Legend has the term originated from Al Capone’s practice of operating laundromats around Chicago as fronts where the proceeds from his bootlegging operations were “cleaned.” Dramatized on film in such classics as “Scarface” and “Goodfellas,” and in series like “The Sopranos” and “Breaking Bad,” Fincen.gov defines it as money laundering as “…the disguising of financial assets so they can be used without detection of the illegal activity that produced them. Through money laundering, the criminal transforms the monetary proceeds derived from criminal activity into funds with an apparently legal source.”
Upon retiring from the NYPD in 2005, I found myself thrust into the world of anti-money laundering, working as a consultant on a bank Lookback project. A “Lookback” may be ordered by federal authorities when a regulatory review reveals an institution failed to appropriately investigate and/or report unusual activity.
Although the anti-money laundering industry had been around since the 70s, it received a horrific and sobering wake-up call on the morning of September 11, 2001. In the wake of the attacks, it became apparent that the terrorists had used the U.S. banking system practically undetected to move monies that funded their activities both internationally and domestically. In part, this resulted in the creation of the USA PATRIOT Act that afforded banks new tools to help combat terrorist financing, and incidentally, money laundering and tax evasion.
My entry into the world of financial surveillance took place amid a perfect storm of need, ability and nepotism. Brian Hagerty, a former partner of mine, had retired six months prior to me at the rank of lieutenant. After posting his already impressive resume online, he soon found himself helming a team of contractors on a Lookback being conducted on a domestic bank recently purchased by a foreign financial institution. Not long after, I joined that project, already in progress. Since that time, I have worked as an anti-money laundering investigator (as a consultant/contractor or full-time employee) at numerous multinational financial institutions.
Starting a career in financial crimes prevention
The world of anti-money laundering has changed a great deal in the almost two decades since I entered the field. First and foremost, the name; sometime over the past decade, “anti-money laundering” morphed into “financial crimes prevention.” As I am often asked by law enforcement officers how they can best position themselves to transition to a second career in financial crimes prevention, I decided to interview Brian and two former colleagues about the advice they would offer cops seeking to start a new chapter in their lives.
Brian’s second career in financial crimes prevention took him from middle to upper management, serving at the director level at firms such as HSBC, Chase and Deutsche Bank.
“Compared to now, 2005 was the Dark Ages. Back then there was a great urgency, and most people were hired as consultants,” he said recently over coffee. “Now, the industry has caught up with itself, and there’s been a shift toward recruiting people right out of college. This provides a great advantage in terms of employees being up to speed on technology. But the flip side of that is there can sometimes be a lack of maturity, and of course, little to no real-world experience. For example, younger people will sometimes hesitate in identifying something as suspicious.”
I asked what LEOs could do to level the technological playing field.
“Taking a class in Microsoft Office would provide a great advantage. An investigator’s point of view of financial activity begins and ends with Excel, and it would also help to be familiar with PowerPoint. Also, their resume should highlight investigative experience. Read up on financial crimes prevention; know the difference between retail and correspondent banking, a 314(a) and 314(b), what a Suspicious Activity Report (SAR) is. If a person’s finances allow, perhaps getting CAMS certified.”
The Association of Certified Anti-Money Laundering Specialists (ACAMS) provides specialist certification by way of an exam. “Not having the certification isn’t a deal breaker, but it doesn’t hurt. However, the catch-22 is that sometimes if a candidate is hired without CAMS, many firms will pay for them to take the exam.”
“Another thing LEOs need to keep in mind is that working with and supervising civilians is just different. We are so used to the paramilitary environment and mindset found in policing. The vast majority of LEOs are alpha-type personalities. Adjusting to that difference in the corporate climate can prove insurmountable to some.”
The assets cops bring to the table
For a civilian’s perspective on working with and supervising former police officers working in financial crimes prevention, I met with Toneta Sula, an attorney whose resume includes time spent in FCP roles at Chase and BNP Paribas. She currently heads a special investigations team at UBS.
