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Leak reveals $2T of possibly corrupt US financial activity

m-nolan 6y ago
"However, the filing of an SAR does not require the bank to cease doing business with the client in question." This feels broken. Was this intended to prevent competitors from falsely filing SARs against each other to freeze their business? What are the penalties for abusing this system?
- vorpalhex 6y ago
  A SAR just means activity is suspicious. That's it - a SAR is not by itself evidence of wrongdoing, just a report to take a deeper look. "Hey, this persons makes mostly foreign transactions with vague companies" is a SAR. That's not a crime, and it may not be criminal behavior - it's just an indicator that someone should look closer. Can you imagine if your bank closed your account and refused to do business with you, without any kind of trial or notification, just because you did something that triggered a fraud measure? Or to put this another way, how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't?
  - oasisbob 6y ago
    > how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't? Ugh. I'd pay more for a credit card which didn't block my own transactions. Using a US credit card abroad can be seriously frustrating. The only thing worse than rapidly increasing airfares on small airlines with websites which barely work is when your credit card refuses to complete the transaction, requiring multiple international phone calls to resolve.
    - greggman3 6y ago
      I've had that happen too many times. I've had basically good luck with Capital One provided I tell them in advance which country I'll be in. I think at this point they let me set that online.
  - TallGuyShort 6y ago
    Or to put it another way, how do you like it when your content gets DMCA'd with no investigation and no recourse, because the enforcer doesn't want the liability and can't actually investigate? That's what would happen is SARS had to be treated as though they were proof of crimes.
- k2enemy 6y ago
  > Banks and other financial institutions file SARs when they believe a client is using their services for potential criminal activity. It sounds like banks file SARs about their own clients. I'm guessing they don't have to cease doing business with the client because that would create an incentive not to file SARs.
  - piker 6y ago
    ...and tipoff the 'suspicious' actor
- arafa 6y ago
  SARs are merely suspected illicit activity. The feds investigate and see if the claims have merit. They can also have varying degrees of severity which can affect account closure decisions.
- throwaway0a5e 6y ago
  It's a "suspicious activity report" not an "illegal activity report".
- sailfast 6y ago
  The Feds determine if the activity is illegal. SARS are filed as part of the bank’s duty to report and they are liable if they don’t report the activity. You want to err on the side of “more SARs” so you are covered. But if they’re leaked - that means reputational damage risk is higher so you’ll get less reports from banks and likely make it a lot harder to see patterns of illegal behavior. That’s why this agreement is in place.
- beh9540 6y ago
  SARs are required to be reported for all daily cash deposits greater than $10K by the Bank Secrecy Act.[1] Cash heavy businesses could easily hit this level, as well as large transactions that are perfectly legal, so you wouldn't want to stop doing business with a customer, just because they deposited a large amount of cash. [1] https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination...
  - vmception 6y ago
    and the threshold is not inflation linked, or location linked. it is just a 50 year misused law that has successfully spent the last half-century stigmatizing the concept of having money to move in the minds of people without money who want it.
  - wemblee 6y ago
    I mentioned this above on another comment but you're confusing SARs and CTRs.
troughway 6y ago
>According to the ICIJ the documents relate to more than $2tn of transactions dating from between 1999 and 2017. Way to pitch it that it’s somehow Trump doing it all. I wish HN would flag publications like, unfortunately, the guardian, bbc, that are known to twist data to suit a political agenda.
- syspec 6y ago
  Hmm i saw no mention of trump behind behind this. I saw a mention of manafort, and a 1 sentence description describing what he is most famous for: being trumps campaign manager
- engineer_22 6y ago
  OK so your point is top line includes Paul Manafort who is connected to Trump, but you cite here the leaks include transactions going back to the time of the Clinton administration?
- m348e912 6y ago
  The Guardian highlighting Paul Manafort as a way to tie this scandal to Trump is interesting for sure. The scandal is certainly bigger than one person. I have a hunch will go the way of the libor scandal which resulted in mostly fines, and the panama papers scandal which resulted in the journalist (Daphne Caruana Galizia) who broke the details winding up assassinated by a car bomb.
  - SiempreViernes 6y ago
    No it's not, it's just the press starting the article with the most famous name on the list: it's entirely expected. What would be weird is if they topped with Mukhtar Ablyazov (alphabetical order by last name) or Reza Zarrab (reverse alphabetical order by last name).
- icoder 6y ago
  I don't get it, Trumps name is only mentioned twice, and both times it concerns facts to place Manafort in the bigger picture.
syspec 6y ago
> In a statement released earlier this month FinCEN condemned the disclosure of the leaked documents and said it had referred the matter to the US Department of Justice. > “The Financial Crimes Enforcement Network is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed suspicious activity reports (SARs), as well as other sensitive government documents, from several years ago,” it stated. > “As FinCEN has stated previously, the unauthorised disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports Government response: Punish the leakers
- xvector 6y ago
  Seriously. If the reports are “years old” then there is no excuse for these to not have been dealt with.
  - jaywalk 6y ago
    Who is saying these haven't been dealt with? Filing a SAR doesn't mean the person is guilty, as the name indicates it's just suspicious.
    - me_me_me 6y ago
      I dunno, but Collateral Damage, Snowden panama papers... Imagine if they spend 10% of resources that they spent going after leakers punishing real perpetrators.
      - sailfast 6y ago
        They... do? That’s what FINCEN is.
      - vmception 6y ago
        SARs are just spam. There is nothing to deal with. Its an odd name for a receipt that gets printed at the bank's discretion.
gooseus 6y ago
