Taking AML to the Next Level


Bob Tie, CFE, CFP
Fraud Magazine contributing editor

Liberty Reserve, S.A., a Costa Rica-based Internet money transfer system, served a million customers around the world and in the U.S. Not any more. On May 28, FinCEN director Jennifer Shasky Calvery and Preet Bharara, U.S. Attorney for the Southern District of New York, initiated tough administrative and prosecutorial measures against Liberty, which they said employed its widely used digital currency to launder criminals’ illicit profits on an unprecedented scale.

This case and others like it exemplify a major challenge facing fraud fighters today: Innovative fraudsters in lax jurisdictions — unless prevented — can run Internet-based fraud schemes, which can undermine even the world’s most carefully regulated financial systems.

Shasky Calvery therefore issued a Notice of Finding that Liberty Reserve, operating outside the U.S. as a financial institution (FI), was “of primary money laundering [ML] concern.” At the same time, Bharara indicted seven Liberty principals and employees for processing 55 million allegedly illegal transactions to launder $6 billion in suspected proceeds of crimes including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking.

FinCEN’s issuance barred Liberty from the U.S. financial system and alerted the international community to the risks the firm presented. The Department of Justice’s (DOJ) indictment charged each Liberty official with conspiracy to commit money laundering, which carries a maximum prison term of 20 years, and with other charges that could draw terms adding up to 10 more years.

Further, the DOJ, in concert with the U.S. Secret Service, IRS Criminal Investigation, Immigration and Customs Enforcement, Homeland Security Investigations and law enforcement agencies from 17 other countries, arrested five Liberty officials and seized the firm’s Internet domain (formerly www.libertyreserve.com), terminating its operations. They also shuttered the sites of several currency exchangers that had electronically funneled depositors’ allegedly illicit funds to Liberty for transfer to accounts that disguised their true origin.


FinCEN’s mission, as a bureau of the Department of the Treasury, is to safeguard the U.S. financial system from ML and other abuses and to collect, analyze and disseminate financial intelligence, while helping to coordinate anti-money laundering (AML) and counterterrorism financing (CTF) activities for maximum effectiveness.

FinCEN has been coordinating its efforts with the DOJ plus domestic and foreign law enforcement for years. The financial services industry — FinCEN’s eyes and ears in the marketplace — has long reported possible ML and terrorist financing. And FinCEN has always worked closely with U.S. and international financial regulators to increase the effectiveness and practicality of domestic and global AML compliance and enforcement regimes.

So is the status quo good enough? Not if AML teams hope to do more than merely react to the latest schemes, which as the Liberty Reserve case shows, can involve a staggering number of global participants whose various criminal activities finance the spread of organized crime.

Read the rest of the Special to the Web article on Fraud-Magazine.com.

Fraud Conference is a News Maker


Scott Patterson
ACFE Senior Media Relations Specialist

When most people think about conferences, they conjure thoughts of chilly meeting rooms and PowerPoint presentations. Name tags. Perhaps some dry “trade talk” and (you hope) some free swag. These events are important for our professional development – but let’s be honest, for anyone not involved, a conference isn’t exactly headline-grabbing news. Unless it’s the ACFE Global Fraud Conference, that is.

There are always a number of journalists covering the annual event, and this year was no different. They came to report on the latest trends in cyber fraud, online investigations, interviewing techniques and other cutting-edge issues in our profession. Not only that, they wanted to hear what our keynote speakers had to say to thousands of fraud fighters who hung onto their every word. This year saw even more media coverage than usual, including live reporting by CNBC and on-location coverage from Fortune, Forbes, Accounting Today and other venues.

When CNBC set up their cameras to film the ACFE’s Cressey Award-winner Preet Bharara on the opening day of the Conference, they anxiously waited to see what breaking news he would announce from the podium. Bharara, U.S. Attorney for the Southern District of New York, didn’t disappoint: During his speech he revealed that the 2nd Circuit issued its ruling on the Raj Rajaratnam (currently serving 11 years in prison) appeal by upholding the conviction – a statement that was met with enthusiastic applause from the audience.

Forbes blogger Walt Pavlo and Accounting Today editor-in-chief Michael Cohn attended breakout sessions and covered a variety of aspects of the conference. Peter Elkind, Fortune editor-at-large and co-author of The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, was on hand to see Andrew Fastow deliver the conference’s closing keynote address.

The Fastow appearance created a lot of buzz around the Conference. It was his first public appearance before a large audience and the media. Though his speech was not videotaped, as per his request, CNBC reported live (on-location from the conference) immediately following his address with reaction to his revelations and admissions.  

CNBC reporter Scott Cohn and his crew stayed through the entire Main Conference, talking with speakers, attendees and exhibitors. The result was a great clip produced for PBS Nightly Business Report that covered the event as a whole, a summation of the largest gathering of anti-fraud professionals in the world included in a segment titled, "Financial Fraud Fears."

It’s exciting to see the media sharing the experience of the ACFE Global Fraud Conference with the rest of the world. It just helps illustrate that it’s not only a conference – it’s an event.

Read all of the news coverage from the Conference.

A Bit of Advice: Speak Up


Christopher Ekimoff, CFE, CPA
Manager, Investigative Accounting & Financial Litigation, Duff & Phelps
Washington, D.C.

As a boisterous child, I never found it hard to speak up. Whether shouting out a response without raising my hand or sharing my thoughts during lunch with a friend a few tables away, speaking up got me noticed early on (and not always positively). That characteristic has transitioned into my career as well. I’m always the first to comment on the quality of the food I’ve ordered or the potential inefficiencies in a particular process.

The idea of “speaking up” has grown in the media and around the business world in recent years. In light of the 2008 financial crisis, more and more investors, Congressional committees and regulators have asked, “Why didn’t more people speak up?”

In the May/June issue of Fraud Magazine, Preet Bharara, U.S. Attorney for the Southern District of New York, and keynote speaker at the upcoming ACFE Global Fraud Conference in Las Vegas, Nev., outlines his focus on creating an environment that supports whistleblowing:

“First, there has to be a culture in which people who see something bad going on feel comfortable coming forward, and second, people who are taking in the complaints have to be smart enough and care enough to do something about it.”

In career terms, speaking up can be daunting. From reporting questionable behavior to inquiring about a specific task, fear of judgment by a superior can silence even the most confident individual. Often, however, the worry is twice as bad as the result. Speaking up to your superior about any number of issues can also work in your favor:

  • Speaking up shares ideas – For any continually successful team, office or firm, sharing ideas and diverse viewpoints is necessary. By soliciting and valuing the opinions of all members, solutions come more easily and are more readily implemented.
  • Speaking up differentiates you – A team member willing to share his or her ideas demonstrates confidence, a mastery of a certain set of tools and the ability to work collaboratively in a team setting.

Sure, we can’t all be famous whistleblowers. And being a whistleblower is hard. Harry Markopolos shared his take on Bernie Madoff with numerous government regulators, industry publications and media sources without being heard. Michael Woodford was fired as CEO of Olympus and shunned by his colleagues after reporting his concerns of improper write-offs to the Board of Directors. But, in time, their honesty and integrity erased any stigma that originated with speaking up.

Don’t be afraid to speak up. If you don’t, who will?