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Money Laundering and AML Compliance

bitsaboutmoney.com

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171–180 of 218 posts

Re: Money Laundering and AML Compliance

#171

Post by AviationAtom »

e28eta wrote: post #110

> In part this is because some Americans in the financial industry will involve HR if you describe money as having a color other than green. There are, of course, many speakers of English for whom the history and current relevance of U.S. race relations do not pose strong concern relative to, for example, domestic public corruption I’m disappointed this is the way patio11 chose to summarize why we’re reducing the usa…

You should see how much extra work the campaign is causing in the information security field. Everything has to be rewritten.

Re: Money Laundering and AML Compliance

#172

Post by nulbyte »

raincom wrote: post #146
JusticeJuice wrote: post #67

Excellent essay. The 10k rule mentioned is totally a thing. I was at a company implementing AML for the first time, and the compliance team told us to add it, which I always thought was an inane. They came up with a variety of rules with just arbitrary figures in them, including the 10k rule. Didn't matter if you had previously been transacting 7k regularly before jumping to 10k, didn't take overall volume into accou…

These days, AML algos look at cash transactions in a sliding window fashion: $2k ATM deposit on Jan 1, 2022; $3k cash deposit on Jan 21, 2022; $3k cash deposit on Feb. 28, 2022; $3k cash deposit on March 18, 2022. Boom, in the span of 3 months, $11k cash deposits, back office (not tellers) can file a SAR.

Sort of. If these are normal transactions given the customer's trade, no report is made. SARs are only filed if you are suspicious (that's what the S stands for) that a crime has occurred. This is where knowing your customer comes into play.

CTRs, on the other hand, have a limit of $10,000, and while it is aggregate, it's aggregated over a single business day. CTRs do not require suspicion. They are routinely filed for ordinary, legal transactions.

Re: Money Laundering and AML Compliance

#173

Post by Ntrails »

datavirtue wrote: post #100
lotsofpulp wrote: post #62

Earlier quoted context omitted.

> The best example: if you want to get a mortgage to buy a house you have submit to a financial strip search. But if you want to buy a house with bags of cash, you don’t even need to give your name. What is this an example of? You are submitting a financial strip search because the lender wants to ensure the borrower can pay the debt, not to ensure they are a criminal or not. And that is because prior to 2008, lender…

Zero underwriting? You obviously do not know what you are talking about. I got a "no-doc" non-conforming FHA loan back then. They fucking strip searched me. It was not easy--I still have PTSD from it. That same loan is still available on the market. You also need a citation on your reason for the financial crisis of 2008. I had to walk away from my home BECAUSE of the financial crisis (after having paid down 90% of t…

Retail Banks were able to offer high risk loans with relatively low concern about the actual quality of the loan, due to the high demand for the repackaged assets. The repackaged assets used shenanigans to trick ratings agencies and make the lower quality loans look relatively secure. Thus secondary prices for the loans were high yada yada.

This is a general comment, nobody is saying every bank required zero documentation.

> I got a "no-doc" non-conforming FHA loan back then. They fucking strip searched me. It was not easy--I still have PTSD from it

I cannot imagine how bad some forms and id checks would have to be to give me PTSD.

> So STFU.

Not useful.

Re: Money Laundering and AML Compliance

#174

Post by pjkundert »

astrange wrote: post #165
pjkundert wrote: post #135

Earlier quoted context omitted.

Ah, I think I’m beginning to understand… Selling worthless copies of GIFs to people by claiming they’re totally gonna appreciate in value: Crypto Immutable, unforgeable and universally provable transmission of proof of ownership of real valuable consideration/property: Crypto Perhaps one of these is a scam, and the other is a valuable business transaction? Nah.

It can't be proof of ownership if it's all of those things because ownership is decided by eg judges and not what's written in a random database somewhere.

Contract law. If we agree that what is scrawled on a napkin is a contract, it is.

Re: Money Laundering and AML Compliance

#175

Post by question11 »

wpietri wrote: post #126
etherael wrote: post #121

Earlier quoted context omitted.

So crime was not at a manageable level prior to say 1970, when none of these AMLKYC laws existed? And crime has not been at a manageable level after say 2008 when crypto came into existence and made it impossible to actually enforce? Man, for that brief shining window we really had perfection.

