You are the BSA Officer of a large US banking institution that was recently taken over by an international Conglomerate which has installed a new Board of Directors (“Board”). The new CFO shared with you her plans to present a new budget recommendation to the Board.
You are the BSA Officer of a large US banking institution that was recently taken over by an international Conglomerate which has installed a new Board of Directors (“Board”). The new CFO shared with you her plans to present a new budget recommendation to the Board.
In the recommendation, the CFO proposes, among other things, reducing funding to the AML team and directing that funding to enhance the Bank Operations team, a team focused on maintaining bank records. This move is based on the CFO’s belief that existing bank records are sufficient to manage financial crime risk. The CFO has provided you the opportunity to support or reject her proposal in advance of the upcoming Board meeting. Make a counterpoint to the CFO’s argument that existing bank records are sufficient, by putting yourself in law enforcement’s shoes and explaining how and why recordkeeping alone falls short of the desired assistance to law enforcement that reporting would provide.
2. In addition to providing the CFO with your thoughts on her proposal, you must get ready for the AML Team’s first presentation to the new Board. What are the 3 most important data points that you want to report on? Please explain why you selected those data points (i.e., what are your concerns) and include the frequency of reporting to the Board.
3. As a result of the acquisition of the new company, the new Internal Audit team conducts a pre-operational review of the AML program. Shortly after their review, findings from the recent Internal Audit of the AML program are released. The findings are provided below.
Findings:
Lack of mechanisms to identify and risk rate high risk customers
Failure to develop controls that help identify, monitor, and report suspicious activities
Lack of a mechanism to inform the board of directors and senior management of identified BSA-compliance deficiencies and corrective action taken, and notify the board of directors of SARs filed
Playing the role of an outside consultant, you are asked to assist the AML Officer with developing management action plans (MAPs) for remediating the issues. List your top five recommendations to address these weaknesses, with specific guidance from your experiences and viewpoint as the type of consultant who wants to help the institution improve the program with their limited resources.
4. Changing roles, you are now the AML Officer who has received these recommendations. Based on your interactions with the CFO, you fear the new institution will not take these recommendations seriously. What steps do you take to ensure proper attention is focused on the recommendations and to whom should you escalate?
5. Your best friend, Kris, has been approached with an “unbelievable” business opportunity. Kris is a gamer and has a crew of online friends, that get together virtually and play military-style shooter games online. Kris’s buddy Angelina told Kris that she made some quick cash by helping another friend, whom Kris doesn’t know. Essentially, Angelina tells Kris that the other friend, Jacob, sells marijuana laced baked goods which have become “as big as Girl Scouts Cookies.” Jacob’s problem, however, is that his business absolutely exploded, and he has made so much money that he can’t keep it in the house, and he doesn’t want to take the money to the bank (he has watched many movies to know that isn’t smart).
Jacob’s plan is simple, Jacob sends Angelina a pre-loaded gift card in the amount of $1,000, which she will use to purchase a printer from Jacob on his Online Marketplace store, in the amount of $800. Jacob tells Angelina that he will sell her the printer but will not ship anything to her. Angelina gets to keep the remaining $200 left on the gift card and Jacob can transfer the $800 into his bank account, from his Online Marketplace account, with no questions asked. Angelina tells Kris she has done this multiple times and it’s a “sure thing.”
Kris relies on you for advice because you have always been the “smart one.” Using your BSA knowledge, breakdown what is taking place in Jacob’s scheme and discuss how this scheme may or may not impact Kris, should he decide to participate.
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