A case in point

I’m ba-ack!  So let’s leap straight in with a complaint.  As every MLRO knows, nothing enlivens an AML training session like a story – known officially as a case study.  At the moment, staff are lapping up details of “the £16 million Harrods woman” and “the Assad niece living in luxury in Knightsbridge”.  But these are the big public stories of high-level political corruption – and arguably not the laundering worries that most people in the financial sector are going to be tackling every day.  Moreover, stories make it into the media only when official allegations have been made or – more commonly – once verdicts have been passed by the court.  And, as we all know, the “near miss” can be just as good a training opportunity.  Quoting lists of “red flag” indicators gleaned from industry reports does not make it real enough for people – it does not make them stop short and think, “That could easily have been me”.

I am frequently asked by clients to include case studies in my training.  But they must be relevant to our sector, they say, and they must be current.  This is not unreasonable – but where am I to find such stories?  Of course I fillet the case studies and best practice guidelines issued by regulators, and I sometimes pinch stuff from other jurisdictions and pretend it’s local.  I also ask MLROs if they have any tales from their own organisation – actual laundering, or near misses – and the answer is nearly always this: “Yes, but we can’t tell you about them and we don’t want staff to know.”  (Before I get waves of outrage about SARs and tipping off, I mean either instances where concerns were raised and then allayed, or ones where the investigation is now done and dusted.)  One MLRO even said that he wouldn’t be happy for staff to know about how a particular laundering scheme had (almost) worked because “it might give them ideas”.

What would be ideal as a training resource is a library of detailed yet engaging case studies.  But who could be trusted – or indeed bothered – to maintain such a thing?  The Egmont Group – the trade body for FIUs – does some work in this area, but their last set of case studies was published after the Best Egmont Case Awards in 2013.  (And these are grouped by jurisdiction and predicate crime rather than by affected sector, so you need to read a lot to find ones that are most relevant.)  You can use final notices and best practice indicators from regulators to cobble together stories, but it’s hard work.  So come on, MLROs: who’s up for submitting in-house tales of woe, suitably anonymised, to a central repository to be used for the good of all AML training?

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9 Responses to A case in point

  1. Steve Pittaway says:

    I commend your observation and request to MLRO’s and wider compliance and anti-financial crime teams within organisations. I too work in L&D and the gap in providing ‘real’ examples, relevant to the learners, is frustrating. As you say, help us to help you.

    Great blogs, I welcome your (weekly) observations and comments.

    • Welcome to the blog, Steve, and thank you for your comment and kind words. It’s a bugbear of mine: the criminals are organised and co-operative, so those of us who battle them should be too. No-one should be embarrassed to say that their organisation was caught out by criminals – we’re all vulnerable, and it’s only by sharing best practice and warnings that we will all improve. Lecture over! Best wishes from Susan

  2. CDWOS says:

    Welcome “ba-ack” – I hope the writing went well and Sam 6 is preparing for launch.

    • My mistake: I rearranged the order of my blog posts and forgot to change the intro to this one! I am indeed now really “ba-ack”, and yes, “Sam 6” – now officially “Heir Apparent” – is on target for publication in mid October.

  3. Gareth says:

    I suspect that the businesses mentioned here could provide some examples!
    https://www.gov.uk/government/news/money-sender-fined-record-78-million-in-money-laundering-crackdown

  4. Pingback: Dutch courage | I hate money laundering

  5. CDWOS says:

    Re-reading your post I would say that sadly we have to remember that 30 years down the AML/CFT line despite all the training and millions of words written on the topic we, MLROs, are still dealing with people including some incredibly senior ones who believe that if you have spoken to your MLRO about a problem you can no longer talk to your client as it is ‘tipping off’. The submission or not of an internal report doesn’t enter their thought process

    • If I had a penny for every time I had to confirm that no, doing normal due diligence enquiries does not “count” as tipping off, and that, moreover, an integral part of CDD is ongoing monitoring and continuing to speak to your client, regardless of any suspicions, I would be a rich woman! Now, how could I launder all of those pennies…

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