Anti-Money Laundering

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Anti-Money Laundering:

Anti-Money Laundering

Objective:

Objective This is an introductory course aimed to prime a basic awareness of “ money laundering ” for branch employees. 2011/8/21 2 BOTSA Compliance Department. By Mr. S. Yi.

Case Study:

Case Study The Berlin-Edwards Story This is a good case study on the problems that may arise if KYC policy is not properly followed. 2011/8/21 3 BOTSA Compliance Department. By Mr. S. Yi.

Customer Referral:

Customer Referral Lucy Edwards, a VP at BONY, introduced her husband, Peter Berlin, as a customer to the bank. Lucy failed to inform the bank that Peter was her husband and the bank never questioned the relationship between Lucy and Peter. 2011/8/21 4 BOTSA Compliance Department. By Mr. S. Yi.

Comment:

Comment If the KYC was followed, one of the initial questions as part of the customer acceptance policy should have been “ What is your relationship with Lucy Edwards? ” 2011/8/21 5 BOTSA Compliance Department. By Mr. S. Yi.

Accounts:

Accounts Over a 3-year period, Peter opened 3 accounts for 3 separate businesses. These 3 businesses did not engage in any business transactions. The only activity the accounts were used for was to receive fund transfers from Russian parties, and to forward funds to offshore accounts. 2011/8/21 6 BOTSA Compliance Department. By Mr. S. Yi.

Misuse:

Misuse These accounts were used by Berlin and his wife to help Russian banks, as well as other Russian customers to evade taxes and other government regulations. In one instance, one of these accounts received a total of $166m in one month, mostly through transfers from correspondent banks . 2011/8/21 7 BOTSA Compliance Department. By Mr. S. Yi.

Comment:

Comment The size of the money transfers, relative to the normal flows within the account, should have been an indication that due diligence is needed and a STR filed. Also, more stringent due diligence should have been applied since correspondent banks were involved. 2011/8/21 8 BOTSA Compliance Department. By Mr. S. Yi.

Indictment:

Indictment Over the 3 year period, the couple has moved an excess of US$7 billion through accounts globally. They were eventually charged with conspiracy to commit a number of U.S. crimes, including money laundering and illegal money transmission. 2011/8/21 BOTSA Compliance Department. By Mr. S. Yi. 9

Objective:

Objective 2011/8/21 10 BOTSA Compliance Department. By Mr. S. Yi.

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