edit: Note that these reports are filed immediately when the activity occurs and regulators can jump onto the activity straight away. So while one can accuse many banks of committing many sins, a suspicious activity report is not something that I would normally consider sinister.

jandrese 6y ago
One can also hide things by sending an overwhelming amount of noise to drown out the signal.
- ckastner 6y ago
  Regulators aren’t completely inept and will catch on to this. Edit: to elaborate, too many false positives will be interpreted as a broken AML policy and that alone is already grounds for penalty.
- valuearb 6y ago
  They are required by law to file SARs. If the huge volume of SARs are overwhelming the regulators, perhaps the regulators should not have set the requirements so ridiculously broad for filing them.
  - Nasrudith 6y ago
    It sounds like inflation and legislature's stubborn refusal to index value thresholds to inflation or cost of living for whatever reason (innumeracy, a desire to sneak in laws becoming stricter over time, wanting to set up future opportunities for horse-trading) is partially to blame. $25,000 isn't trivial but it is less than it used to be.
    - valuearb 6y ago
      It’s not inflation, the level never made sense when it started. Maybe $1M, but even the basis of this reporting makes little sense. Go deposit $9,000 in cash at your bank. Later in the same day deposit $1,000. You just committed a federal crime called structuring.
      - heavenlyblue 6y ago
        The idiocy of this crime is that technically it’s not that hard to make an SQL query to easily detect when someone deposits 10K over a single day so that shouldn’t be even an issue for law enforcement in the first place
raverbashing 6y ago
Agreed. I feel that at some point, this "crying wolf" over any transaction causes more issues than prevent them (see the recent issue about paypal not sending payments with an animal name in the transaction) People react to these news with outrage then are surprised to know why their bank account gets locked up or some seemingly innocuous transaction causes suspicious. Meanwhile, those who want to move large quantities of money illicitly will continue to be able to do so with ease.
djhworld 6y ago
> First, the banks actively filed these reports, so it's not like they were trying to hide these transactions. The ones they really wanted to hide, you won't find in these reports. The takeaway I got from the article was the banks filed the reports, but the government organisation designed investigate and take action is underfunded and staffed so reports probably never get read or actioned upon. So the banks continue doing custom with those they suspect are doing bad things.
- valuearb 6y ago
  It’s not illegal to do business with people you ”suspect” of doing “bad” things. It would be the most Orwellian thought crime if it was. Banks have to file a SAR for any group of transactions over $25,000, do you expect them to stop doing business with anyone who accumulates transfers over $25,000?
  - panarky 6y ago
    > Banks have to file a SAR for any group of transactions over $25,000 This is manifestly false. The $25k number is only for suspected violations of federal law in that amount or larger, not every time I buy a car or transfer $25k to my brokerage account. Source: https://www.fincen.gov/sites/default/files/shared/FinCEN%20SAR%20ElectronicFilingInstructions-%20Stand%20Alone%20doc.pdf https://www.fincen.gov/sites/default/files/shared/FinCEN%20S...
    - valuearb 6y ago
      Sure, I shouldn’t have said every $25K transaction. But from your link: “Violations aggregating $25,000 or more regardless of a potential suspect. Whenever the bank detects any known or suspected Federal criminal violation, or pattern of criminal violations, committed or attempted against the bank or involving a transaction or transactions conducted through the bank and involving or aggregating $25,000 or more in funds or other assets, where the bank believes that it was either an actual or potential victim of a criminal violation, or series of criminal violations, or that the bank was used to facilitate a criminal transaction, even though there is no substantial basis for identifying a possible suspect or group of suspects.” That’s such a hugely broad definition that it encompasses many innocent transactions. If a bank isn’t 100% sure about you or your business, a SAR covers their ass. I once had a bank decline to allow me to make large cash withdrawals because I was a new customer. They had no evidence I was doing anything improper. It was my funds, that I frequently deposited directly as cash. But mere “suspicion” is enough to restrict my rights, to protect the bank from regulators.
stefan_ 6y ago
I realize its a long article but it really deserves being read before jumping on the first trigger word (suspicious activity report).
- ckastner 6y ago
  You are right and I as I said, many banks are guilty of many sins. But the emphasis on SARs is from the article itself, and the SARs appear to be how they arrived at the $2T.
andi999 6y ago
Also the headline 'by serving oligarchs...' so what? Last time I checked beeing an oligarch was legal. This article reads, I dont know how to describe best, like xenophobic? Like who would do business with rich foreigners if not shady banks? I mean how are the banks supposed to smell if the transactions/client are dodgy?
- staticautomatic 6y ago
  Probably referring to people like African oligarchs who steal international aid intended to help their citizenry and Russian oligarchs who engaged in a variety of criminal shenanigans during the nationalization of USSR agencies in 92, among others.
  - valuearb 6y ago
    It’s not the transfers that are problematic, it’s the theft.
    - SpicyLemonZest 6y ago
      In many cases, the transfers serve the purpose of laundering the theft. Consider cases like 1MDB, where the bankers' sole job was helping Jho Low hide the fact that he was stealing all the money. (Although it must be noted that the regulatory regime here failed to prevent 1MDB!)
      - andi999 6y ago
        Do you have a link which elaborates this more? (The bankers helping jho low to hide the fact)
        SpicyLemonZest 6y ago
        The Guardian has (https://www.theguardian.com/world/2016/jul/28/1mdb-inside-story-worlds-biggest-financial-scandal-malaysia https://www.theguardian.com/world/2016/jul/28/1mdb-inside-st...) a pretty good overview of the scenario. The basic trick was to create an account owned by Jho Low (or in some cases by his co-conspirator Najib Razak), say "this account is owned by 1MDB", and send a bunch of 1MDB's money to it. The Goldman bankers' roles were to set up investment deals, bond offerings, etc., in order to create a plausible explanation for why money needed to go to these fraudulent accounts.

