Gunster- Banking and Financial Services, March 2009
On March 16, 2009, the Financial Crimes Enforcement Network (“FinCEN”) released the results of a study examining the relationship between mortgage loan fraud and other financial crimes (“Study”).
The Study examined the activities of individuals reported in depository institution Suspicious Activity Reports (“SARs”) for suspected mortgage loan fraud(“Mortgage Loan Fraud Suspects”) between July2003 and June 2008, and identifies patterns of activities of Mortgage Loan Fraud Suspects by evaluating the SARs filed by non-depository institutions such as: (i) Money Services Businesses(“MSBs”); (ii) securities brokers/dealers andinsurance companies; and (iii) casinos and cardclubs.
The most notable findings of the Study provide that:(i) the most commonly reported activities ofMortgage Loan Fraud Suspects were money laundering and structuring of transactions to avoid currency transaction reporting requirements; (ii)check fraud by Mortgage Loan Fraud Suspects wasreported at a significantly higher rate (17%)compared with only 3% in all casinos/card clubSARs; (iii) approximately 70% of the SARs filed byMSBs described suspicious wire transfers by Mortgage Loan Fraud Suspects and 34% described wire transfers to foreign countries, with Nigeria being the most frequently reported foreigndestination of funds; and (iv) the SARs filed by securities brokers/dealers and insurance companies reported that an unusually high number of Mortgage Loan Fraud Suspects presented suspicious documents and fraudulent identifications. Furthermore, securities brokers/dealers and insurance companies reported a higher incidence of identity theft by Mortgage Loan Fraud Suspects from July 2007 through June 2008 than in the previous four years combined.
The findings of the Study illustrate the overlap offinancial crimes across a variety of industries. Financial institutions should review the results of the Study as these may assist in improving the efficiency and effectiveness of Bank Secrecy Act compliance and reporting, as well as the identification of potentially illegal activity.
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Should you wish to receive further information concerning matters discussed in this publication,please contact:
Clemente L. Vazquez-Bello305.376.6082 ▪ [email protected]
Andres A. Fernandez305.376.6097 ▪ [email protected]
Marina Olman305.376.6069 ▪ [email protected]
This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken which might be influenced by this publication.
