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Prepaid Card Money Laundering....

Discussion in 'America the Beautiful' started by RobWin, Apr 1, 2008.

    Apr 1, 2008
  1. RobWin

    RobWin closed account

    Occupation:
    Who knows?
    Location:
    A Vault!
    FOR IMMEDIATE RELEASE

    NBPCA Releases Recommended Practices for Anti-Money Laundering Compliance

    Contact: Jennifer Tramontana
    Director of Communications
    303-929-9636
    This email is not visible to you.


    Network Branded Prepaid Card Association Releases
    Recommended Practices to Reduce Potential
    for Prepaid Card Money Laundering


    February 22, 2008 (Montvale, NJ) The Network Branded Prepaid Card
    Association (NBPCA), a non-profit trade organization that works to enhance the environment for the success of network branded prepaid cards, took steps today to assist in the industrys response to reduce the potential for prepaid cards to be used for money laundering, financial crime or other illegal activity such as terrorist financing.

    The Association has released Recommended Practices for Anti-Money Laundering Compliance for U.S.-based Prepaid Card Programs. The document provides recommendations for all network branded prepaid card industry participants to support compliance with the U.S. Bank Secrecy Act (BSA) anti-money laundering (AML) program requirements. It recommends how to implement internal controls, monitor and manage third-parties involved with prepaid card processes and mitigate risks associated with money laundering. It is the result of 11 months of work by the NBPCA AML Task Force, which drew on the extensive experience of the NBPCA membership, which includes card brands, financial institutions, issuers, program managers, law firms, distributors and processors.

    Prepaid cards are already less vulnerable to illicit activity than other forms of
    payment such as cash or checks, but the recommended practices in this document provide a roadmap to risk reduction that will further safeguard prepaid cards, said Terry Maher, Partner, Baird Holm LLP and Chair of the NBPCA AML Task Force. These recommended practices are a must-have for all businesses that sell, market, issue or fund prepaid card programs.

    To ensure the document addresses the questions and concerns of law enforcement and government agencies, the NBPCA has and will continue to maintain an open dialogue with federal, state and local regulatory agencies as well as law enforcement officials. The document address risks identified through information sharing between the industry and critical agencies that monitor financial crime.

    Recommended Practices for Anti-Money Laundering Compliance for U.S.-based Prepaid Card Programs is a practical guide to setting up, implementing and auditing a compliance program. It covers the following areas:

    1. How to conduct a risk assessment.

    2. How to establish a set of internal controls to achieve compliance with AML
    program requirements of the BSA.

    3. Federal reporting requirements and red flags to look for with respect to
    suspicious activity.

    4. Adopting and implementing programs to comply with know your customer
    requirements.

    5. Reducing risk when working with non-financial institutions, third-party agents and processors.

    6. How to implement independent compliance testing.

    7. Training program guidelines for key personnel.


    The NBPCA is making Recommended Practices for Anti-Money Laundering
    Compliance for U.S.-based Prepaid Card Programs available to anyone in the
    prepaid card industry. The report can be downloaded from the NBPCA website at You must register/login in order to see the link..

    The NBPCA encourages practices that reduce the opportunities for prepaid cards to be used in illicit activities. We support national and international efforts to combat money laundering, terrorist financing and financial crime, said Anil D. Aggarwal, NBPCA Chairman of the Board. We are committed to helping our members and all prepaid card industry participants comply with such laws and regulationsthis industry-created guide serves as a blueprint in that pursuit.

    ###


    About the NBPCA

    The Network Branded Prepaid Card Association (NBPCA) is a nonprofit, inter-industry trade association that supports the growth and success of network branded prepaid cards and represents the common interests of the many players in this new and rapidly growing payment category. The NBPCAs members include financial institutions, card organizations, processors, program managers, marketing and incentive companies, card distributors and law firms. The NBPCAs Working Groups drive the activities of the Association for its more than 35 members. For additional information, visit You must register/login in order to see the link..


