This report advances a number of “steps-forward” on how to more effectively combat money laundering.
- Congress should move legislation to end the abuse of anonymous shell companies by requiring beneficial ownership transparency.
- Congress should make all felonies predicate offences for money laundering.
- Congress should provide specific line item funding to the U.S. Trade Transparency Units (TTUs) so as to enhance their analytic capabilities and augment the personnel necessary to foster trade transparency in the United States and to expand the international TTU network.
- Congress should pass legislation which requires U.S. companies that engage in financial transactions to obtain a Legal Entity Identifier (LEI).
- Congress should pass legislation requiring transactional lawyers, and anyone else who forms legal entities, to carry out anti-money laundering due diligence.
- The U.S. should develop an updated anti-money laundering strategy to address new and continuing threats to the financial system.
- The U.S. should convene an inter-agency task force to adapt crime-fighting strategies to cover the use of mobile payment systems.
- The administration should require bidders for federal contracts and grants to publicly disclose their beneficial ownership information.
- The administration should adopt the Legal Entity Identifier (LEI), or a similar, non-proprietary and open system, that makes the hierarchy of entity ownership transparent, as the standard identifier in the federal procurement process.
Treasury Department and the Financial Crimes Enforcement Network (FinCEN)
- The Department of the Treasury, which leads the U.S. Financial Action Task Force (FATF) delegation, should introduce a resolution calling for members to promote trade transparency in order to combat trade-based money laundering and value transfer.
- Treasury should instigate a new rule-making process to strengthen due diligence requirements for financial institutions.
- FinCEN should be tasked with aggressive outreach to communities that rely on informal Money Service Businesses (MSBs). FinCEN should pre-empt state MSB licensing requirements and establish uniform licensing requirements that would be applicable to any company designated as an MSB/money transmitter in the United States.
- FinCEN should finalize the proposed rule to impose anti-money laundering (AML) and suspicious activity reporting requirements on registered investment advisers.
- FinCEN should re-examine each of the temporary AML exemptions to determine whether these exemptions are still warranted.
Department of Justice
- The Department of Justice should ensure that the top decision-makers at financial institutions, accounting firms, and law firms are held personally accountable for the actions of their organizations.
- Justice should change the incentives for law enforcement to encourage them to pursue complex financial crimes cases.
- Justice should provide specific funds for anti-money laundering/counter-terrorist finance (AML/CFT) training to the 93 U.S. Attorneys’ offices.
More information on the recommendations can be found in Section VII on page 19 of the full report.
The FACT Coalition would like to thank the Ford Foundation and the Wallace Global Foundation for their support for this report.
The FACT Coalition would also like to thank Clark Gascoigne (Deputy Director), Jacob Wills (Communications and Operations Associate) and Yaroslav Pustarnakov (Advocacy Intern) for their contributions to the report. FACT also appreciates the contributions of Liz Confalone and Heather Lowe (Global Financial Integrity); Mark Hays, Stefanie Ostfeld, and Eryn Schornick (Global Witness); Elise Bean; Jo Marie Griesgraber (New Rules for Global Finance); Susan Harley (Public Citizen); and Nathan Proctor (Fair Share).
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Copyright © 2017 The FACT Coalition. Some Rights Reserved.
This work by John A. Cassara and the FACT Coalition is licensed under a Creative Commons Attribution 4.0 License. To view the terms of this license, visit www.creativecommons.org/licences/by/4.0. The cover image is copyrighted, with all rights reserved.
The recommendations are those of the author and the FACT Coalition. The views expressed in this report are those of the author and the Coalition, and do not necessarily reflect the views of our funders, our members, or those who provided review.
Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promotes policies to combat the harmful impacts of corrupt financial practices. More information about the coalition can be found at the back of this report or on the FACT Coalition website at www.thefactcoalition.org.
John A. Cassara
John A. Cassara is a former U.S. intelligence officer and Treasury Special Agent. Mr. Cassara retired after a 26-year career in the federal government intelligence and law enforcement communities. He is considered an expert in anti-money laundering and counter-terrorist financing, with particular expertise in the areas of money laundering in the Middle East and the growing threat of alternative remittance systems and forms of trade-based money laundering and value transfer. He invented the concept of international “Trade Transparency Units,” an innovative countermeasure to entrenched forms of trade-based money laundering and terrorist financing. A large part of his career was spent overseas. He is one of the very few to have been both a clandestine operations officer in the U.S. intelligence community and a Special Agent for the Department of the Treasury.
His last position was as a Special Agent detailee to the Department of the Treasury’s Office of Terrorism Finance and Financial Intelligence (TFI). His parent Treasury agency was the Financial Crimes Enforcement Network (FinCEN), the U.S. Financial Intelligence Unit (FIU). He worked at FinCEN from 1996–2002. From 2002–2004, Mr. Cassara was detailed to the U.S. Department of State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) Anti-Money Laundering Section to help coordinate U.S. inter-agency, international, anti-terrorist finance training and technical assistance efforts
During his law enforcement investigative career, Mr. Cassara conducted a large number of money laundering, fraud, intellectual property rights, smuggling, and diversion of weapons and high technology investigations in Africa, the Middle East, and Europe for a variety of federal agencies. While assigned to the Office of the Customs Attaché in Rome, Italy, he directed the first truly international anti-money laundering task force, called Operation Primo Passo, (“First Step”). The innovative operation combated Italian/American organized crime by examining the movement of money between the two countries and represented an early use of financial intelligence to proactively initiate investigations. During his customs career, he also served two years as an undercover arms dealer. He began his career with Treasury as a Special Agent assigned to the Washington Field Office of the U.S. Secret Service.
Since his retirement, he has lectured in the United States and around the world on a variety transnational crime issues. He is a consultant for government and industry. Mr. Cassara has authored or co-authored several articles and books, including Hide and Seek, Intelligence, Law Enforcement and the Stalled War on Terrorist Finance (2006 Potomac Books) and On the Trail of Terror Finance – What Intelligence and Law Enforcement Officers Need to Know (2010 Red Cell IG). In 2013, his first novel was released – Demons of Gadara. Trade-Based Money Laundering: The Next Frontier in International Money Laundering (Wiley) was released in November, 2015.
Further information – including specific recommendations on how to improve AML/CFT enforcement – is available at www.JohnCassara.com.