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OCC Makes Use Of Fast Track
Uses Data From SARs
BANKERS' HOTLINE interviewed Robert Serino, Deputy Chief Counsel, Office of the Comptroller of the Currency, (OCC) Washington, DC at the ABA Security Conference in San Diego, CA.
Bankers' Hotline: What do you feel is the biggest problem facing bankers in today's environment from the OCC perspective?
Robert Serino: Well, I know the ABA conference here is dealing with robbery, check fraud, stolen ID and the like - but from what I see in Washington, the biggest problem is money laundering. The financial industry needs to be more pro-active. There is more it can do to discover and deter money laundering.
BH: Anything specific?
RS: Well if the financial institution doesn't have a compliance program in place for both the Bank Secrecy Act and the Anti-Money Laundering Act, it's certainly in big trouble by now - they're crazy if they don't! The Know Your Customer and Suspicious Activity reporting systems should be well defined and in good working order for our people to decide that compliance is complete. And it's not enough to have a general policy - it needs to be specific.
The excellent compliance program does two things for the financial institution. First, it helps to prevent problems and violations in the area of money laundering; and second, if a prosecutor looks at a financial institution that has a good, well-defined program in place and a violation occurs, they're going to go a lot easier on that institution. The sentencing guidelines even address that issue, and give credit for good policies and procedures. I call it a sword and shield effect. One part gives you the attacking procedures, and the other part protects you from retribution.
If everyone is trained and the policies and procedures are in place, you're in a much better position to discover money laundering.
BH: Would you shift your gears for a moment to the reporting of employee defalcation? You mentioned something special the OCC is doing with Suspicious Activity Reports. Would you be kind enough to explain your procedure to our readers?
RS: Certainly. We're very much aware of the fact that many banks hesitate reporting an employee theft on an SAR, though it's a requirement, because they feel that even if they do report it, nothing will be done about it. That employee could be going from bank to bank doing the same thing over and over. So we DO something about it at OCC regulated banks.
We realize there is a problem in the prosecution of embezzlers of small amounts. For that reason, the OCC has their own Fast Track program. We're taking all of the SARs being reported to Detroit by our national banks, and downloading all the information into our data base. We're then reviewing that data for information on insiders. If the violation is over $5,000 and there is no prosecution noted, we're going to take action. We have a representative in each one of our six regional offices to evaluate, review and investigate those particular SARs.
Then, depending on the investigation, if the situation warrants it, we will remove that person from banking for life; we will require restitution to the financial institution involved, and we will assess a civil money penalty against the individual.
I encourage our banks to not only report, but remember the squeaky wheel gets the most grease!
BH: You mentioned a representative in each of the six regional offices. How can OCC regulated financial institutions contact these people?
RS: They're called Fraud Specialists, and I'll supply you with the names and locations so you can pass them on to your readers.
Editor's note: That list is at the end of this article.
And there is another thing the any financial institution can do to protect itself in this area. We can't list former employees that are being investigated - but we can list those on which enforcement action has been taken. You can identify those people we have processed through our Fast Track program by going on our web site http://www.occ.treas.gov/ and reviewing the list of names.
District Fraud Specialists
Northeastern District
Donald R. Wiley (212)790-4065
Southeastern District
Palmer Lee Bell (305) 262-8203
Central District
Jane E. Otto (414) 289-0169
Midwestern District
Brian L. Lewis (314) 469-5991
Southwestern District
Larry A. Burch (405) 848-8058
Western District
Matthew T. Johnson (415) 545-5947
Copyright © 1998 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 8, No. 2, 2/98
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