Kind of ridiculous if you ask me... "possibly corrupt"? Is the court of public opinion taking on suspicious financial activity reports now? My gut says these leaked reports will have a greater negative impact on current corruption investigations than any positive impact from public consumption.
- vmception 6y ago
  you're right. this is the weakest leak, specifically aimed to perturb the public consciousness. the legislature called them "Suspicious Activity Reports" and then forget they did it. but they are "Useless Spam Reports". An investigative journalist decided to use the name and the current sentiment against "Banks" and "money" to write these articles.
  - defterGoose 6y ago
    "Crimes don't matter" "Democracy doesn't matter" "Nothing matters" "You should just accept it" Does that sum it up pretty well? You seem to have a pretty vested interest in this being ignored if judged by the volume of similar comments you've left in this thread.
    - vmception 6y ago
      I have a general interest in people understanding what this is. A suspicious activity report is not about a crime, it isn't about anything being suspected of a crime or even actually suspicious. SARs are an ill thought compliance nuance created by Congress 50 years ago with a ridiculous name. The headline even has a vested interested in covering its own ass with the wording "possibly corrupt" because their own legal department was like "really?" and the editor in chief was like "but think of the clicks!"
      - defterGoose 6y ago
        So news organizations have an interest in having their stories heard? Film at 11. TFA literally makes no accusations, it is simply stating the facts. Manafort was convicted of money laundering and fraud, and the fact that many of these reports were filed on him makes it seem like the system is working as intended. Similarly, Mogilevich is wanted by the FBI. Maybe that should mean there's a reason for banks to stop doing business with him? No one here is arguing that banks should be required to stop doing business with anyone who triggers one of these reports. The point is that based on retrospect, they haven't been doing a good job of operating on the information they have, so maybe it's time to actually give such a law teeth.
quakeiv 6y ago
yeah im with the people who are saying its a bad idea to release this data, spreading suspicion is completely pointless.
pkphilip 6y ago
$2 trillion? I thought the latest figure was $35 Trillion - and thats just from the Pentagon https://finance.yahoo.com/news/pentagon-35-trillion-accounting-black-231154593.html https://finance.yahoo.com/news/pentagon-35-trillion-accounti...
- SpicyLemonZest 6y ago
  This article seems to be carefully avoiding a very important contextual question - what's the expected value of these "accounting adjustments" for a large organization?
- kjaftaedi 6y ago
  So many things wrong with this comment. The 2 trillion we are talking about is 'corrupt' financial activity. Money laundering and this sort of thing. Pentagon financial adjustments are not even close to being related. Lastly the article you posted says 35 trillion in adjustments, but doesn't say how far back in time they went making adjustments, so that number is meaningless. Whoever this reporter is seems to not be familiar with accounting or finance.
shrubble 6y ago
SARs are filed automatically any time the amount is over a certain number, I think the simplest one is at $10k and then there is a more detailed one for some larger threshold amount. There must be millions filed per week. Have never been able to determine if what someone told me is true... that publicly traded companies are exempt from many of these regulations.
- wemblee 6y ago
  That's incorrect. You're confusing SARs with CTRs, which are reports of cash transactions. SARs are for the most part at the discretion of bank compliance officers, although there are a few "automatic" ones.
  - sneak 6y ago
    SARs are required any time someone is asked to fill out a CTR (which they can be, by the bank, optionally, for any amount) and declines to do so. Imagine going to your bank and trying to withdraw $3000 or $5000 in cash, and them asking you to fill out a CTR out of an abundance of caution (like the fact that you’ve never made a cash withdrawal of that size before). Don’t feel like filling out extra forms to get access to your own money? In a hurry and don’t have time? Decline the CTR and say you’ll deal with it another time? It’s now a criminal offense for the bank to not file a SAR based on your refusal to complete the requested CTR.
  - shrubble 6y ago
    https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination... Quoted from above page on SAR reports: Under the Bank Secrecy Act (BSA), financial institutions are required to assist U.S. government agencies in detecting and preventing money laundering, such as: -Keep records of cash purchases of negotiable instruments, -File reports of cash transactions exceeding $10,000 (daily aggregate amount), and -Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion).
- deleted 6y ago
simon1ltd 6y ago
It might help if anyone paid attention to what a SAR IS: https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination... Keep records of cash purchases of negotiable instruments, File reports of cash transactions exceeding $10,000 (daily aggregate amount), and Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion) If you do more than $10,000 in cash business/transactions, the bank will (must) file a report -- if you're deposit $8000 one day and $4000 the next day, the bank might be forced to consider it a single transaction for $12,000 -- and file a SAR. There's fantastic reasons to keep this confidential -- Given that requirements to file are so broad, almost all of these are going to be normal business activity.
- ceejayoz 6y ago
  Hang on, that's mixing two things. Transactions over $10k aren't automatically a SAR. https://en.wikipedia.org/wiki/Currency_transaction_report https://en.wikipedia.org/wiki/Currency_transaction_report > CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Referral.
- sharkweek 6y ago
  As a former bank teller let me tell you all the brilliant ways people would try to get around this. * Depositing $9,999 cash (yeah, still gonna report that) * Depositing random X,000 cash increments across multiple transactions (yeah, still going to report that) * Making cash deposits across multiple locations in the same day/week (as if the computer didn’t alert us to multiple cash deposits)
  - gruez 6y ago
    So if I want to get around it all I need to do is * make sure the deposits are under $9000, but also not some amount that's "suspicious" like $8,999 * make sure the deposits happen on a regular interval * make sure the deposits are at the same branch I also suspect banks don't share information to generate SAR (eg. a deposit of $15,000 at one bank would generate a SAR, but a deposit of $7,500 at two banks on the same day won't generate a SAR), so if you need to deposit more cash then all you need to do is open more accounts at more banks.
