We previously blogged on the lawsuit filed by the National Small Business Association (“NSBA”) and one of its individual members, which sought to challenge the constitutionality of the Corporate Transparency Act (“CTA”). Most recently, we analyzed the March 1 decision in that case by the Northern District of Alabama court, finding the CTA to be unconstitutional and enjoining the United States government from enforcing it against the plaintiffs. The government sought an appeal before the Eleventh Circuit, and last Monday the Treasury Department filed its appellate brief. Before the District Co ..read more

The Financial Crimes Enforcement Network (“FinCEN”) has issued a Notice on the Use of Counterfeit U.S. Passport Cards to Perpetrate Identity Theft and Fraud Schemes at Financial Institutions (“Notice”), asking financial institutions (“FIs”) to be vigilant in identifying suspicious activity relating to the use of counterfeit U.S. passport cards.  According to the Notice, the U.S. Department of State’s Diplomatic Security Service (“DSS”) has determined that there is a growing use of such counterfeit cards to gain access to victim accounts at FIs.  “This fraud occurs in person at [FIs ..read more

In February 2024, the Federal Deposit Insurance Corporation (FDIC) entered into consent orders (here and here) with two banks who partner with fintechs to offer “banking as a service” (BaaS) related to safety and soundness concerns relating to compliance with the Bank Secrecy Act (BSA), compliance with applicable laws, and third-party oversight.  BaaS refers to arrangements in which banks integrate their banking products and services into the services of non-bank third-party distributors and the distributors deliver the integrated banking services directly to the customer.  A common ..read more

The Financial Action Task Force (“FATF”) has re-rated the U.S. as “largely compliant” with FATF’s Recommendation 24, which pertains to transparency related to beneficial ownership of legal persons.  Specifically, FATF released its seventh Enhanced Follow-Up Report (the “Report”) indicating that the improved re-rating was due, in part, to the implementation of the Corporate Transparency Act (“CTA”) as well as the Customer Due Diligence (“CDD”) Rule, which requires covered financial institutions to obtain beneficial ownership information (“BOI”) from designated entity customers opening up ..read more

We are very pleased to be presenting on both Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance and the Corporate Transparency Act (CTA), in partnership with the Practicing Law Institute.  First, on April 8 at 1 p.m., Siana Danch will discuss issues involving the CTA during a live one-hour briefing with Sara C. Lenet of Hogan Lovells.  The briefing will dig into the following: The context and stated purpose for the new Beneficial Ownership Information (BOI) reporting requirements; How to determine whether an entity is a “reporting company;” Timing requirements for initial ..read more

Last week, the United States Attorney’s Office for the Southern District of New York unsealed an indictment against global cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, for allegedly conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act (“BSA”) by willfully failing to maintain an adequate anti-money laundering (“AML”) program.  KuCoin also was charged with operating an unlicensed money transmitting business and a substantive violation of the BSA. Further, the Commodity Futures Trading Commission (the ..read more

On March 28, 2024, the Financial Crimes Enforcement Network (FinCEN), in consultation with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Board of Governors of the Federal Reserve System, issued a request for information (RFI). The RFI seeks information and comment regarding the Customer Identification Program (CIP) Rule requirement that banks collect a full Social Security number (SSN) prior to account opening from a customer who is an individual and a U.S. person (SSN collection requirement). S ..read more

Today we are very pleased to welcome guest blogger Lili Infante, who is the CEO of CAT Labs – a tech company building digital asset recovery and quantum-resistant cryptography tools to fight crypto crime.  Lili previously spent a decade as a DEA Special Agent with the U.S. Department of Justice and pioneered an early federal task force focusing exclusively on crypto and dark web crimes. Lili has led numerous major crypto-related investigations to include the takedown of Hydra – the largest crypto-powered dark web criminal organization and money laundering platform in the world. We reache ..read more

It is challenging for law enforcement to track down and trace illicit activities conducted through digital currencies. The process can be very time- and resource-intensive.  Further, securing charges and arrests, and subsequent convictions, often requires the strong support of traditional sources of evidence, such as fact witness testimony and electronic communications.  Nonetheless, blockchain analytics is a key component of the government’s ability to pursue such cases. On March 12, a jury in the United States District Court for the District of Columbia found Roman Sterlingov guil ..read more

With Guest Speaker IRS Criminal Investigation Special Agent Jonathan Schnatz We are very fortunate to have Special Agent Jonathan Schnatz as our guest speaker in this podcast on international efforts to investigate tax evasion and money laundering, and how they relate to criminal investigations and civil audits of U.S. businesses and individuals. Special Agent Schnatz is a Senior Analyst with IRS Criminal Investigation (“IRS CI”) where he chairs the Professional Enabler Group as part of the Joint Chiefs of Global Tax Enforcement (J5), an international law enforcement and financial investigati ..read more