    You must register/login in order to see the link. for Anti-Money Laundering Compliance for U.S.-Based Prepaid Card Programs



    ################################################​
     
    Last edited: Apr 1, 2008
  2. Apr 1, 2008
  3. RobWin

    RobWin closed account

    Occupation:
    Who knows?
    Location:
    A Vault!
    Bank Secrecy Act & Anti-Money Laundering...

    MONEY LAUNDERING AND TERRORIST FINANCING "RED FLAGS"


    The following are examples of potentially suspicious activities, or "red flags" for both money laundering and terrorist financing. Although these lists are not all-inclusive, they may help banks and examiners recognize possible money laundering and terrorist financing schemes. Managements primary focus should be on reporting suspicious activities, rather than on determining whether the transactions are in fact linked to money laundering, terrorist financing, or a particular crime.


    The following examples are red flags that, when encountered, may warrant additional scrutiny. The mere presence of a red flag is not by itself evidence of criminal activity. Closer scrutiny should help to determine whether the activity is suspicious or one for which there does not appear to be a reasonable business or legal purpose.

    Potentially Suspicious Activity that May Indicate Money Laundering

    Customers Who Provide Insufficient or Suspicious Information

    A customer uses unusual or suspicious identification documents that cannot be readily verified.

    A customer provides an individual tax identification number after having previously used a Social Security number.

    A customer uses different tax identification numbers with variations of his or her name.

    A business is reluctant, when establishing a new account, to provide complete information about the nature and purpose of its business, anticipated account activity, prior banking relationships, the names of its officers and directors, or information on its business location.

    A customers home or business telephone is disconnected.

    The customers background differs from that which would be expected on the basis of his or her business activities.

    A customer makes frequent or large transactions and has no record of past or present employment experience.

    A customer is a trust, shell company, or Private Investment Company that is reluctant to provide information on controlling parties and underlying beneficiaries. Beneficial owners may hire nominee incorporation services to establish shell companies and open bank accounts for those shell companies while shielding the owners identity.

    Efforts to Avoid Reporting or Recordkeeping Requirement

    A customer or group tries to persuade a bank employee not to file required reports or maintain required records.

    A customer is reluctant to provide information needed to file a mandatory report, to have the report filed, or to proceed with a transaction after being informed that the report must be filed.

    A customer is reluctant to furnish identification when purchasing negotiable instruments in recordable amounts.

    A business or customer asks to be exempted from reporting or recordkeeping requirements.

    A person customarily uses the automated teller machine to make several bank deposits below a specified threshold.

    A customer deposits funds into several accounts, usually in amounts of less than $3,000, which are subsequently consolidated into a master account and transferred outside of the country, particularly to or through a location of specific concern (e.g., countries designated by national authorities and Financial Action Task Force on Money Laundering (FATF) as non-cooperative countries and territories).

    A customer accesses a safe deposit box after completing a transaction involving a large withdrawal of currency, or accesses a safe deposit box before making currency deposits structured at or just under $10,000, to evade Currency Transaction Report (CTR) filing requirements.

    Funds Transfers

    Many funds transfers are sent in large, round dollar, hundred dollar, or thousand dollar amounts.

    Funds transfer activity occurs to or from a financial secrecy haven, or to or from a high-risk geographic location without an apparent business reason or when the activity is inconsistent with the customers business or history.

    Many small, incoming transfers of funds are received, or deposits are made using checks and money orders. Almost immediately, all or most of the transfers or deposits are wired to another city or country in a manner inconsistent with the customers business or history.

    Large, incoming funds transfers are received on behalf of a foreign client, with little or no explicit reason.

    Funds transfer activity is unexplained, repetitive, or shows unusual patterns.

    Payments or receipts with no apparent links to legitimate contracts, goods, or services are received.

    Funds transfers are sent or received from the same person to or from different accounts.

    Funds transfers contain limited content and lack related party information.