“I’ve worked with many former law enforcement officials,” she began. “From former police officers and detectives to state troopers and feds. They all bring a wealth of experience with them, as well as interesting and valued perspectives. They’re also not afraid to express their opinions on a given matter.”
“Really?” I laughed. “Cops who are not shy about sharing their point of view. Amazing.”
She smiled. “Well, it’s a double-edged sword. Former law enforcement has that instinct for when things don’t look right, and that transfers very well into financial crimes investigations. That kind of thing can only be gained through experience. The downside is that they can be very stubborn once they’ve decided whether something is suspicious or not. I’ve found that if I don’t agree about a particular decision, for whatever reason, their pushback can be somewhat stronger than that of someone with no law enforcement experience. However, I do enjoy that kind of debate, and many times I have been convinced by a particular argument and came to see it their way. So, I’d add persuasiveness to the list of pros in working with LEOs.”
Finally, I met with Carlo Pellicciari. With extensive experience working alongside and supervising dozens of LEOs in his 20-plus-year career in banking and financial crimes prevention, the breadth and depth of his knowledge is vast. Starting his career at the branch level in the 1990s, he has since worked as a financial crimes prevention investigator, team leader and director at institutions such as Israel Discount Bank, HSBC and BNP Paribas, and is currently in a Governance role at Barclays.
“My advice to anyone looking to get their foot in the financial crimes prevention door with little or no experience; be on the lookout for KYC projects seeking contractors, or even full-time positions.”
KYC is Know Your Customer. Financial institutions are mandated by law to be aware of their customers’ employment and citizenship status, political exposure, sources of income, and to keep copies of related documents. This applies to customers that might be companies, large and small, as well as individuals.
“KYC work is mostly focused on background investigations and research,” he continued. “Those are things that LEOs usually have experience in and are comfortable with.”
I asked if working so closely with so many cops over so many years might have changed his perception of them.
“Despite being born and raised in the Bronx in the 70s and 80s, I had very little direct exposure to the police. My father was an immigrant and a small business owner, so he had that mix of fear and respect, and I guess I absorbed some of that, as well as the stereotypes we’re all fed from film and TV.”
He paused as the server refilled our glasses.
“Most LEOs I’ve had the pleasure of working with have strong writing skills. And the good news is that Suspicious Activity Reports are very similar to police reports; ‘Who, What, When, Why and Where.’ That’s a huge benefit in financial crimes prevention.”
A Suspicious Activity Report is the culmination of a bank’s investigation that could not mitigate potentially suspicious activity. The report is then filed by bank officials directly with the federal government through the FinCEN (Financial Crimes Network) database. This repository of pertinent information is then made available to law enforcement as an aid to investigations.
I asked Carlo what he thought were cops’ strongest assets overall.
“I’ve been very impressed by the average cop’s ability in reading a room, their situational awareness. In today’s corporate climate, that skill can be as valuable in the boardroom as on the street. In addition, their discipline in arriving early and staying late, the patience to sit long hours doing what can be tremendously tedious work, sometimes in cramped conference rooms with no windows, working on laptops; their ability to adapt is very admirable.”
How financial crimes prevention technology is evolving the profession
In closing, I’d be remiss if I didn’t mention how near-shoring and off-shoring have historically and continue to move financial crimes prevention jobs away from urban centers on the West Coast and the Northeast to more affordable areas of the country, as well as other countries.
A more recent threat to the industry comes in the form of the chatbots that have been stealing (and in some cases, writing) headlines around the world these past few months. I have experience working with their cyber cousins, the so-called search bots. These are programs that search a bank’s internal records and the internet, as well as subscription sites such as Lexis Nexis and Westlaw while an investigator is busy doing other mundane tasks. It doesn’t take a genius to see how the marriage of these technologies may soon reduce the number of financial crimes prevention workers. I can foresee a scenario where computers conduct the investigations overnight and then a handful of humans check over the work for accuracy the next day.
However, no matter how artificial intelligence affects the world of financial crimes prevention, there will always be a need for seasoned investigators. So, if you find the allure too much to resist, please take all the above into consideration and go for it.
