These reports come from more than 80,000 financial institutions and 500,000 individuals who maintain foreign bank accounts.
FinCEN makes this information available to law enforcement and other government authorities for use in criminal, tax and regulatory investigations and proceedings and in intelligence and counterintelligence activities to protect against international terrorism.
At first glance, the FinCEN data would appear to be unrelated to the central question of whether there was collusion to influence the outcome of the 2016 presidential election.
While no evidence has been released to date that bears on this question, there are good reasons to think that House investigators and Special Counsel Robert Mueller will look closely at the FinCEN data to determine its relevance to their investigations.
How might FinCEN data be relevant?
(The Trump Taj Mahal Casino was assessed a civil money penalty by FinCEN in 2015 for willfully violating the Bank Secrecy Act’s program, reporting, and recordkeeping requirements from 2010 through 2012. Many of these violations were cited by the Internal Revenue Service in previous examinations of Trump Taj Mahal dating back to 2003. It is not publicly known whether any of the activity related in any way to the subject of the current investigation.)
US money laundering laws
There are two primary types of money laundering laws in the United States: (1) laws that make money laundering itself a crime, found in title 18 United State Code Sections 1956 and 1957; and (2) laws that assist in the investigation and prosecution of money laundering, terrorist financing, and other criminal activity, found in Title 31 United States Code Section 5311 and implementing regulations (also known as The Bank Secrecy Act or BSA), including requirements to report large currency transactions, suspicious activity, foreign financial accounts, and high-end residential real estate transactions.
The Money Laundering Statutes
Broadly speaking, under the criminal money laundering statutes, it is a crime for any person to engage knowingly in a financial transaction with knowledge that the transaction involves the proceeds of criminal activity. The courts have interpreted knowledge to include actual knowledge and willful blindness — deliberately avoiding gaining knowledge when faced with a high likelihood of criminal activity, i.e.,ignoring red flags of suspicious activity.
For example, if a US person were to accept payment for a condominium with knowledge that the source of the funds used in the transaction was derived from some form of criminal activity, then that person potentially could be charged with violating the money laundering statutes.
The Bank Secrecy Act
The Bank Secrecy Act requires certain financial institutions (for example, banks, broker dealers, and casinos) to develop, implement and maintain anti-money laundering compliance programs. Financial institutions also are required to file a number of reports and maintain a variety of records, including currency transactions reports on cash transactions over $10,000 (CTRs) and suspicious activity reports (SARs).
SARs generally must be filed when a financial institution knows, suspects or has reason to suspect that a transaction: (1) involves money laundering activity or a violation of the Bank Secrecy Act, including structuring of transactions to evade the CTR requirement; (2) has no business or apparent lawful purpose or is not the sort of transaction in which the particular customer would normally be expected to engage; or (3) involves the use of the financial institution to facilitate criminal activity.
All persons, including financial institutions, other legal entities, and individuals, are required to file an annual report of their foreign financial accounts if the aggregate value in the accounts at any time during the calendar year exceeded $10,000 (FBARs).
Reporting of high-end real estate purchases
These areas include all of the boroughs of New York City; the counties of Miami-Dade, Broward, and Palm Beach in Florida; the counties of Los Angeles, San Diego, San Francisco, San Mateo, and Santa Clara in California, and the Texas county of Bexar (San Antonio).
“[I]n terms of high-end product influx into the United States, Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York. We see a lot of money pouring in from Russia.”