Doug Cornelius on compliance for private equity real estate
The Financial Crimes Enforcement Network announced the issuance of revised Geographic Targeting Orders. The threshold for reporting has been reduced down to $300,000 for all-cash purchases of residential real estate. The geographic scope has been expanded to now include nine cities: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; … Read more »
The US Financial Crimes Enforcement Network has started to look closely at cash purchases of expensive real estate as a possible source of money laundering. In January, FinCEN issued two Geographic Targeting Orders, one for New York and one for Miami. Now more metropolitan areas are in FinCEN’s sights. According to the press release, FinCEN has been … Read more »
The Treasury’s Financial Crimes Enforcement Network has been toying with how to impose anti-money laundering standards on private funds and investment advisers for years. There is rumbling from the White House Office of Management and Budget that it approved proposed new regulation. A notice of rulemaking was dropped a few years ago. The thought then … Read more »
The U.S. Treasury Department’s Financial Crimes Enforcement Network has proposed revisions to its customer due diligence rules. Of course, the proposed rule would affect financial institutions that are currently subject to FinCEN’s customer identification program requirement: banks, brokers-dealers, and mutual funds. However, FinCEN suggested that it may be considering expanding these customer due diligence requirements … Read more »
The US Financial Crimes Enforcement Network has finally come around to realizing that US financial institutions should promote a culture of compliance. FinCEN does not point to any specific problem, but mere notes that “Shortcomings identified in recent Anti-Money Laundering enforcement actions confirm that the culture of an organization is critical to its compliance.” FinCEN’s … Read more »
Yesterday J.P. Morgan agreed to forfeit $1.7 billion for its failure related to the Bernie Madoff fraud, plus several hundred million in fines. As part its deferred prosecution agreement, the bank agreed that it did not have the proper systems in place to catch Madoff. It’s easy to target the bank for compliance failures but … Read more »
Over the years, the Financial Crimes Enforcement Network (FinCEN) has required banks, brokers, and other financial entities to officially report suspicious activities of its customers. Investment advisers and private fund managers have managed to sty outside the requirements. In large part, that’s because a fund’s custodial accounts are already subject to the self-policing. since the … Read more »
The Financial Crimes Enforcement Network released its full year 2011 update (.pdf) of mortgage loan fraud reported suspicious activity reports. It reveals a 31% increase in submission.It also shows some of the trends that lead to the 2008 financial crisis. Financial institutions submitted 92,028 MLF SARs in 2011, compared to 70,472 submitted in 2010. Financial … Read more »
Private Equity has been siting on the fringes of Anti-money laundering regulation for many years. It’s still illegal to be involved in money laundering and fund managers should be taking some steps to protect themselves and to identify problems. There’s just no set script. FinCEN is supposedly working on a new rule. In the meantime, … Read more »
James H. Freis, Jr., Director of the Financial Crimes Enforcement Network, let us know that his agency is working on anti-money laundering requirements for investment advisers. At a November 15, 2011 speech at the American Bankers Association/American Bar Association’s Money Laundering Enforcement Conference he highlighted many of the issues of money-laundering in the various financial … Read more »