Fraud Crime as Predicate Act to Money Laundering & Financing of … · 2015 ACFE ASIA PACIFIC FRAUD CONFERENCE THURSDAY, NOVEMBER 5, 2015 GUNAWAN HUSIN Fraud Crime as Predicate Act
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2015 ACFE ASIA PACIFIC FRAUD CONFERENCETHURSDAY, NOVEMBER 5, 2015
GUNAWAN HUSIN
Fraud Crime as Predicate Act to Money Laundering & Financing of Terrorism
Offences“Going behind recent headlines and what really went wrong”.
1990 – 2002: 12 Years; 18 Incidents (reported in the public domain); circa GBP6.3 billion…average size GBP350 million!! Twenty of the world's biggest banks have paid more than $235 billion in fines and compensation in the last seven years. Those over 100 Million between 2008-2015. Ranging from fines for manipulation of currency and interest rate markets to compensation to customers who were wrongly sold mortgages in the United States or insurance products in Britain.
Circumventing Sanctions
• A “Cut and Paste” or “Box Ticking” Exercise• Withholding adverse or negative information • Allocating low risk ratings to avoid case escalation• “Stripping” transaction or payment details to circumvent sanctions• “Wilful Blindness”, “Deliberate and Intentional”
VS
Financial Incentives - Massive compensation when sales targets are metLavish Lifestyle Culture of GreedWeak Management Supervision and Controls. Rewards often tied closely with excessive risk taking
Why the Disconnect - What drives excessive Risk Taking Activities ?
Crippling Criminal/Terrorist Funds WILL Disrupt the lifeblood and Block Criminal/Terrorist Activities and as such, lowers the risk of crime / terrorist attacks.
With no money, less harm can be done.
We all play critical roles to fight Financial Crime
We Can:• prevent criminals/terrorists from using our infrastructure, as they
plan to raise, store and move their funds • establish robust means to understand, identify, escalate and
report suspicions to the appropriate authorities.
We are not Investigators? What can We DO ?
Presenter
Presentation Notes
Why should banks and financial institutions care ? We have a social responsibility and we provide the financial infrastructure for business to operate on and we do so as well for terrorist activities without our knowledge. It is critical that banks play the role to ensure that terrorist funds are curtailed and disrupt terrorist activities. It is therefore important for financial institutions to step up its efforts to identify suspicious terrorist funds and report them to the Authorities. The issue is where do we draw the line between being a banker and and an investigator??
The estimated amount of money laundered globally in one year is 2 - 5% of global GDP, or $800 billion - $2 trillion in current US dollars.