jandrese 6y ago

One can also hide things by sending an overwhelming amount of noise to drown out the signal.

ckastner 6y ago
Regulators aren’t completely inept and will catch on to this. Edit: to elaborate, too many false positives will be interpreted as a broken AML policy and that alone is already grounds for penalty.
valuearb 6y ago
They are required by law to file SARs. If the huge volume of SARs are overwhelming the regulators, perhaps the regulators should not have set the requirements so ridiculously broad for filing them.
- Nasrudith 6y ago
  It sounds like inflation and legislature's stubborn refusal to index value thresholds to inflation or cost of living for whatever reason (innumeracy, a desire to sneak in laws becoming stricter over time, wanting to set up future opportunities for horse-trading) is partially to blame. $25,000 isn't trivial but it is less than it used to be.
  - valuearb 6y ago
    It’s not inflation, the level never made sense when it started. Maybe $1M, but even the basis of this reporting makes little sense. Go deposit $9,000 in cash at your bank. Later in the same day deposit $1,000. You just committed a federal crime called structuring.
    - heavenlyblue 6y ago
      The idiocy of this crime is that technically it’s not that hard to make an SQL query to easily detect when someone deposits 10K over a single day so that shouldn’t be even an issue for law enforcement in the first place

raverbashing 6y ago

Agreed. I feel that at some point, this "crying wolf" over any transaction causes more issues than prevent them (see the recent issue about paypal not sending payments with an animal name in the transaction) People react to these news with outrage then are surprised to know why their bank account gets locked up or some seemingly innocuous transaction causes suspicious. Meanwhile, those who want to move large quantities of money illicitly will continue to be able to do so with ease.

djhworld 6y ago

> First, the banks actively filed these reports, so it's not like they were trying to hide these transactions. The ones they really wanted to hide, you won't find in these reports. The takeaway I got from the article was the banks filed the reports, but the government organisation designed investigate and take action is underfunded and staffed so reports probably never get read or actioned upon. So the banks continue doing custom with those they suspect are doing bad things.

valuearb 6y ago
It’s not illegal to do business with people you ”suspect” of doing “bad” things. It would be the most Orwellian thought crime if it was. Banks have to file a SAR for any group of transactions over $25,000, do you expect them to stop doing business with anyone who accumulates transfers over $25,000?
- panarky 6y ago
  > Banks have to file a SAR for any group of transactions over $25,000 This is manifestly false. The $25k number is only for suspected violations of federal law in that amount or larger, not every time I buy a car or transfer $25k to my brokerage account. Source: https://www.fincen.gov/sites/default/files/shared/FinCEN%20SAR%20ElectronicFilingInstructions-%20Stand%20Alone%20doc.pdf https://www.fincen.gov/sites/default/files/shared/FinCEN%20S...
  - valuearb 6y ago
    Sure, I shouldn’t have said every $25K transaction. But from your link: “Violations aggregating $25,000 or more regardless of a potential suspect. Whenever the bank detects any known or suspected Federal criminal violation, or pattern of criminal violations, committed or attempted against the bank or involving a transaction or transactions conducted through the bank and involving or aggregating $25,000 or more in funds or other assets, where the bank believes that it was either an actual or potential victim of a criminal violation, or series of criminal violations, or that the bank was used to facilitate a criminal transaction, even though there is no substantial basis for identifying a possible suspect or group of suspects.” That’s such a hugely broad definition that it encompasses many innocent transactions. If a bank isn’t 100% sure about you or your business, a SAR covers their ass. I once had a bank decline to allow me to make large cash withdrawals because I was a new customer. They had no evidence I was doing anything improper. It was my funds, that I frequently deposited directly as cash. But mere “suspicion” is enough to restrict my rights, to protect the bank from regulators.

stefan_ 6y ago

I realize its a long article but it really deserves being read before jumping on the first trigger word (suspicious activity report).

ckastner 6y ago
You are right and I as I said, many banks are guilty of many sins. But the emphasis on SARs is from the article itself, and the SARs appear to be how they arrived at the $2T.

andi999 6y ago

Also the headline 'by serving oligarchs...' so what? Last time I checked beeing an oligarch was legal. This article reads, I dont know how to describe best, like xenophobic? Like who would do business with rich foreigners if not shady banks? I mean how are the banks supposed to smell if the transactions/client are dodgy?

staticautomatic 6y ago
Probably referring to people like African oligarchs who steal international aid intended to help their citizenry and Russian oligarchs who engaged in a variety of criminal shenanigans during the nationalization of USSR agencies in 92, among others.
- valuearb 6y ago
  It’s not the transfers that are problematic, it’s the theft.
  - SpicyLemonZest 6y ago
    In many cases, the transfers serve the purpose of laundering the theft. Consider cases like 1MDB, where the bankers' sole job was helping Jho Low hide the fact that he was stealing all the money. (Although it must be noted that the regulatory regime here failed to prevent 1MDB!)
    - andi999 6y ago
      Do you have a link which elaborates this more? (The bankers helping jho low to hide the fact)
      - SpicyLemonZest 6y ago
        The Guardian has (https://www.theguardian.com/world/2016/jul/28/1mdb-inside-story-worlds-biggest-financial-scandal-malaysia https://www.theguardian.com/world/2016/jul/28/1mdb-inside-st...) a pretty good overview of the scenario. The basic trick was to create an account owned by Jho Low (or in some cases by his co-conspirator Najib Razak), say "this account is owned by 1MDB", and send a bunch of 1MDB's money to it. The Goldman bankers' roles were to set up investment deals, bond offerings, etc., in order to create a plausible explanation for why money needed to go to these fraudulent accounts.