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.