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BSA Branch Compliance Officer Training 2015

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by

Will Tyson

on 17 March 2015

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Transcript of BSA Branch Compliance Officer Training 2015

CIP Program
Personal Acct. Customers
Currency Transaction Reporting (CTR)
Due Diligence
Account Due Diligence
BSA Branch Compliance Officer Training 2015
What is BSA?
4 Pillars create BSA
System of Internal Controls
Independent Testing (Audits)
BSA Officer
Training

Funds Transfers
Who is BSA for First South Bank?
BSA Officer - Sherry Correll

BSA Compliance Officer - Will Tyson

BSA Assistant Compliance Officer - Martha Williams
Purposed 5th Pillar

Customer Due Diligence
Business Acct. Customers
Full Birth Given Name (no initials or nicknames)
Date of Birth
Physical Address
Taxpayer ID#
Acceptable Photo ID (non-expired)
Legal Name of Business
Must provide supporting documents
New account desk must verify with Sec. of State website
Physical Address
Not home address but true location of business
Legal Documents
Acceptable Photo ID of all signers
Customer Due Diligence
Enhanced Due Diligence
Set up to help determine what type of account the customer will be utilizing and some general account usage
Enables the Bank to evaluate the risk potential a customer presents
Ensures that the Bank possesses sufficient customer information to implement an effective suspicious monitoring system
Determines the risk rating score of each customer
Know Your Customer
Customers who pose a higher risk of money laundering must have EDD performed to have a better understanding of the account activity
All currency transactions over $10,000
Currency Transaction Logs
All Loomis Transaction in or out
All CTRs filed
All Shipments of Cash to other branches or financial institutions
How to view CTRs in Vertex to verify branch log
Log into Vertex and enter (VTXCTR) in menu
Select option 30 (CTR Daily Report)
Under Status section select
Acknowledged
Submitted
Select your date range
Enter your branch code
Hit Submit to see report of branch CTRs
CTR Exemptions
Phase 1 Exemptions
Banks, Federal/State/Local Gov. Dept.
Entities on major national stock exchanges
Subsidiaries of companies listed on major national stock exchanges
Phase 2 Exemptions
Remaining eligible Non-listed businesses
Payroll Customers
Phase 2 Exemption Requirements
5 or more CTRs filed per year
2 month waiting period
<50% of gross revenue derived from ineligible activity
Must file a DOEP
Must conduct an annual review
Monetary Instruments Logs
All cash purchase of Official Checks and Travelers Checks in the amount of $3,000 to $10,000 must be documented
Reviewed Monthly and signed off by Compliance Officer
Travel Rule
Question all wires not made in person
Have a full understanding of the purpose of the wire
PUPID Wires not allowed
Travel Rule
Name and address of transmitter
Transmitters account number
date and amount of wire
identity of the recipients financial institution
As many or the following as possible:
Name and address of recipient
Account number
Any other specific identifier of recipient
Either the name, address, or the numerical identifier of the transmitter financial institution
Special Measures Section 311
Banca Privada d'Andorra
Banco Delta Asia
Burma**
Commercial Bank of Syria
Democratic People's Republic of Korea**
FBME Bank Ltd.
Halawi Exchange Co.
Islamic Republic of Iran**
JSC Credex Bank
Kassem Rmeiti & Co. For Exchange
Liberty Reserve S.A.
Lebanese Canadian Bank SAL
OFAC
Office of the US Treasury that enforces economic and trade sanctions based on US foreign policy and national security goals against targeted individuals and entities such as foreign countries, regimes, terrorists, international narcotics traffickers, and those engaged in certain activities such as proliferation of weapons of mass destruction or transnational organized crime.
Suspicious Activity Monitoring
Money Laundering
Structuring
Check Kiting
Online Intrusion
Elder Financial Abuse
Human Trafficking
Virtual Currency
Privately Owned ATMs
MSBs
Tax Fraud
Health Care Fraud
Money Laundering
Placement
placing unlawful cash proceeds into banks through wires, deposits, etc.

