Dennis Lormel
- Internationally recognized expert on Terrorist Financing with client banks ranging from small (Regions Bank, Ally Bank) to multi-national (J.P. Morgan Chase, Bank of America, Goldman Sachs, Merrill Lynch)
- As the FBI's Chief of Terrorist Financing Operations Section, conceived of and directed the initiative that identified the funding of the 9/11 attacks
- Provides topical insights to Congressional committees and to media outlets including: The Wall Street Journal, CNBC, and CBS
- Expertise in delivering investigative intelligence, risk advisory consultations, litigation support services, compliance risk and assessment, and educational seminars and training
- All 7 Best Practices
- Pre-Meeting Discovery Process
- One-on-One Call with Expert
- Meeting Summary Report
- Post-Meeting Engagement
Counter-Terrorist Financing - Compliance Program
Key Trends
- There have been several recent high-profile cases of bank failings related to Anti-Money Laundering requirements.
British-based HSBC, one of the world's largest banks, agreed to a record $1.92 billion settlement with authorities for its role in money-laundering of Iranian assets and Mexican drug cartels. Helm Bank USA of Miami saw significant drops in its deposits and earnings after it received a regulatory order criticizing its compliance with AML standards and the Bank Secrecy Act. These are but two recent examples.
Many industry experts expect regulators to be more aggressive and demanding in examinations for at least the near term. Dissatisfaction among judges, Congress, and the public with Deferred Prosecution Agreements (DPAs) makes it likely there will be fewer DPAs and more criminal charges brought against institutions and individuals.
- Bank regulators also are being scrutinized more and forced into a more aggressive posture.
The Office of the Comptroller of the Currency (OCC) has been taken to task in Congressional hearings for being too lax in oversight and passive in regulatory posture. The result has led to more aggressive regulators across the board.
Due diligence and periodic reviews have become more demanding. As a result, banks need to be proactive in preparing for review and keeping their AML compliance programs and procedures ahead of the regulators.
- Suspicious Activity Reports (SARs), while a critical component of AML, remain a highly subjective tool.
Too often, SARs are interpreted in different ways by different stakeholders. For instance, law enforcement views a SAR's use and data points differently than a bank compliance officer. And what constitutes a "complete" SAR is the subject of wide debate.
Understanding perspectives is extremely important. For example, the “why” is most important to law enforcement; it wants to know “why” an activity is suspicious. For bank compliance officers, the “how” is most important; they want to know “how” their banks were used in furtherance of illicit activity.
Bridging these differences requires proper training for all users of SARs and an effective liaison between all parties involved – banks, law enforcement, consultants and regulators.
- Standard due-diligence procedures are no longer enough to meet Know Your Customer needs; Enhanced Due Diligence is now widely used as best practice.
Effective and consistent customer due diligence is essential to successful AML compliance programs. Enhanced Due Diligence requires a much deeper-dive into a customer's profile, past dealings, purchase and other behavioral patterns, business dealings and other relevant trends.
- Bank liability risks are expanding because of potential investigation costs and legal exposure in cases of mismanagement, fraud or failure to prove adequate oversight.
Civil claims against banks have increased after well-documented financial crises. One recent example is TD Bank. They were involved in lawsuits and financial settlements related to its involvement and role in covering up a $1.2 billion dollar Ponzi scheme executed by Scott Rothstein. Some of these actions will be ongoing for a long period of time.
These actions, and similar ones, represent real hits to the bottom line. They also demonstrate the growing trend of victims grouping together and filing lawsuits against banks for failing to identify frauds or for not identifying them in a more timely manner.