A client recently asked me to include in their training for front-office staff a comforting reminder about SARs. Comforting? Well, they wanted their staff to know that the subject of a SAR will never know who dobbed them in, and that consequently the staff did not need to be afraid of making a SAR. Moreover, they wanted to remind their staff that you should not allow yourself to be bullied by clients into not asking – or pursuing – due diligence questions, or into accepting sub-standard documents, or indeed to be bullied by colleagues into making or not making a SAR. I was very happy to do this, of course, and I hope that I have managed to give those staff the reassurance and encouragement they need to fulfil their contractual and legal obligations to undertake due diligence and to report suspicions.
But now I am thinking more about the vulnerability of staff – perhaps in particular the more junior, less experienced, less worldly-wise ones – who work under the AML regime. I know that customers can sometimes cut up a bit chippy when you ask for documents (“I’ve been a customer of this bank for years – how dare you….” and so on), but perhaps it sometimes goes further than that, and we need to make sure that staff are aware that they can be a target (and that they know where to go for help if it happens).
Just recently Larry Fuentes of Oregon was sent to prison for nearly six years for money laundering the proceeds of his drug trafficking. He used his girlfriend Janelle Fuston to help him launder the US$120,000: “Fuston, an employee with First Tech Federal Credit Union, would take the money from Fuentes and deposit it into multiple accounts under her name.” Fuston pleaded guilty to money laundering and was sentenced to five years of probation and 200 hours of community service. She was also fired from her job at First Tech, and her plea agreement provides that she is prohibited from working in the financial industry for ten years. So life is a bit tough for Janelle now. Reading around the story, it turns out that Fuston became involved only because of Fuentes’s “demands and influence”, and that he continued harassing her after they had been charged and were no longer an item, trying to persuade her not to co-operate with the authorities. I have always said that someone on the inside of a financial institution is worth their weight in gold to a money launderer, and we need to make sure that staff are aware that they might be seduced by someone who is interested not in their sparkling personality but in their day job.
I hate money laundering 
Dear Susan
While I agree with most of your article, I think we need to bear in mind that staff involved in making SARs may be more vulnerable than we think. The financial services industry was relieved when HSBC won the Shah case, but the bank was much closer to losing that case than many realise. As it is, the MLRO was grilled by the courts and his name and details are now well known to Mr Shah and his colleagues – not a comfortable situation to be in. Meticulous record keeping and thorough monitoring are key to staff safety, but may not be sufficient to protect people in future cases.
Dear David
This is an excellent point – thank you. Yes, HSBC was something of a shot across the bows – and generally to be welcomed for the clarifications it provided of various provisions/requirements of the reporting regime. And you’re right: we need to keep an eye on things, to make sure that reporting staff are not let down by poor record-keeping and monitoring.
Best wishes from Susan
I agree that young staff is the most vulnerable. They have no life experience and are so easily influenced. Because older people know better… I am reading Dr Phil’s Life Strategies again. He writes: “No matter how smart you are, no expects you to start speaking Russian until somebody taught you how to do it. … The problem is when it comes to succeeding in the game of life, nobody ever really taught you the rules, let alone how to play the game.” – And I believe this is how it all starts: lack of preparation for society. And once you are on the wrong path, it’s not easy to get off again. I feel sorry for Janelle, because she has been taken advantage off. If she had been better prepared, had been taught the right skills, it might have ended differently. That is why I am a firm believer of teaching young people, even school age kids, about financial crime, and any other crime. And the consequences they have long term.
Dear Claire
You are absolutely right. I think that financial crime is often glamourised in the media (at the cinema at the moment we have “The Wolf of Wall Street”, for instance), with much made of the material gains and little made of the attendant misery.
Best wishes from Susan
Reblogged this on Citizens, not serfs and commented:
Is this one of the reasons gang stalkers infiltrate banks?
Indeed: organised criminals know the value of having someone on the inside, and will often plant people in banks (and other regulated institutions), or, alternatively, corrupt/threaten existing staff. The best defence in the first instance is to have robust recruitment checks, and in the second, to ensure that staff can always talk to someone if they are being targeted. And in both situations, keeping an avuncular eye on all staff – looking for signs of stress and change of circumstances – is an excellent idea.
Best wishes from Susan
Much helpful information on your blog and also good advice. It seems everywhere in the West is being overwhelmed by a flood of corruption and law enforcement on all levels who should be in the forefront of the struggle are lagging behind leaving organisations/ businesses and private individuals to take up the slack. An unequal struggle made worse where the support of the law cannot always be relied on.