Layering
separating proceeds of criminal activity from origin through complex transaction


Integration
using an otherwise legitimate transaction to disguise illicit proceeds
Structuring
An attempt by a customer to avoid a CTR being filed
Most common practice is to deposit or withdraw just under $10,000 in cash and in even dollar amounts
Is an offense that can be punishable by jail time, surrendering of funds, and restitution during jail time
Check Kiting
Form of check fraud, involving taking advantage of the float time to make used of non-existent funds in a checking/savings account.
Usually done in even dollar amounts
Usually done on an everyday basis
Tellers will notice checks usually made payable from oneself to themselves.
Online Intrusion
The act of hacking into an online account in performing activities not authorized by the online bank account customer.
7 instances of online intrusion at FSBK since January 2014
No funds lost
Elder Financial Abuse
Common Fraud Schemes
Lottery and Sweepstakes Companies
Grandma/Grandpa "It's Me"
Identity Theft Insurance
Government Grants
Recovered Assets
Medicare Discount Drug Cards
Phony Bank Security
"Collect Call from Prize Patrol"
Phony Government Official
Phony Customs Officer
Phony IRS Officer
"Your Telephone/Power/Gas Service will be disconnected"
Death Threats
Overseas Money Transfers (Nigerian)
Relative Overseas/Passed Away
Secret Shopper
Sweetheart Scams
Work at Home
Human Trafficking
Red Flags for HT
Multiple Wires just under $3,000 reporting limit to various locations near border
Large cash deposits and wires to unknown individuals in border states or counties with ties to HT
Ongoing ATM transactions near border between 10pm and 6am
Structuring of cash with person who normally doesn't deposit cash
Unusual cash deposits followed by wires to known countries with high migrant populations (Mexico, Guatemala, El Salvador, and Honduras)
Virtual Currency
Advantage
Disadvantage
Cheap
Pay Instantly
Privacy for Users
Payments can't be reversed
Each Transaction is traceable
Can't be spent in more than one place at same time
Criminal Activity
Anonymity
No legal protection (FDIC)
Value not stable
Digital wallets hacked
Privately Owned ATMs
Found in convenience stores, bars, restaurants, grocery stores, or check cashing businesses
Due Diligence must be performed to understand who owns the ATM and who provides maintenance and cash.
MSBs
Any and all MSB customer must be approved by BSA Compliance Officer before and account may be funded.
Requirements for MSB Accounts
Signed and completed checklist and questionnaire
Copy of completed FinCEN form 107 (registration)
Acknowledgment from FinCEN showing registration
Most current tax return
BSA/AML Policy
Tax Fraud
Common Schemes
ACH Tax Return into "friends account"
Abusive Tax Preparer
Telephone Scam pretending to be IRS Agent
Phishing
"Free Money" or Inflated Refunds
Hiding Income Offshore
Impersonation of Charitable Organization
Misuse of Trust Accounts
Health Care Fraud
In 2014 Medicare took 14% or total US gov budget

2013 Medicare had almost $50 billion in fraud
Warning Signs for bank accounts:

Revenues for business do not match what type of business they state they are
Volume of revenue is much higher than other business with same style of business
Geographic transactions to not make sense for area covered by business
Large Personal expenses on business account
Large transfers to personal accounts
Structured Cash deposits and withdrawals
Large outflows for services
Business/Account name changes
Non-Resident Aliens
Resident Alien
Has been present in the US for at least 31 days in the current calendar and present 183 days or more based on counting: all days present during the current year, plus one-third of the days present in the preceding year, plus on-sixth of the days present in the second preceding year.
Non-Resident Alien
Is not a lawful permanent resident of the US during the calendar year and who does not meet the substantial presence test, or has not been issued an alien registration receipt card (green card).
W-8BEN Status

W-8's are not required to return form to IRS but must be maintained by Bank.
Must obtain multiple forms of ID
Requires BSA Compliance Officer approval
Cash Intensive Businesses
Convenience Stores
Restaurants
Retail Stores
Liquor Stores
Cigarette distributors
Privately Owned ATM customers
Vending Machine Operators
Grocery Stores
Full transcript