ATM - Commonly Filed Violations
Automated teller machines have become an ubiquitous part of our everyday lives. The number of automated teller machines has grown exponentially since 1969 when the first machine was put into service. Today, in the United States alone, there are an estimated 388,500 automated teller machines. These customer-friendly portals provide a wide array of banking services, are available 24 hours a day, and are found in almost every imaginable location. The wide availability and ease of use of automated teller machines allow people to conduct financial transactions with greater flexibility and convenience. Unfortunately, criminals also use automated teller machines. Money launderers, in particular, have found automated teller machines to be a convenient and relatively less risky way to structure transactions to avoid the various reporting requirements of the Bank Secrecy Act. Check fraudsters have also found that passing insufficiently funded checks through an automated teller machine provides them with a greater degree of anonymity.
As a follow-up to previous SAR Activity Review articles and to SAR Bulletin - Issue 1 (June 1999), FinCEN sampled Suspicious Activity Reports filed after SAR Bulletin ? Issue 1 was published to determine if identifiable patterns of suspicious activity associated with automated teller machines had changed appreciably. This analysis showed that the two prominent suspicious activities identified in 1999, use of automated teller machines as a way of avoiding certain Bank Secrecy Act requirements and check fraud, still represent the primary trends of suspicious activities reported in current Suspicious Activity Report filings.
Continued Use of Automated Teller Machines to Avoid Bank Secrecy Act Reporting Requirements
As was previously noted in SAR Bulletin ? Issue 1, automated teller machines continue to be used by some to avoid the Currency Transaction Report. It is also suspected that money launderers and other criminals are using automated teller machines to avoid filing Reports of International Transportation of Currency and Monetary Instruments.
Cross Border Currency Movements
Law enforcement investigations reveal that drug dealers frequently use domestic automated teller machines to deposit illicit proceeds into financial institution accounts and then withdraw the funds from automated teller machines located in their drug suppliers? countries of origin. This method is a way to avoid the risks associated with bulk cash smuggling and the enhanced scrutiny of law enforcement at the borders. This technique also facilitates avoidance of a Report of International Transportation of Currency and Monetary Instruments filing. This same method can be used to move virtually any other type of illicit proceeds.
A recent analysis by FinCEN found that financial institutions located in Florida file the majority of Suspicious Activity Reports that report suspicious cash withdrawals from automated teller machines in foreign countries. This finding likely is due to Florida?s close proximity to the Caribbean and Latin America as well as Miami?s role as an international travel hub. Florida also has a renowned tourism industry and, consequently, a strong cash economy. Money launderers prefer to operate in cash intensive areas like south Florida hoping that the likelihood of ?illegal? cash being detected will be significantly reduced.
Excerpted from SAR Activity Review Issue 7, page 23
First published on 08/01/2004