    Automated Clearing House Transactions

    Large-value, automated clearing house (ACH) transactions are frequently initiated through third-party service providers (TPSP) by originators that are not bank customers and for which the bank has no or insufficient due diligence.

    TPSPs have a history of violating ACH network rules or generating illegal transactions, or processing manipulated or fraudulent transactions on behalf of their customers.

    Multiple layers of TPSPs that appear to be unnecessarily involved in transactions.

    Unusually high level of transactions initiated over the Internet or by telephone.

    National Automated Clearing House Association (NACHA) information requests indicate potential concerns with the banks usage of the ACH system.

    Activity Inconsistent with the Customers Business

    The currency transaction patterns of a business show a sudden change inconsistent with normal activities.

    A large volume of cashiers checks, money orders, or funds transfers is deposited into, or purchased through, an account when the nature of the accountholders business would not appear to justify such activity.

    A retail business has dramatically different patterns of currency deposits from similar businesses in the same general location.

    Unusual transfers of funds occur among related accounts or among accounts that involve the same or related principals.

    The owner of both a retail business and a check-cashing service does not ask for currency when depositing checks, possibly indicating the availability of another source of currency.

    Goods or services purchased by the business do not match the customers stated line of business.

    Payments for goods or services are made by checks, money orders, or bank drafts not drawn from the account of the entity that made the purchase.

    Lending Activity

    Loans secured by pledged assets held by third parties unrelated to the borrower.

    Loan secured by deposits or other readily marketable assets, such as securities, particularly when owned by apparently unrelated third parties.

    Borrower defaults on a cash-secured loan or any loan that is secured by assets which are readily convertible into currency.

    Loans are made for, or are paid on behalf of, a third party with no reasonable explanation.

    To secure a loan, the customer purchases a certificate of deposit using an unknown source of funds, particularly when funds are provided via currency or multiple monetary instruments.

    Loans that lack a legitimate business purpose, provide the bank with significant fees for assuming little or no risk, or tend to obscure the movement of funds (e.g., loans made to a borrower and immediately sold to an entity related to the borrower).

    Changes in Bank-to-Bank Transactions

    The size and frequency of currency deposits increases rapidly with no corresponding increase in noncurrency deposits.

    A bank is unable to track the true accountholder of correspondent or concentration account transactions.

    The turnover in large-denomination bills is significant and appears uncharacteristic, given the banks location.

    Changes in currency-shipment patterns between correspondent banks are significant.

    Cross-Border Financial Institution Transactions242

    U.S. bank increases sales or exchanges of large denomination U.S. bank notes to Mexican financial institution(s).

    Large volumes of small denomination U.S. banknotes being sent from Mexican casas de cambio to their U.S. accounts via armored transport or sold directly to U.S. banks. These sales or exchanges may involve jurisdictions outside of Mexico.

    Casas de cambio direct the remittance of funds via multiple funds transfers to jurisdictions outside of Mexico that bear no apparent business relationship with the casas de cambio. Funds transfer recipients may include individuals, businesses, and other entities in free trade zones.

    Casas de cambio deposit numerous third-party items, including sequentially numbered monetary instruments, to their accounts at U.S. banks.

    Casas de cambio direct the remittance of funds transfers from their accounts at Mexican financial institutions to accounts at U.S. banks. These funds transfers follow the deposit of currency and third-party items by the casas de cambio into their Mexican financial institution.

    Trade Finance

    Items shipped that are inconsistent with the nature of the customers business (e.g., a steel company that starts dealing in paper products, or an information technology company that starts dealing in bulk pharmaceuticals).

    Customers conducting business in high-risk jurisdictions.

    Customers shipping items through high-risk jurisdictions, including transit through non-cooperative countries.

    Customers involved in potentially high-risk activities, including activities that may be subject to export/import restrictions (e.g., equipment for military or police organizations of foreign governments, weapons, ammunition, chemical mixtures, classified defense articles, sensitive technical data, nuclear materials, precious gems, or certain natural resources such as metals, ore, and crude oil).