mabbo 6y ago
> The leak focuses on more than 2,000 suspicious activity reports (SARs) filed with the US government’s Financial Crimes Enforcement Network (FinCEN). I think it's important to get the right mindset on what these are before we cry foul. All banks will report 'large' transactions to their country's Financial Intelligence bureau. In the US, that's FINCEN. In Canada, that's FINTRAC, where I interned way back in 2006. Here, that means for all transactions over $10,000 CAD (or if the sum of transactions from an account within 24 hours exceeds $10,000), a report is filed, and FINTRAC keeps the report for 5 years while they look for signs of money laundering or terrorist financing. They data mine this to find patterns that indicate criminal activity. In 2006, while I was an intern, the Montreal mafia was brought down this way. Suspicious Activity Reports, SARs are just what they sound like- the banker says 'something smells funny about this'. They want to let someone know about it. For example, let's say there's a particular person who moves $9,999 every day from his account to another one. That's under the $10,000 reporting limit but the bank can say "That's a bit weird, let's report it with an SAR". They can provide more details of why they're concerned. The banks aren't the police. They don't know a crime has taken place. That person moving $9,999 every day could be doing something not criminal at all. And it's not the banks place to stop them- because that is just ripe for abuse. "Hey, I think all people of <race> are suspicious, so anytime they move $1000 or more, I file an SAR and close their accounts". Or "Hey, that guy is part of <political organization which I don't agree with>, so I flag all his transactions with SARs". In this case, there are SARs leaked related to some large transactions involving suspicious circumstances. That doesn't mean there's a crime! But it does mean that someone raised an eyebrow and flagged something so that it could be followed up on by the right government authorities. It's up to the US FINCEN to decide if a crime took place and to handle it accordingly. You decide if you trust them or not, but that is their role in this. (Do I think Paul Manafort is innocent? That is a whole different question.)
- ericd 6y ago
  So anyone who's ever bought a house in the US or Canada has had an SAR about them?
  - ceejayoz 6y ago
LGNUITLZCJ 6y ago
Banks get punished if there was fradulent activity and they didn't publish a SAR. This means banks will file SARs even when there isn't any real fraud going on, just behaviour that their models flag as "suspicious".
ipnon 6y ago
The disparity between the burden of proof for Section 230 and an SAR says it all: the foxes are guarding the hen house.
jungletime 6y ago
Were the Ferengi involved?
christocracy 6y ago
I wire-transfer tens-of-thousands of USD / month from my bank to my wealth-management company for perfectly valid reasons (e-commerce revenue), primarily to exchange to CAD (far better rate than bank) for funding payroll and/or purchase Investments. With each transfer, my investment company has me fill-out / sign a form declaring Source of Funds. If the gov’t finds anything suspicious, there’s an airtight paper-trail for all these transactions. Nothing to see here.
conanbatt 6y ago
The financial activity is not generally corrupt, it is the act by the which the money is obtained that is corrupt. The immense pressure of money laundering comes with a lot of consequences to the cost of transactions, the utilization of commercial banks as part of monetary policy, etc. This is one of the core reasons why bitcoin exists, to precisely avoid these kind of banking issues. Moreover its over-sensationalized with the conflation between money and wealth. All the dollars stashed away in a cayman islands account is doing no harm to anyone: its depreciating as it is as a holding. Money has no effect unless its spent. And whatever is spent is just as good as regular consumption. It's not even in the interest of government to get the money back: if a few trillion dollars were suddently released into circulation you would have inflation and would not be able to print money that gov is already spending. Following the money to fight crime has been a ruse.
curiousllama 6y ago
The $2T focuses on "high-risk individuals from around the world, in some cases even after they had been placed under sanctions by the US government." So this isn't new "they're not taking this seriously" allegations; it's a methods leak. As a aggressively-pro-transparency advocate, this seems like... a reasonable thing to keep secret, no? Am I missing something? JP Morgan did the right thing; HSBC was _already known_ to be failing to stop fraudulent transfers; and there's no allegations of impropriety on the part of the government. Seriously: what's the motivation behind the leak?
- Threeve303 6y ago
  > what's the motivation behind the leak? To let criminals know which banks they can trust?
  - Gibbon1 6y ago
    Motivation is that small fry are going to prison as always but high wealth criminals with political connections are being ignored.
cycomanic 6y ago
There seems to be a serious amount of astroturfing going on here there's no other way to explain all these "every 10k transaction generates a SAR... all these things might be harmless, maybe some startup needed some cash liquidity..." First these are 2000 SARs over a period of 8 years, so if SARs get filled very often (I have no idea if they do), then this would be a very select few of them. Maybe someone already did a selection based on the specific activity?! Second this is $2 Tn in 2000 transactions I leave it as an excersise to calculate how much on average that is, but you can be assured this is not some random person buying. I would wager that most nation states very rarely move that amount of money around.
- paranorman 6y ago
  Do the accounts posting this information look suspicious? I’m not doubting your claim at all, merely curious about the prevalence of astroturfing on HN.
merricksb 6y ago
Previous discussions of this topic: https://news.ycombinator.com/item?id=24535241 https://news.ycombinator.com/item?id=24535241 (535 points/220 comments) https://news.ycombinator.com/item?id=24535903 https://news.ycombinator.com/item?id=24535903 (131 points/16 comments) https://news.ycombinator.com/item?id=24539132 https://news.ycombinator.com/item?id=24539132 (110 points/26 comments) https://news.ycombinator.com/item?id=24536630 https://news.ycombinator.com/item?id=24536630 (83 points)

