In recent AML training I have found myself talking more and more about the “CDD jigsaw”. As with all jigsaws, the CDD version involves gathering lots of little bits of information – some of which might seem indecipherable or unrelated – and assembling them into a recognisable picture. It has been on my mind partly because I have been working with casinos, and several penalties levied by the Gambling Commission (the AML supervisory body for the UK’s gambling sector) this year have pinpointed the absence of the assembly stage of the CDD jigsaw.
For instance, in the Regulatory Settlement that they published in February 2018 concerning William Hill, the GC found that: “A customer was allowed to deposit £654,000 over nine months without source of funds checks being carried out. The customer lived in rented accommodation and was employed within the accounts department of a business earning around £30,000 per annum.” In other words, William Hill staff were aware of their customer’s housing situation and of his salary and of his level of gambling, but did not assemble these pieces into a picture that would have shown a mismatch.
An unnamed bank in California must be reaching the same conclusion right about now. Among its customers were two nuns, Sister Mary Kreuper and Sister Lana Chang – respectively principal and teacher at St James’ Catholic School in the city of Torrance, near Los Angeles. Into their account they paid cheques made out to their school for tuition and other fees. Over a decade, they siphoned off about half a million dollars and – I kid you not – used it to gamble in Las Vegas. On 10 December 2018 their order – the Sisters of St Joseph of Carondelet – confirmed what had happened and said that the sisters would be facing criminal charges. Apart from delivering a welcome crop of puns (gambling habit, put it all on black, hail Mary full of ace…) this story reminds us that (a) source of funds questions are crucial, and (b) listening to (and understanding the implications of) the answers to those questions is twice as crucial.
On that note I shall head off on my festive break. I wish you all a very merry Christmas and a happy new year, and this blog will leap back into life again on Tuesday 2 January 2019.