FinCEN and Federal Reserve Seek Comments on Proposed Amendments to the Recordkeeping and Travel Rules

healthcare money On October 23, 2020, the Board of Governors of the Federal Reserve System (the ‘‘Board’’) and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) (collectively, the “Agencies”) issued a joint Notice of Proposed Rulemaking (“NPRM”) soliciting public comment on questions relating to potential amendments to Bank Secrecy Act (“BSA”) regulations. The proposed amendments seek to modify the existing Recordkeeping Rule and Travel Rule by:

Lowering the requirement to collect, retain, and transmit information on funds transfers and transmittals of funds from $3,000 to $250 for transactions that begin or end outside the United States; and
Superseding the existing definition of money to include convertible virtual currencies (“CVCs”).

FinCEN Imposes First of its Kind Civil Penalty against Cryptocurrency Money Service Business

By Kevin McCart, Clay Porter and Trevor Garmey on November 6, 2020 Posted in anti-money laundering, Bank Secrecy Act, bitcoin, Compliance Program, Cryptocurrency, FinCEN, Money Service Business, US Treasury

On October 19, 2020, the Financial Crimes Enforcement Network (FinCEN) released its assessment of a $60 million civil monetary penalty against the operator of two cryptocurrency “mixers” for violations of the Bank Secrecy Act (“BSA”).[1] The action marks the first effort by FinCEN to target the use of these “mixers” to facilitate money laundering and demonstrates FinCEN’s ongoing commitment to regulate entities that transmit cryptocurrencies as money service businesses (“MSBs”) under the BSA.[2]

DOJ Prioritizes Health Care Fraud in the Pandemic

By Marisa Darden and Chase Goldstein on October 13, 2020 Posted in bribery, Compliance Program, corruption, COVID-19, Department of Justice, False Claims Act (FCA), Fraud, Healthcare, Industry Investigations, telemedicine

The Department of Justice (“DOJ”) recently announced its largest ever health care fraud and opioid enforcement action. In a coordinated effort, DOJ charged 345 defendants with more than $6 billion in fraud losses for submitting false and fraudulent claims to federal health care programs and private insurers.

4 Compliance Tips Amid Increased Ransomware Scrutiny

By Colin Jennings, Ericka Johnson, Dylan J. Yépez and Elizabeth Weil Shaw on October 9, 2020 Posted in anti-money laundering, anti-terrorism financing laws, Compliance Program, cyberattack, cybersecurity, Data Protection & Privacy, FinCEN, OFAC, ransomware, US Treasury

In light of two new US Treasury Department advisories signaling increased oversight of ransomware payments, victim companies and their third-party response teams considering making payments should follow certain due diligence and compliance best practices, write Colin Jennings, Ericka Johnson, Dylan Yépez and Elizabeth Weil Shaw in an article for Law360.

Cryptocurrency Exchange and its Executives Face Allegations of Failing to Maintain an Adequate AML Program

By Kevin McCart, Clay Porter and Rebecca Worthington on October 7, 2020 Posted in anti-money laundering, Bank Secrecy Act, Commodities Futures Trading Commission, Compliance Program, Cryptocurrency, Department of Justice, FinCEN, Fraud, Government Investigation, OFAC

Two U.S. authorities recently announced actions against four individuals and numerous entities associated with BitMEX, an online trading platform for futures contracts and other derivative products tied to the value of cryptocurrencies. Both actions allege that BitMEX failed to put in place required anti-money laundering programs and procedures, and serve as a reminder that institutions offering new and innovative financial products should assess the potential applicability of and compliance with U.S. anti-money laundering laws and regulations.

Ransomware Payments can lead to Sanctions and Reporting Obligations for Financial Institutions

By Kevin McCart, Clay Porter and Elizabeth Weil Shaw on October 6, 2020 Posted in Bank Secrecy Act, cyberattack, cybersecurity, Data Protection & Privacy, Economic sanctions, FinCEN, OFAC, ransomware, Sanctions

With cybercrime on the rise, two U.S. Treasury Department components, the Office of Foreign Assets Control (“OFAC”) and the Financial Crimes Enforcement Network (“FinCEN”), issued advisories on one of the most insidious forms of cyberattack – ransomware.

FinCEN Director Blanco Encourages Increased Communication During Global Pandemic

By Clay Porter, Coates Lear and Elizabeth Weil Shaw on October 1, 2020 Posted in Anti-corruption, anti-money laundering, Bank Secrecy Act, Compliance Program, COVID-19, cybersecurity, Data Protection & Privacy, FinCEN, Fraud, Healthcare

coronavirus cell render In remarks to the Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Kenneth A. Blanco, the Director of the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”), covered a number of high-priority topics, including FinCEN’s response to the pandemic, the latest COVID-19 related fraud schemes, emerging cyber threats, virtual currency issues, and important regulatory updates. A theme throughout his speech was FinCEN’s commitment to increased and meaningful communication with the entities it regulates.

SEC Approves Changes to Its Whistleblower Program

By Coates Lear and Elizabeth Weil Shaw on September 24, 2020 Posted in Anti-corruption, corporate compliance, Fraud, Government Investigation, Industry Investigations, Securities Litigation and Enforcement, U.S. Securities and Exchange Commission, Whistleblowing

Read Card This week, in a 3-2 vote, the U.S. Securities and Exchange Commission (“SEC” or the “Commission”) approved significant changes to the rules governing its whistleblower program. The program, established by the Dodd-Frank Act in 2011, incentivizes those with information about possible securities law violations to report to the SEC. If the tipster provides “high-quality original information” that leads to an enforcement action where monetary sanctions exceed $1 million, the SEC will award a bounty equal to 10 to 30 percent of the sanctions. According to the SEC, whistleblower reports have already led to enforcement actions ordering over $2.5 billion in financial remedies and resulting in more than $500 million in whistleblower awards.

The White House Directs Federal Agencies to Focus on Fairness in Investigations and Enforcement

By Coates Lear, Clay Porter, Keith Bradley and Elizabeth Weil Shaw on September 20, 2020 Posted in Anti-corruption, anti-money laundering, Compliance Program, coronavirus, COVID-19, Government Investigation, Industry Investigations, Securities Litigation and Enforcement, Uncategorized

On May 19, 2020, in response to the COVID-19 pandemic, President Trump signed Executive Order 13924, to provide regulatory relief for entities economically impacted by the pandemic. Section 6 of the Executive Order directed agencies to revise their procedures and practices in administrative investigations and enforcement in light of certain enumerated principles of fairness. It also required the Director of the Office of Management and Budget (OMB), in consultation with the Assistant to the President for Domestic Policy and the Assistant to the President for Economic Policy, to issue memoranda needed to guide implementation of the EO. On August 31, 2020, OMB issued such a memorandum, providing guidance on the implementation of Section 6.

FinCEN’s New Rule Impacts Banks Lacking a Federal Functional Regulator

By Clay Porter and Rebecca Worthington on September 15, 2020 Posted in Anti-corruption, anti-money laundering, Compliance Program, FinCEN, US Treasury

On September 14, 2020, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (“Rule”) requiring the minimum standards for anti-money laundering programs for certain institutions lacking a Federal functional regulator. The Rule applies to banks that lack a Federal functional regulator, including, but not limited to, private banks, privately insured credit unions, and certain trust companies. The Rule also extends customer identification program and beneficial ownership requirements to those institutions.