"However, the filing of an SAR does not require the bank to cease doing business with the client in question." This feels broken. Was this intended to prevent competitors from falsely filing SARs against each other to freeze their business? What are the penalties for abusing this system?

vorpalhex 6y ago
A SAR just means activity is suspicious. That's it - a SAR is not by itself evidence of wrongdoing, just a report to take a deeper look. "Hey, this persons makes mostly foreign transactions with vague companies" is a SAR. That's not a crime, and it may not be criminal behavior - it's just an indicator that someone should look closer. Can you imagine if your bank closed your account and refused to do business with you, without any kind of trial or notification, just because you did something that triggered a fraud measure? Or to put this another way, how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't?
- oasisbob 6y ago
  > how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't? Ugh. I'd pay more for a credit card which didn't block my own transactions. Using a US credit card abroad can be seriously frustrating. The only thing worse than rapidly increasing airfares on small airlines with websites which barely work is when your credit card refuses to complete the transaction, requiring multiple international phone calls to resolve.
  - greggman3 6y ago
    I've had that happen too many times. I've had basically good luck with Capital One provided I tell them in advance which country I'll be in. I think at this point they let me set that online.
- TallGuyShort 6y ago
  Or to put it another way, how do you like it when your content gets DMCA'd with no investigation and no recourse, because the enforcer doesn't want the liability and can't actually investigate? That's what would happen is SARS had to be treated as though they were proof of crimes.
k2enemy 6y ago
> Banks and other financial institutions file SARs when they believe a client is using their services for potential criminal activity. It sounds like banks file SARs about their own clients. I'm guessing they don't have to cease doing business with the client because that would create an incentive not to file SARs.
- piker 6y ago
  ...and tipoff the 'suspicious' actor
arafa 6y ago
SARs are merely suspected illicit activity. The feds investigate and see if the claims have merit. They can also have varying degrees of severity which can affect account closure decisions.
throwaway0a5e 6y ago
It's a "suspicious activity report" not an "illegal activity report".
sailfast 6y ago
The Feds determine if the activity is illegal. SARS are filed as part of the bank’s duty to report and they are liable if they don’t report the activity. You want to err on the side of “more SARs” so you are covered. But if they’re leaked - that means reputational damage risk is higher so you’ll get less reports from banks and likely make it a lot harder to see patterns of illegal behavior. That’s why this agreement is in place.
beh9540 6y ago
SARs are required to be reported for all daily cash deposits greater than $10K by the Bank Secrecy Act.[1] Cash heavy businesses could easily hit this level, as well as large transactions that are perfectly legal, so you wouldn't want to stop doing business with a customer, just because they deposited a large amount of cash. [1] https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination...
- vmception 6y ago
  and the threshold is not inflation linked, or location linked. it is just a 50 year misused law that has successfully spent the last half-century stigmatizing the concept of having money to move in the minds of people without money who want it.
- wemblee 6y ago
  I mentioned this above on another comment but you're confusing SARs and CTRs.