    Obvious over- or under-pricing of goods and services.

    Obvious misrepresentation of quantity or type of goods imported or exported.

    Transaction structure appears unnecessarily complex and designed to obscure the true nature of the transaction.

    Customer requests payment of proceeds to an unrelated third party.

    Shipment locations or description of goods not consistent with letter of credit.

    Documentation showing a higher or lower value or cost of merchandise than that which was declared to customs or paid by the importer.

    Significantly amended letters of credit without reasonable justification or changes to the beneficiary or location of payment. Any changes in the names of parties should prompt additional OFAC review.

    Privately Owned Automated Teller Machines

    Automated teller machine (ATM) activity levels are high in comparison with other privately owned or bank-owned ATMs in comparable geographic and demographic locations.

    Sources of currency for the ATM cannot be identified or confirmed through withdrawals from account, armored car contracts, lending arrangements, or other appropriate documentation.

    Insurance

    A customer purchases products with termination features without concern for the products investment performance.

    A customer purchases insurance products using a single, large premium payment, particularly when payment is made through unusual methods such as currency or currency equivalents.

    A customer purchases product that appears outside the customers normal range of financial wealth or estate planning needs.

    A customer borrows against the cash surrender value of permanent life insurance policies, particularly when payments are made to apparently unrelated third parties.

    Policies are purchased that allow for the transfer of beneficial ownership interests without the knowledge and consent of the insurance issuer. This would include secondhand endowment and bearer insurance policies.

    A customer is known to purchase several insurance products and uses the proceeds from an early policy surrender to purchase other financial assets.

    Shell Company Activity

    A bank is unable to obtain sufficient information or information is unavailable to positively identify originators or beneficiaries of accounts or other banking activity (using Internet, commercial database searches, or direct inquiries to a respondent bank).

    Payments to or from the company have no stated purpose, do not reference goods or services, or identify only a contract or invoice number.

    Goods or services, if identified, do not match profile of company provided by respondent bank or character of the financial activity; a company references remarkably dissimilar goods and services in related funds transfers; explanation given by foreign respondent bank is inconsistent with observed funds transfer activity.

    Transacting businesses share the same address, provide only a registered agents address, or have other address inconsistencies.

    Unusually large number and variety of beneficiaries are receiving funds transfers from one company.

    Frequent involvement of multiple jurisdictions or beneficiaries located in high-risk offshore financial centers.

    A foreign correspondent bank exceeds the expected volume in its client profile for funds transfers, or an individual company exhibits a high volume and pattern of funds transfers that is inconsistent with its normal business activity.

    Multiple high-value payments or transfers between shell companies with no apparent legitimate business purpose.

    Purpose of the shell company is unknown or unclear.

    Embassy and Foreign Consulate Accounts

    Official embassy business is conducted through personal accounts.

    Account activity is not consistent with the purpose of the account, such as pouch activity or payable upon proper identification transactions.

    Accounts are funded through substantial currency transactions.

    Accounts directly fund personal expenses of foreign nationals without appropriate controls, including, but not limited to, expenses for college students.

    Employees

    Employee exhibits a lavish lifestyle that cannot be supported by his or her salary.

    Employee fails to conform to recognized policies, procedures, and processes, particularly in private banking.

    Employee is reluctant to take a vacation.

    Other Unusual or Suspicious Customer Activity

    Customer frequently exchanges small-dollar denominations for large-dollar denominations.

    Customer frequently deposits currency wrapped in currency straps or currency wrapped in rubber bands that is disorganized and does not balance when counted.

    Customer purchases a number of cashiers checks, money orders, or travelers checks for large amounts under a specified threshold.

    Customer purchases a number of open-end stored value cards for large amounts. Purchases of stored value cards are not commensurate with normal business activities.

