We all know that everyone loves stories, case studies and real life dramas in training. Likewise, we all know that the big ones – Abacha, HSBC, Madoff – are good for several slides, lots of detail and some amusing photos. But this sometimes means that we overlook the smaller stories, the simple tales of everyday launderers working in our own communities – and that’s a shame because it is often these stories that resonate most with your staff, because they feature people just like their friends and neighbours.
Take this one, for instance – a headline story in the Bradford Telegraph & Argus earlier this week (what do you mean, you let your subscription lapse?). Peter Rawson, a self-employed window-cleaner, has been sent to prison for three years for exhibiting what the judge described as “classic money laundering behaviour” – over five years, £198,000 was paid into Rawson’s bank account, but only some of it could be linked to his window-cleaning business. The rest, the judge decided, “was probably proceeds of your own criminality, whether it was tax evasion or something more sinister, but some of it must have belonged to other people”. Some of the money, we learn, was transferred to Thailand and brought back in carrier bags. Now this, I submit, has all the hallmarks of an excellent training case. It raises lots of due diligence questions: did his bank ask how Rawson was making so much money, and did they check why he was making transfers to Thailand? It is a simple story to follow, with all elements easy to understand: we can all picture window-cleaners, carrier bags of money, trips to Thailand and stashes of drugs. And it allows you to use your full range of George Formby jokes. So when you’re looking for memorable examples for your training, don’t overlook the local; after all, you’d be surprised at things they do… (you see – I got another one in there right at the end).
I’m not an early adopter. I still watch “Poldark” (the original series) on videotape. I do not have a smartphone or anything beginning with an i, and I drive a 26-year old car. And so I was always going to be late to the Twitter party. Indeed, I wouldn’t have bothered putting on my glad-rags and going at all, except that I am self-publishing my first novel next month and everyone in the fiction self-publishing world says that tweeting is essential. So I’m giving it a go.
I had a brief flirtation with the pointless babble updates I used to mock; my very first tweet (which happened to be true but was still inane) was this: “Overheard today in local sports shop: We can tell your mum we bought a new cricket bat, but we can’t tell her it cost £110.” And then I realised that I couldn’t drum up any enthusiasm for continuing with that caper, and moreover I couldn’t see how this would help me attract readers for a book on financial crime in 1824. So I had an epiphany and have decided to use Twitter simply to complement my other AML/financial crime activities: if I come across an interesting snippet of AML/financial crime news, I shall retweet it (get me with the lingo). So if you’re at all twittery yourself, you can now get even more me, @susangrossey. (Is that how you give your Twitter-ness? Those of you who know, will know.)
I’ll admit up front that I didn’t think of this post all by myself – but then that’s the beauty of t’Interweb. I keep a list of possible blog topics, including “money-saving tips for the MLRO”. And then today an update drops into my inbox saying that a very helpful chap called Joe Murphy, who works as the Director of Public Policy at the Society of Corporate Compliance and Ethics in America, has published a marvellous little pamphlet called “A Compliance & Ethics Program on a Dollar a Day: How Small Companies Can Have Effective Programs“, and I commend it to you.
[Incidental aside: the word "pamphlet" makes me shudder. I have a friend who can't bear the word "gusset". Do you have words that you loathe?]
Mr Murphy’s pamphlet oversells itself a bit, rather like those guidebooks of old; sure, you could see Europe on a dollar a day, as long as you didn’t want to sleep indoors, or eat. Most of the compliance and ethics suggestions given in the pamphlet do indeed cost nothing in actual hard cash, but most of them have a time cost associated with them. That said, I think that the pamphlet [I'm writing the word pamphlet a lot, to desensitise myself - it's not working - aaaargh!] is in itself a great time-saver (and therefore money-saver) as it is in essence a very handy and succinct list of reminders.
So how can the frugal MLRO keep his AML costs to a minimum? My three top tips:
- Share information and experience with other MLROs – I know from my own experience that the more generous you are with your own information, the more people are willing to share theirs with you.
- Keep an MLRO diary, detailing when you are going to deliver training, submit reports to the Board, attend updates for your own education, review your procedures, etc. This saves panic, and duplication of effort.
- Subscribe to as many free newsletters and alerts as you can, and then cull the ones that don’t deliver the goods. Even if the alert sends you only a headline and wants to charge you for the full story, you can at least make an informed decision.
And of course the money you save can then be spent on essentials, such as face-to-face training for key staff, and Jaffa Cakes for the compliance team.
Posted in AML, Money laundering
Tagged PEP, legislation, due diligence, money laundering, financial crime, training, proceeds of crime, communication, AML, research, white collar crime, non-executive directors
Earlier this week I was running a workshop for people who are responsible for AML training within their firms, and we had a familiar debate: face-to-face or CBT? (There are other options, but those are the two main ones: you either train your staff with a person or with a computer.) I make my living from face-to-face training, so naturally I am going to sing the praises of that particular option, but in an ideal world, I think most people would agree with me that the very best way to teach someone about AML – or indeed about anything – is to have a human being explain it to them in person. But we do not live in an ideal world: we live in a world where people are too busy to take time off work for training, and where companies cannot afford to pay for face-to-face training for everyone, or arrange the logistics in order to have hundreds of staff away from their desks. I do understand all of that, honestly I do – and I can see that CBT is a good second-best for such situations. But it is second-best.