troughway 6y ago

>According to the ICIJ the documents relate to more than $2tn of transactions dating from between 1999 and 2017. Way to pitch it that it’s somehow Trump doing it all. I wish HN would flag publications like, unfortunately, the guardian, bbc, that are known to twist data to suit a political agenda.

syspec 6y ago
Hmm i saw no mention of trump behind behind this. I saw a mention of manafort, and a 1 sentence description describing what he is most famous for: being trumps campaign manager
engineer_22 6y ago
OK so your point is top line includes Paul Manafort who is connected to Trump, but you cite here the leaks include transactions going back to the time of the Clinton administration?
m348e912 6y ago
The Guardian highlighting Paul Manafort as a way to tie this scandal to Trump is interesting for sure. The scandal is certainly bigger than one person. I have a hunch will go the way of the libor scandal which resulted in mostly fines, and the panama papers scandal which resulted in the journalist (Daphne Caruana Galizia) who broke the details winding up assassinated by a car bomb.
- SiempreViernes 6y ago
  No it's not, it's just the press starting the article with the most famous name on the list: it's entirely expected. What would be weird is if they topped with Mukhtar Ablyazov (alphabetical order by last name) or Reza Zarrab (reverse alphabetical order by last name).
icoder 6y ago
I don't get it, Trumps name is only mentioned twice, and both times it concerns facts to place Manafort in the bigger picture.

