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#2217138 - 07/08/19 03:24 PM Info sharing and fraud
WDCA Offline
Joined: Nov 2015
Posts: 84
Can it be argued that money laundering is the basis for safe harbor under 314b even when the activity relates to fraud?

Our aml vendor that offers a function to collaborate with other FI's under the 314b info sharing rule is encouraging their system function to share info with other local FI's regarding a local fraud ring. In most fraud circumstances I see, I never linked fraud to money laundering, but our vendor's stance is that anytime you have funds that you suspect are related to fraud in or moving through your financial institution, you should also be suspicious that transactions made with those funds may involve money laundering.

Does this stance give us the go-ahead with safe harbor to share info about various fraud matters?

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#2217139 - 07/08/19 03:31 PM Re: Info sharing and fraud WDCA
rlcarey Online
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Joined: Jul 2001
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Galveston, TX
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#2217168 - 07/08/19 07:43 PM Re: Info sharing and fraud WDCA
Buddy the Elf Offline
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Buddy the Elf
Joined: May 2002
Posts: 972
first lily pad on the right
I would suggest reading through the SUAs listed in 18 USC 1956 and 1957. It's a long list and may add the clarification around fraudulent activities that you're referring to. But ultimately, it's going to have to be your decision based on what you're comfortable with because there isn't any guidance beyond what Randy linked to.

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#2217294 - 07/09/19 10:31 PM Re: Info sharing and fraud WDCA
ColoradoAML Offline
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Joined: Mar 2018
Posts: 289
My AML vendor is extremely liberal in their interpretation of 314(b) and how it can be used, to the point that I've restricted viewing access for my staff. I would make sure you're coming to your own conclusions independently of theirs, and if I was tempted I'd probably have my legal council in the decision.

The real answer would probably have to be tested in court, but to add to what those above have said, plenty of people would argue that fraud may not provide safe harbor. The Clearing House even presented it as a recommendation to Congress.

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#2217450 - 07/11/19 07:07 PM Re: Info sharing and fraud WDCA
WDCA Offline
Joined: Nov 2015
Posts: 84
Thanks for the comments. My take away is to enhance procedures and processes to document why we suspect that the transaction involving proceeds of an SUA relates to money laundering or terrorist activity prior to info sharing.

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