    Customer receives large and frequent deposits from on-line payments systems yet has no apparent on-line or auction business.

    Monetary instruments deposited by mail are numbered sequentially or have unusual symbols or stamps on them.

    Suspicious movements of funds occur from one bank to another, and then funds are moved back to the first bank.

    Deposits are structured through multiple branches of the same bank or by groups of people who enter a single branch at the same time.

    Currency is deposited or withdrawn in amounts just below identification or reporting thresholds.

    Customer visits a safe deposit box or uses a safe custody account on an unusually frequent basis.

    Safe deposit boxes or safe custody accounts opened by individuals who do not reside or work in the institutions service area, despite the availability of such services at an institution closer to them.

    Customer repeatedly uses a bank or branch location that is geographically distant from the customers home or office without sufficient business purpose.

    Customer exhibits unusual traffic patterns in the safe deposit box area or unusual use of safe custody accounts. For example, several individuals arrive together, enter frequently, or carry bags or other containers that could conceal large amounts of currency, monetary instruments, or small valuable items.

    Customer rents multiple safe deposit boxes to store large amounts of currency, monetary instruments, or high-value assets awaiting conversion to currency, for placement into the banking system. Similarly, a customer establishes multiple safe custody accounts to park large amounts of securities awaiting sale and conversion into currency, monetary instruments, outgoing funds transfers, or a combination thereof, for placement into the banking system.

    Unusual use of trust funds in business transactions or other financial activity.

    Customer uses a personal account for business purposes.

    Customer has established multiple accounts in various corporate or individual names that lack sufficient business purpose for the account complexities or appear to be an effort to hide the beneficial ownership from the bank.

    Customer makes multiple and frequent currency deposits to various accounts that are purportedly unrelated.

    Customer conducts large deposits and withdrawals during a short time period after opening and then subsequently closes the account or the account becomes dormant. Conversely, an account with little activity may suddenly experience large deposit and withdrawal activity.

    Customer makes high-value transactions not commensurate with the customers known incomes.

    Potentially Suspicious Activity that May Indicate Terrorist Financing

    The following examples of potentially suspicious activity that may indicate terrorist financing are primarily based on guidance "Guidance for Financial Institutions in

    Detecting Terrorist Financing" provided by the FATF.243 FATF is an intergovernmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing.

    Activity Inconsistent with the Customers Business

    Funds are generated by a business owned by persons of the same origin or by a business that involves persons of the same origin from high-risk countries (e.g., countries designated by national authorities and FATF as non-cooperative countries and territories).

    The stated occupation of the customer is not commensurate with the type or level of activity.

    Persons involved in currency transactions share an address or phone number, particularly when the address is also a business location or does not seem to correspond to the stated occupation (e.g., student, unemployed, or self-employed).

    Regarding nonprofit or charitable organizations, financial transactions occur for which there appears to be no logical economic purpose or in which there appears to be no link between the stated activity of the organization and the other parties in the transaction.

    A safe deposit box opened on behalf of a commercial entity when the business activity of the customer is unknown or such activity does not appear to justify the use of a safe deposit box.

    Funds Transfers

    A large number of incoming or outgoing funds transfers take place through a business account, and there appears to be no logical business or other economic purpose for the transfers, particularly when this activity involves high-risk locations.

    Funds transfers are ordered in small amounts in an apparent effort to avoid triggering identification or reporting requirements.

    Funds transfers do not include information on the originator, or the person on whose behalf the transaction is conducted, when the inclusion of such information would be expected.

    Multiple personal and business accounts or the accounts of nonprofit organizations or charities are used to collect and funnel funds to a small number of foreign beneficiaries.

    Foreign exchange transactions are performed on behalf of a customer by a third party, followed by funds transfers to locations having no apparent business connection with the customer or to high-risk countries.

    Other Transactions That Appear Unusual or Suspicious

    Transactions involving foreign currency exchanges are followed within a short time by funds transfers to high-risk locations.