syspec 6y ago

> In a statement released earlier this month FinCEN condemned the disclosure of the leaked documents and said it had referred the matter to the US Department of Justice. > “The Financial Crimes Enforcement Network is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed suspicious activity reports (SARs), as well as other sensitive government documents, from several years ago,” it stated. > “As FinCEN has stated previously, the unauthorised disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports Government response: Punish the leakers

xvector 6y ago
Seriously. If the reports are “years old” then there is no excuse for these to not have been dealt with.
- jaywalk 6y ago
  Who is saying these haven't been dealt with? Filing a SAR doesn't mean the person is guilty, as the name indicates it's just suspicious.
  - me_me_me 6y ago
    I dunno, but Collateral Damage, Snowden panama papers... Imagine if they spend 10% of resources that they spent going after leakers punishing real perpetrators.
    - sailfast 6y ago
      They... do? That’s what FINCEN is.
    - vmception 6y ago
      SARs are just spam. There is nothing to deal with. Its an odd name for a receipt that gets printed at the bank's discretion.

gooseus 6y ago

Kind of ridiculous if you ask me... "possibly corrupt"? Is the court of public opinion taking on suspicious financial activity reports now? My gut says these leaked reports will have a greater negative impact on current corruption investigations than any positive impact from public consumption.

vmception 6y ago
you're right. this is the weakest leak, specifically aimed to perturb the public consciousness. the legislature called them "Suspicious Activity Reports" and then forget they did it. but they are "Useless Spam Reports". An investigative journalist decided to use the name and the current sentiment against "Banks" and "money" to write these articles.
- defterGoose 6y ago
  "Crimes don't matter" "Democracy doesn't matter" "Nothing matters" "You should just accept it" Does that sum it up pretty well? You seem to have a pretty vested interest in this being ignored if judged by the volume of similar comments you've left in this thread.
  - vmception 6y ago
    I have a general interest in people understanding what this is. A suspicious activity report is not about a crime, it isn't about anything being suspected of a crime or even actually suspicious. SARs are an ill thought compliance nuance created by Congress 50 years ago with a ridiculous name. The headline even has a vested interested in covering its own ass with the wording "possibly corrupt" because their own legal department was like "really?" and the editor in chief was like "but think of the clicks!"
    - defterGoose 6y ago
      So news organizations have an interest in having their stories heard? Film at 11. TFA literally makes no accusations, it is simply stating the facts. Manafort was convicted of money laundering and fraud, and the fact that many of these reports were filed on him makes it seem like the system is working as intended. Similarly, Mogilevich is wanted by the FBI. Maybe that should mean there's a reason for banks to stop doing business with him? No one here is arguing that banks should be required to stop doing business with anyone who triggers one of these reports. The point is that based on retrospect, they haven't been doing a good job of operating on the information they have, so maybe it's time to actually give such a law teeth.

quakeiv 6y ago

yeah im with the people who are saying its a bad idea to release this data, spreading suspicion is completely pointless.

pkphilip 6y ago

$2 trillion? I thought the latest figure was $35 Trillion - and thats just from the Pentagon https://finance.yahoo.com/news/pentagon-35-trillion-accounting-black-231154593.html https://finance.yahoo.com/news/pentagon-35-trillion-accounti...

SpicyLemonZest 6y ago
This article seems to be carefully avoiding a very important contextual question - what's the expected value of these "accounting adjustments" for a large organization?
kjaftaedi 6y ago
So many things wrong with this comment. The 2 trillion we are talking about is 'corrupt' financial activity. Money laundering and this sort of thing. Pentagon financial adjustments are not even close to being related. Lastly the article you posted says 35 trillion in adjustments, but doesn't say how far back in time they went making adjustments, so that number is meaningless. Whoever this reporter is seems to not be familiar with accounting or finance.

shrubble 6y ago

SARs are filed automatically any time the amount is over a certain number, I think the simplest one is at $10k and then there is a more detailed one for some larger threshold amount. There must be millions filed per week. Have never been able to determine if what someone told me is true... that publicly traded companies are exempt from many of these regulations.

