Featured Expert Contributor, White Collar Crime and Corporate Compliance
Gregory A. Brower is Chief Global Compliance Officer for Wynn Resorts. He also serves on WLF’s Legal Policy Advisory Board and is a former U.S. Attorney.
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The U.S. Department of the Treasury’s Office of Terrorist Financing and Financial Crimes recently released its latest National Money Laundering Risk Assessment (“NMLRA”). A collaborative effort by several federal agencies and the Nevada Gaming Control Board, the publication assesses the current money laundering environment within the United States and identifies the ways in which criminals and other actors seek to launder illicit funds.
This updated NMLRA identifies the top laundering threats as fraud, drug trafficking, cybercrime, corruption, human trafficking and smuggling, and professional money laundering. Several issues of “special focus” are highlighted in the assessment including:
Check Fraud – The assessment notes that the illicit use of paper or digital checks to unlawfully gain money has exploded in recent years leading to a 94 percent increase in the filing of related Suspicious Activity Reports (“SARs”).
Russian Money Laundering Activity – Russia-linked professional money laundering has emerged as a serious threat to the national security of the United States and the assessment specifically calls out Interest on Lawyers’ Trust Accounts (“IOLTAs”) as an increasingly popular means of legitimatizing corrupt payments.
Unlawful Campaign Finance – The assessment describes the recent increase in money laundering in and around domestic political campaigns as potentially undermining our democracy by offering corrupt or illicit actors an unfair political advantage.
Tax Crime – Because of significant recent increase in state and federal payroll tax evasion, which leads to money laundering in the same way that other illegal activities do, the assessment makes specific mention of this trend.
Decentralized Financing (“DeFi”) – The use of emerging technologies such as cryptocurrencies, blockchain, and software that facilitates financial transactions without the need for traditional third-party institutions, is popular with illicit actors and is cited as a new challenge for regulators.
Online Gaming – The substantial growth of online gaming since 2018 has been accompanied by money laundering risks, some similar to traditional risks present in land-based casinos, but some unique to the online model.
As existing threats evolve and new threats emerge, industries subject to anti-money laundering regulation must be vigilant in assessing these risks and updating their compliance programs accordingly. At the same time, policy makers and regulators must act quickly to update laws, regulations, and guidance to ensure that regulated industries have the tools they need to be effective partners in the effort to combat money laundering.