And what worries me most about it is that, because of the large numbers of staff concerned, it is generally the only logical option for our biggest firms – our mega-banks, our Big Four accountancy firms, our Magic Circle law firms. And because we are all reasonable people, we say, well, that’s all they can do; we can’t really expect Barclays, for instance, with its 150,000 staff worldwide, to given them all face-to-face AML training. But just think about it: which organisations are most frequently targeted by criminals looking to launder their money? The mega-banks, the Big Four, the Magic Circle. It’s not much of a risk-based approach, is it – accepting that the staff of the most at-risk firms will not receive the very best training on offer? If such firms can get away with saying that they have too many staff to train them to the highest standard, how long before they start claiming that their high volume of customers and transactions means that they surely can’t be expected to do the same level of due diligence as their smaller competitors?
As a teenager living in a posh bit of Surrey, my husband moved in a very showbizzy set, and once went on a couple of dates with Melanie Thaw (daughter of actor John). Despite this, I do still permit him to watch “Morse” re-runs, and indeed the sequel “Lewis” and now the prequel “Endeavour”. I like a cerebral murder as much as the next woman – show me a don skewered on a ceremonial sword from ancient Mesopotamia and I’m hooked – but I particularly enjoyed the most recent episode of “Endeavour”, which is here on iPlayer for the next month.
“Home” reveals the stunning fact that there is life outside Oxford and its bucolic surrounding villages. Morse himself travels north to Lincolnshire to visit his sick father, and then down to London to inspect the mews flat of a dead don (there’s always a dead don – who knew the academic life was so lethal?). But more astonishingly, London comes to Oxford – in the form of an East End villain trying (as explained by the fabulous DI Fred Thursday) to keep breathing. Of course, said villain cannot simply buy a cottage by the Cherwell and retire peacefully; no, he and his menacing son take over a nightclub and start, well, menacing everyone. And bribing them too. I don’t want to give too much away, as it’s a corker of an episode, but as we come to terms with the Bribery Act here in 2013, it is a salutary reminder that dodgy deals have been around since deals began – after all, those ancient ceremonial swords don’t come cheap.
Posted in Bribery and corruption, Money laundering, Organised crime
Tagged bribery, corruption, financial crime, government, money laundering, organised crime, proceeds of crime, tax evasion, white collar crime
There I was on Thursday morning, my whole day carefully planned ahead of me (including two McVitie’s dark chocolate digestives at elevenses – something to aim for), when wham! I opened a news feed and there, nestled unobtrusively in its lower reaches, was this: “Isle of Man revised AML legislation comes into force on 1 May 2013″. Eh? That’s yesterday, I thought – well, the day before yesterday now – and Nobody Told Me.
The thing is, I rather pride myself on keeping on top of things AML-wise. Other things can go to pot – I’ve several “to do” lists that are older than most people’s children – but AML, well, I tend to prioritise that. And if my own research isn’t keeping up, I’m blessed to have friends in all of “my” jurisdictions who kindly uncover and send on to me any titbits and hot gossip that I may have missed – such friends are one of the joys of my rather solitary life. But on this occasion – nada, zip, zilch, not a sausage or a whisper. I had absolutely no inkling that the Isle of Man was consolidating its two Codes into one all-purpose Code. For those of you who are likewise concerned that you have been caught napping, here you go.
Thankfully I have now discovered and subscribed to the Isle of Man FSC’s RSS feed, so they won’t be able to sneak up on me again. But, obsessed as I am with accuracy and currency in these matters, it meant that I spent most of yesterday not on the previously planned work, but on updating both the Isle of Man edition of my NEDs book (otherwise known as “the pig in shades”) and the training that I am delivering to an Isle of Man client on Tuesday. But you’ll be relieved to know that I did still get my biscuits; it’s only revised legislation, after all, not a new world order.
Posted in Legislation, Money laundering
Tagged legislation, due diligence, money laundering, financial crime, government, proceeds of crime, AML, writing, non-executive directors, Isle of Man, terrorist financing
Perhaps unsurprisingly, working in an anti-crime business means that we do have to delve into some of the nastier recesses of human activity – and organ trafficking is one of the nastiest of all. I have been including it in training for about the past year, on the basis that the more angry people are at the activities of criminals, and the more revolted they are by the thought that they themselves might unwittingly facilitate such activities by allowing the proceeds to move through the financial system, the more rigorous they will be in applying the AML controls.
When people talk of Frankenstein, they usually mean the creature – but Frankenstein was in fact the scientist who pieced together the monster from various bits. A modern group of such doctors has recently been found guilty of human trafficking and organised crime, through running the Medicus Clinic in Kosovo’s capital Pristina. In short, doctors at the clinic recruited poor people from across eastern Europe and central Asia by promising them €15,000 euro for one of their kidneys. Organ recipients, mainly from Israel, paid up to €100,000 euro to receive a transplant – resulting in a tidy profit for the clinic. The trade was uncovered when a Turkish organ donor was stopped by officers at Pristina airport, in visible pain after having one of his kidneys removed at the clinic.