Yes, actually, the American mafia has declined severely since its heyday. There are surely many reasons, as it's part of a broader decline in crime in recent decades, but the increased difficulty of cleaning dirty money is part of it. And crime has definitely gone up because of cryptocurrency. I'm not sure how much it has affected the more traditional sorts of crime, as I don't think it's much of a help in turning di…

Cryptocurrencies? Maybe for a few 100k

Real Estate provides a much easier method to move millions.

Re: Money Laundering and AML Compliance

#177

Post by buildbuildbuild »

diognesofsinope wrote: post #168
JusticeJuice wrote: post #67

Excellent essay. The 10k rule mentioned is totally a thing. I was at a company implementing AML for the first time, and the compliance team told us to add it, which I always thought was an inane. They came up with a variety of rules with just arbitrary figures in them, including the 10k rule. Didn't matter if you had previously been transacting 7k regularly before jumping to 10k, didn't take overall volume into accou…

The article is leaving out the fact that the $10k threshold is not at the discretion of the bank. It comes directly from the Bank Secrecy Act ( https://en.wikipedia.org/wiki/Bank_Secrecy_Act ). The magic number is not the bank's magic number, it's politician's magic number.

It’s also a number that inflation makes convenient for warrantless intelligence gathering.

Re: Money Laundering and AML Compliance

#178

Post by wpietri »

t0suj4 wrote: post #152
wpietri wrote: post #126

Earlier quoted context omitted.

Yes, actually, the American mafia has declined severely since its heyday. There are surely many reasons, as it's part of a broader decline in crime in recent decades, but the increased difficulty of cleaning dirty money is part of it. And crime has definitely gone up because of cryptocurrency. I'm not sure how much it has affected the more traditional sorts of crime, as I don't think it's much of a help in turning di…

The Mafia just bought politicians and now operate their rackets according to law. Can't commit something illegal when it's explicitly legal.

I look forward to your evidence of this. But things like robbery, selling stolen goods, protection rackets, extortion, prostitution, and drugs are still all generally illegal.

Things like alcohol and marijuana have become legal, but I don't see much evidence that Budwiser/InBev is a mob front.

Re: Money Laundering and AML Compliance

#179

Post by dsfyu404ed »

pyuser583 wrote: post #123
wpietri wrote: post #95

Earlier quoted context omitted.

If you want to deposit that same cash in a bank, it's going to raise questions. Real estate is a bit of an exception here. For reasons explained in the article.

An innocent buyer would just say “I sold my home of 20 years to some company - Perwinkle LLC of Bermuda. Pretty strange, but not my problem.” The bank would report it, and in theory the feds could track down Periwinkle LLC. But tracking down holding companies consumes precious resources, and would be strategic, not just legal, decision. The US is obsessed with having a clean financial sector, but doesn’t care one jot…

>But tracking down holding companies consumes precious resources, and would be strategic, not just legal, decision.

And 9x/10 when you track down Perwinkle LLC you'll find that it's owned by a couple American brothers who own a successful regional HVAC business and everything they are doing is legal.

People love to act as if all this offshore stuff is frequently closely connected to illegal things but if you just randomly pull samples you'll be hard pressed to find anything that isn't just a case of someone completely legally doing what the law incentivizes. If there was actually anywhere near as high a crime to not-crime ratio as people imply every bureaucrat with political ambitions would be all over it.

Re: Money Laundering and AML Compliance

#180

Post by wpietri »

novok wrote: post #147
wpietri wrote: post #126

Earlier quoted context omitted.

Yes, actually, the American mafia has declined severely since its heyday. There are surely many reasons, as it's part of a broader decline in crime in recent decades, but the increased difficulty of cleaning dirty money is part of it. And crime has definitely gone up because of cryptocurrency. I'm not sure how much it has affected the more traditional sorts of crime, as I don't think it's much of a help in turning di…

AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring. And it enables a vast financial surveillance system and a huge industry of AML analysts doing pointless busy work writing SARs nobody cares about. The US mafia declined because of the rico act and the fact that there was less racism and better integratio…

> AML regulations prevent about %0.05 of criminal proceeds from being 'harvested' and the cost of these compliance regimes costs vastly more than the value they bring.

I look forward to your proving these two very numerical claims. But you can't just count existing criminal proceeds. That'd be saying, "The current level of speeding is so low that we can get rid of traffic cops." You have to measure the crime prevented, too.

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