Financial Crime Matters

Kieran talks with colleague Dr. Justine Walker, Global Head - Sanctions, Compliance and Risk at ACAMS, about the likely shape of sanctions against Russia should it invade Ukraine.

In the wake of ACAM’s Second Annual Sanctions Summit, Justine discusses keynote speaker and White House special advisor Peter Harrell’s promise of severe sanctions against Russia should it attack Ukraine and analyzes the Summit buzz about how the United States, United Kingdom and European Union as well as the financial industry are preparing for possible sanctions.

“In thinking of good practice… you do need to map your Russia exposure,” Justine says, adding that financial institutions and companies must ask, “Do you have investments in Russia? Do you have people in Russia? What type of securities exposure do you have? Are you exporting to Russia?” In the event of sanctions, she says, corporations should ask “What may you need to withdraw from and are you able to withdraw from that?”

Kieran talks with Anjana Rajan, chief technology officer for Polaris, about the work the not-for-profit does to fight human trafficking, including having helped more than 30,000 trafficking survivors via its national hotline.

In looking ahead, Anjana talks about the need to recreate the Internet to end its use by the powerful to exploit the vulnerable, a reality made only worse by the accelerated digitalization of life in the wake of COVID-19. Anjana says the current debate about Web 3, the next generation of the Internet, offers us all a chance to create a better virtual world or to further the Web’s capacity to be used for exploitation.

“As a cryptographer, I largely believe in the potential of Web 3 to help restore economic justice to victims and survivors of human trafficking,” Anjana says, “but as a human trafficking expert, I think Web 3 only offers that possibility, not the guarantee.”

Kieran talks with Dr. Tom Robinson, chief scientist and founder of Elliptic, a blockchain forensics company, about the phenomenal growth of decentralized finance, or DeFi. Offering the promise of a wide array of financial services on an inexpensive and inclusive basis, DeFi also presents a significant fraud and money laundering threat, Tom says. Drawing on Elliptic’s recently released report, “DeFi: Risk, Regulation and the Rise of DeCrime, which he co-wrote, Tom covers the need for legislation and greater regulatory oversight to stem fraud and money laundering as well as ways in which blockchain forensics are being used to track illicit funds on DeFi platforms.

“I think it is reasonable to describe this as the ‘Wild West’ in that there are fortunes to be made here and fortunes to be lost and that’s happening every day,” says Tom.

Kieran talks with Casey Michel about his just published book, “American Kleptocracy,” which details how the United States has become a favored destination for laundering money for corrupt politicians and other criminals. Competition among states such as Delaware, Wyoming and Nevada for fees for forming corporations and trusts as well as carveouts from oversight won by special interest groups are to blame, Casey says.

Casey, an investigative journalist who has been published widely, including in Foreign Affairs, Foreign Policy, The Atlantic, Washington Post, and The Guardian, talks about how financial intermediaries, including real estate agents and lawyers, have profited from aiding criminals by creating instruments to obscure the ownership of illicit funds. And, while optimistic that new legislation and regulation will curtail some of those practices, Casey says other industries used to launder money lack transparency and oversight, including hedge funds and private investment companies.

Kieran talks with Alex Zerden about his time as Treasury attaché at the United States Embassy in Kabul, the worsening humanitarian crisis in Afghanistan and the renewed terrorism threat related to the Taliban’s return to power.

Alex, the principal and founder of Capital Peak Strategies, a financial technology and digital asset advisory firm, talks about how the United States presence in Afghanistan was marked by corruption connected to an inflow of money the Afghan economy was incapable of absorbing. He adds that it was nonetheless “seeing the work and sacrifices made by my Afghan counterparts” that got him through his worst days.

“By my own research I have identified 17 terrorist organizations [now] operating in Afghanistan,” says Alex, in reflecting on the ongoing challenge the world faces to not reward the Taliban for “bad behavior” but to ease the humanitarian crisis now threatening Afghans.

Kieran talks with Jacqueline Shinfield, partner at Blakes, Cassels & Graydon about the latest legislative and regulatory requirements from Finance Canada and FINTRAC that are part of the nation’s renewed vigor to fight financial crime.

Ahead of the ACAMS Annual Canada Conference on 3, 4 November, Jackie and Kieran discuss Canada’s new cost recovery plan’s impact on FINTRAC regulated entities, issues arising from ongoing regulatory examinations, technological gaps in implementing the new electronic fund transfer reporting requirements and lessons from the Cullen Commission.

“If anyone is interested in learning about money laundering, ways to launder money, trade-based money laundering, there are so many incredible papers, affidavits online that make compelling reading if you are an AML geek,” Jackie says of the work of the Cullen Commission, which is set to end oral submission this month and due to release a final report by 15 December.

Kieran talks with Jessica Davis, president of Insight Threat Intelligence and the author of the just released “Illicit Money: Financing Terrorism in the Twenty-First Century.” Jessica discusses her comprehensive book, which is based on her study of some 50 terrorist organizations and terror attacks, in the wake of the Taliban’s return to power in Afghanistan and the rise of ideologically motivated violent extremist throughout the world.

“Attacks are often self-funded” and difficult to track whereas funding efforts to maintain terrorist organizations is generally done on a larger scale and often leaves a trail, says Jessica, who has served more than 20 years in various defense and intelligence roles in Canada, including four-and-a-half years as a senior strategic analyst with the Canadian Security Intelligence Service (CSIS).

This episode is sponsored by NICE Actimize: https://www.niceactimize.com

Kieran talks with Gurvais Grigg, Chainalysis’ Global Public Sector Chief Technology Officer, about tracking cryptocurrency used in fraud, ransomware and other crimes. Whether exchange traded digital currencies or so-called privacy coins, companies like Chainalysis, in tandem with law enforcement, are increasingly identifying cybercriminals and seizing their illicit funds, says Gurvais, who served more than 23 years with the FBI prior to joining the blockchain forensics company earlier this year.

“You see patterns and similarities. You may even see previously identified actors re-emerge,” Gurvais, who left the FBI as an assistant director and head of the crime lab, says of the fingerprints that cybercriminals leave.

This episode is sponsored by NICE Actimize’s Let’s Talk FinCrime: https://info.nice.com/lets-talk-fincrime.html

Kieran talks with Elizabeth “Liz” Roper, chief of the Cybercrime and Identity Theft Bureau within the New York County District Attorney’s office. As head of one of the most sophisticated anti-cybercrime labs in the world, Liz details what she sees as the most pressing emerging cybercrime threats and offers encouragement to prosecutors throughout the country who are challenged by spiraling incidents of cybercrime in their communities.

“From the day we first open a case, we’re working together with investigators, detectives, analysts and forensics experts to strategize,” says the 15-year veteran of the Manhattan district attorney’s office about the advantages of having cybercrime and other expertise under one roof. “That’s the key to our success.”

This Financial Crime Matters episode is sponsored by:

Refinitiv - http://www.refinitiv.com

Thomson Reuters - www.tr.com/risk-fraud

Kieran talks with former prosecutor Liz Loewy, who founded the elder abuse bureau in the New York District Attorney’s office in 1994 and is co-founder and current COO of EverSafe, a company that utilizes financial technology to protect elderly and vulnerable individuals from financial abuse.

“Loved ones have a responsibility to look out for one another,” Liz tells Kieran in describing how families should adopt a strategy to protect all their members from financial crime. With the rise in digital banking, Liz argues for a “fight fire with fire” strategy that relies on fintech to prevent and detect fraud and other criminal threats. Along the way, Liz also addresses what’s real and what’s not with regard to the abuse of older people in the Netflix movie “I Care a Lot”