Distasteful though the Medicus Clinic story is, however, do bear in mind that this is the most palatable end of the organ trade, in that the donors – albeit while miserably desperate for money – did volunteer to sell their organs. Many “donors” are not so lucky. And unless you are reasonably sure of where your clients’ money has come from, you have no choice but to entertain the possibility that it has come from any crime imaginable – including the trade in human organs.
After the enormous disappointment of “My Big Fat Gypsy Fortune” on Channel 4 a couple of weeks ago, I am hoping that “proper” telly can do better this week. Tonight, at 8.30pm on BBC1, we have an episode of “Panorama” called “The Russians Are Coming“. In it, investigative reporter Darragh MacIntyre lifts the lid on Russian organised crime as it spreads to the UK. He investigates a death in a Russian prison and a whistleblower found dead on a street in Surrey, revealing where these victims fit into the crime-war jigsaw. And then on BBC2 at 9pm on Wednesday [an earlier draft of this post said Tuesday - thanks to Jason in Guernsey for pointing this out], in the series “This World”, there is an episode looking at “The Mafia’s Secret Bunkers“. In this, Mafia historian John Dickie (surely a job that should come with danger money) visits Calabria, in the tip of the toe of the Italian boot, to tell the story of Italy’s most powerful crime network- the Calabrian mafia, or ’Ndrangheta. Born out of prison gangs in the 1880s, the ’Ndrangheta is now Europe’s biggest cocaine trafficker. In this programme, we are promised that we will see inside the bunkers that members of the clan use as hide-outs. But what about the spiders? Size of dinner plates, I shouldn’t wonder.
As always, I will be watching with ears pricked for the phrase “money laundering”. I heard someone use it in the departure lounge at Guernsey airport last Friday, and it was all I could do to stop myself decamping to the seat next to him. Mind you, I did wander past as often as I could without looking suspicious – he probably just thinks I’m a timid flyer with a nervous bladder.
As you may have guessed, I’m quite keen on writing – and in particular on writing about financial crime. We’ve had articles, and training materials, and policies ‘n’ procedures, and books, and of course this blog. All that has been missing is a novel. Until now, that is. Well, until 19 July 2013, to be precise – for on that day I will be publishing my first lengthy work of fiction, and you will hardly fall off your chair when you hear that it is all about financial naughtiness.
Publication has hardly been a snap decision, as I have been working on this book in one form or another for four years. (I know, I know – you’d think I’d be quicker at this writing lark by now.) In my defence, I’ve had to squeeze it in between other projects, and it turns out that making up stories is actually rather hard. But I have finally run out of excuses, and “Fatal Forgery” (for that is its name) is heading down the home straight towards publication. It is the story of a banker gone bad, set in the Regency period (1811 to 1820 – that’s the years, not the early evening), with a prototype financial investigator, Constable Samuel Plank, as our hero. ”Fatal Forgery” will be appearing both as a print-on-demand paperback and as an e-book, and with a publication date of 19 July, should catch you just as you stock up on poolside reading for your summer hols.
I don’t want to clog up this serious, professional blog (whaddya mean, I’m not usually serious and professional?) with breathless updates on my progress, but for those who are interested in the minutiae of Plank’s path to publication I have created another website/blog: www.susangrossey.wordpress.com. Otherwise, that’s it for Plank-promotion as far as this website is concerned – although I am sure I won’t be able to resist a quick crow on publication day. Meanwhile, please keep your fingers crossed that I manage to bring my hogs to a fine market [Regency slang for embarking on a successful commercial endeavour].
Since writing my post on Monday about the importance of why, I have been thinking a great deal about records – and, more specifically, file notes. These are the bits that explain, that tell the story of why certain decisions were made, and what was discussed and suggested and decided. And we all know that they are the hardest bit to get staff to write. It’s a fairly simple task to design a take-on or monitoring form – a template that they have to follow, with boxes to tick and options to select and specified documents to seek out and attach. But say to them something woolly like, “Remember to update your file notes” – and they will generally decide that it’s just much easier not to.
So how to persuade them? Well, I think it’s always worth reminding them that if the wheels come off and there is a money laundering enquiry or investigation, the people doing the enquiring and investigating will not be members of your own firm, versed in its ways and party to its decision-making processes/foibles. Rather, they will be outsiders – regulator-flavoured outsiders, or FIU-flavoured ones, or police-flavoured ones. And as outsiders (and ones who have to maintain their objectivity), they will have to rely on the information before their eyes: they can believe only what they see written down. And if nothing is written down, they will draw their own inferences and conclusions, which may well not be to your advantage. As Christopher observes in Mark Haddon’s novel “The Curious Incident of the Dog in the Night-Time”, the odd thing is not what did happen, but what did not happen – the dog did not bark. Likewise, investigators may decide that the most disturbing thing of all is not what was written down, but what was not – so let’s encourage those account managers to bark.