    Multiple accounts are used to collect and funnel funds to a small number of foreign beneficiaries, both persons and businesses, particularly in high-risk locations.

    A customer obtains a credit instrument or engages in commercial financial transactions involving the movement of funds to or from high-risk locations when there appear to be no logical business reasons for dealing with those locations.

    Banks from high-risk locations open accounts.

    Funds are sent or received via international transfers from or to high-risk locations.

    Insurance policy loans or policy surrender values that are subject to a substantial surrender charge.
     
    Last edited: Apr 1, 2008
    5 people like this.
  4. Apr 1, 2008
  5. Mousey

    Mousey Ueber Meister Mouse CAG

    Occupation:
    Pencil Pusher
    Location:
    Up$hitCreek
    I'll read through all this later... Gotta go to work...

    Thanks Rob!
     
  6. Apr 1, 2008
  7. GrandMaster

    GrandMaster Ueber Meister CAG

    Occupation:
    Mathematician by day, online gambler by night.
    Location:
    UK
    I understand that a secretive organisation, known as the Pentagon, has been sending billions of dollars to high risk jurisdictions such as Iraq and Afghanistan. Where do I report it?
     
    6 people like this.
  8. Apr 1, 2008
  9. RobWin

    RobWin closed account

    Occupation:
    Who knows?
    Location:
    A Vault!
    Yea, that's a good question there Grand and just about five minutes ago we (The US Tax Payers) have sent $507,472,246,309 Billion so far just to Iraq and the ticker keeps running You must register/login in order to see the link....:mad::mad::mad:
     
    1 person likes this.
  10. Apr 1, 2008
  11. bryand

    bryand Beach Bum PABnonaccred mm1

    Occupation:
    Legal
    Location:
    Just Across the Hudson River
    The US Government is "reverse-laundering" :D, we know where the money comes from but not where it all goes!
     
    1 person likes this.
  12. Apr 1, 2008
  13. Mousey

    Mousey Ueber Meister Mouse CAG

    Occupation:
    Pencil Pusher
    Location:
    Up$hitCreek
    Also remember that if we each had a relative in a foreign land, we could WU money or money orders with no problem. Hmmmm... anyone that owns a casino want to 'adopt' me?
     
  14. Apr 2, 2008
  15. pacers31

    pacers31 Banned Used - Repetitive violations of <a href="ht

    Occupation:
    Marketing Rep
    Location:
    Californication
    Well resident rodent, if you look like that mouse, all the cats will want to play with you!!
     
  16. Apr 2, 2008
  17. winbig

    winbig Keep winning this amount.

    Occupation:
    Bum
    Location:
    Pennsylvania
    I'll adopt you. As long as you change your avatar back to what it was earlier.
     
    1 person likes this.
  18. Apr 2, 2008
  19. Mousey

    Mousey Ueber Meister Mouse CAG

    Occupation:
    Pencil Pusher
    Location:
    Up$hitCreek
    You guys crack me up! :lolup:
     
  20. Apr 2, 2008
  21. RobWin

    RobWin closed account

    Occupation:
    Who knows?
    Location:
    A Vault!
    Please Mousey...change it back....:D
     
    1 person likes this.
  22. Apr 14, 2008
  23. Lisa10xxx

    Lisa10xxx Keno lover

    Occupation:
    self
    Location:
    Heart of America

    Ok, can you just give it to me in short version so I don't have to read all this? lol Thanks
     
  24. Apr 14, 2008
  25. RobWin

    RobWin closed account

    Occupation:
    Who knows?
    Location:
    A Vault!
    Sure Lisa...Just be careful what you do on the Net...LOL ;)
     
    1 person likes this.
  26. May 23, 2008
  27. GrandMaster

    GrandMaster Ueber Meister CAG

    Occupation:
    Mathematician by day, online gambler by night.
    Location:
    UK
    You can say that again: You must register/login in order to see the link..
     

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