wemblee 6y ago
That's incorrect. You're confusing SARs with CTRs, which are reports of cash transactions. SARs are for the most part at the discretion of bank compliance officers, although there are a few "automatic" ones.
- sneak 6y ago
  SARs are required any time someone is asked to fill out a CTR (which they can be, by the bank, optionally, for any amount) and declines to do so. Imagine going to your bank and trying to withdraw $3000 or $5000 in cash, and them asking you to fill out a CTR out of an abundance of caution (like the fact that you’ve never made a cash withdrawal of that size before). Don’t feel like filling out extra forms to get access to your own money? In a hurry and don’t have time? Decline the CTR and say you’ll deal with it another time? It’s now a criminal offense for the bank to not file a SAR based on your refusal to complete the requested CTR.
- shrubble 6y ago
  https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination... Quoted from above page on SAR reports: Under the Bank Secrecy Act (BSA), financial institutions are required to assist U.S. government agencies in detecting and preventing money laundering, such as: -Keep records of cash purchases of negotiable instruments, -File reports of cash transactions exceeding $10,000 (daily aggregate amount), and -Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion).
deleted 6y ago

simon1ltd 6y ago

It might help if anyone paid attention to what a SAR IS: https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination... Keep records of cash purchases of negotiable instruments, File reports of cash transactions exceeding $10,000 (daily aggregate amount), and Report suspicious activity that might signal criminal activity (e.g., money laundering, tax evasion) If you do more than $10,000 in cash business/transactions, the bank will (must) file a report -- if you're deposit $8000 one day and $4000 the next day, the bank might be forced to consider it a single transaction for $12,000 -- and file a SAR. There's fantastic reasons to keep this confidential -- Given that requirements to file are so broad, almost all of these are going to be normal business activity.

ceejayoz 6y ago
Hang on, that's mixing two things. Transactions over $10k aren't automatically a SAR. https://en.wikipedia.org/wiki/Currency_transaction_report https://en.wikipedia.org/wiki/Currency_transaction_report > CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Referral.
sharkweek 6y ago
As a former bank teller let me tell you all the brilliant ways people would try to get around this. * Depositing $9,999 cash (yeah, still gonna report that) * Depositing random X,000 cash increments across multiple transactions (yeah, still going to report that) * Making cash deposits across multiple locations in the same day/week (as if the computer didn’t alert us to multiple cash deposits)
- gruez 6y ago
  So if I want to get around it all I need to do is * make sure the deposits are under $9000, but also not some amount that's "suspicious" like $8,999 * make sure the deposits happen on a regular interval * make sure the deposits are at the same branch I also suspect banks don't share information to generate SAR (eg. a deposit of $15,000 at one bank would generate a SAR, but a deposit of $7,500 at two banks on the same day won't generate a SAR), so if you need to deposit more cash then all you need to do is open more accounts at more banks.

mabbo 6y ago

> The leak focuses on more than 2,000 suspicious activity reports (SARs) filed with the US government’s Financial Crimes Enforcement Network (FinCEN). I think it's important to get the right mindset on what these are before we cry foul. All banks will report 'large' transactions to their country's Financial Intelligence bureau. In the US, that's FINCEN. In Canada, that's FINTRAC, where I interned way back in 2006. Here, that means for all transactions over $10,000 CAD (or if the sum of transactions from an account within 24 hours exceeds $10,000), a report is filed, and FINTRAC keeps the report for 5 years while they look for signs of money laundering or terrorist financing. They data mine this to find patterns that indicate criminal activity. In 2006, while I was an intern, the Montreal mafia was brought down this way. Suspicious Activity Reports, SARs are just what they sound like- the banker says 'something smells funny about this'. They want to let someone know about it. For example, let's say there's a particular person who moves $9,999 every day from his account to another one. That's under the $10,000 reporting limit but the bank can say "That's a bit weird, let's report it with an SAR". They can provide more details of why they're concerned. The banks aren't the police. They don't know a crime has taken place. That person moving $9,999 every day could be doing something not criminal at all. And it's not the banks place to stop them- because that is just ripe for abuse. "Hey, I think all people of <race> are suspicious, so anytime they move $1000 or more, I file an SAR and close their accounts". Or "Hey, that guy is part of <political organization which I don't agree with>, so I flag all his transactions with SARs". In this case, there are SARs leaked related to some large transactions involving suspicious circumstances. That doesn't mean there's a crime! But it does mean that someone raised an eyebrow and flagged something so that it could be followed up on by the right government authorities. It's up to the US FINCEN to decide if a crime took place and to handle it accordingly. You decide if you trust them or not, but that is their role in this. (Do I think Paul Manafort is innocent? That is a whole different question.)

ericd 6y ago
So anyone who's ever bought a house in the US or Canada has had an SAR about them?
- ceejayoz 6y ago

LGNUITLZCJ 6y ago

Banks get punished if there was fradulent activity and they didn't publish a SAR. This means banks will file SARs even when there isn't any real fraud going on, just behaviour that their models flag as "suspicious".

ipnon 6y ago

The disparity between the burden of proof for Section 230 and an SAR says it all: the foxes are guarding the hen house.

jungletime 6y ago

Were the Ferengi involved?

christocracy 6y ago

I wire-transfer tens-of-thousands of USD / month from my bank to my wealth-management company for perfectly valid reasons (e-commerce revenue), primarily to exchange to CAD (far better rate than bank) for funding payroll and/or purchase Investments. With each transfer, my investment company has me fill-out / sign a form declaring Source of Funds. If the gov’t finds anything suspicious, there’s an airtight paper-trail for all these transactions. Nothing to see here.

conanbatt 6y ago

The financial activity is not generally corrupt, it is the act by the which the money is obtained that is corrupt. The immense pressure of money laundering comes with a lot of consequences to the cost of transactions, the utilization of commercial banks as part of monetary policy, etc. This is one of the core reasons why bitcoin exists, to precisely avoid these kind of banking issues. Moreover its over-sensationalized with the conflation between money and wealth. All the dollars stashed away in a cayman islands account is doing no harm to anyone: its depreciating as it is as a holding. Money has no effect unless its spent. And whatever is spent is just as good as regular consumption. It's not even in the interest of government to get the money back: if a few trillion dollars were suddently released into circulation you would have inflation and would not be able to print money that gov is already spending. Following the money to fight crime has been a ruse.

curiousllama 6y ago

The $2T focuses on "high-risk individuals from around the world, in some cases even after they had been placed under sanctions by the US government." So this isn't new "they're not taking this seriously" allegations; it's a methods leak. As a aggressively-pro-transparency advocate, this seems like... a reasonable thing to keep secret, no? Am I missing something? JP Morgan did the right thing; HSBC was _already known_ to be failing to stop fraudulent transfers; and there's no allegations of impropriety on the part of the government. Seriously: what's the motivation behind the leak?

Threeve303 6y ago
> what's the motivation behind the leak? To let criminals know which banks they can trust?
- Gibbon1 6y ago
  Motivation is that small fry are going to prison as always but high wealth criminals with political connections are being ignored.

cycomanic 6y ago

There seems to be a serious amount of astroturfing going on here there's no other way to explain all these "every 10k transaction generates a SAR... all these things might be harmless, maybe some startup needed some cash liquidity..." First these are 2000 SARs over a period of 8 years, so if SARs get filled very often (I have no idea if they do), then this would be a very select few of them. Maybe someone already did a selection based on the specific activity?! Second this is $2 Tn in 2000 transactions I leave it as an excersise to calculate how much on average that is, but you can be assured this is not some random person buying. I would wager that most nation states very rarely move that amount of money around.

paranorman 6y ago
Do the accounts posting this information look suspicious? I’m not doubting your claim at all, merely curious about the prevalence of astroturfing on HN.

merricksb 6y ago

Previous discussions of this topic: https://news.ycombinator.com/item?id=24535241 https://news.ycombinator.com/item?id=24535241 (535 points/220 comments) https://news.ycombinator.com/item?id=24535903 https://news.ycombinator.com/item?id=24535903 (131 points/16 comments) https://news.ycombinator.com/item?id=24539132 https://news.ycombinator.com/item?id=24539132 (110 points/26 comments) https://news.ycombinator.com/item?id=24536630 https://news.ycombinator.com/item?id=24536630 (83 points)