Pot banking, human trafficking
center stage at BSA Conference 2nd day

NOV. 17, 2015 -- Marijuana business banking and human trafficking were two top issues of discussion during the morning session of the second day of the NASCUS/CUNA Bank Secrecy Act (BSA) Conference Tuesday in Fort Lauderdale.

Timea Nagy, a victim of human trafficking herself in the sex slave trade, called credit union BSA officers “superheroes” because they have the power to curb human trafficking by reporting suspicious financial dealings to law enforcement.

“It's all about greed,” Nagy said of the human traffickers. “But you have the money, you can control it” and that really angers the traffickers, she said.

Nagy urged credit unions and other financials to be on the lookout for signs of human trafficking activities, which includes life style, who the account holder is, the type of businesses involved in transactions, the type of transactions involved, where the money is going, and who is ultimately profiting.

“Human trafficking is engaged in all kinds of businesses,” Nagy said, indicating there is no particular concentration of industry or trade. She noted those businesses could be as diverse as modeling agencies, travel agencies, employment agencies, au pair babysitting businesses and more.  “No one thing tells you human trafficking is going on,” she, noting that the indicator is a collection of patterns that indicate a trend.

Brendan Brothers of Verafin (a financial information security firm, which sponsored Nagy’s appearance) urged BSA officers to follow up with law enforcement when they file a suspicious activity report (SAR) that they believe involves human trafficking. “You are the first line of defense; you have the money, you have the control,” he said.

Earlier in the day, Braddock Stevenson of the Financial Crimes Enforcement Network (FinCEN) discussed his agency’s anti-money laundering efforts, but touched off a discussion with the audience when he broached the issue of how credit unions and other financials may offer banking services to marijuana businesses.

Stevenson told the group they should follow the “Cole memo” (a document issued by the Justice Department); consider factors such as particular business objectives of the business, evaluation of the risks, and capacity of the credit union to manage the risks, and; the type of marijuana trade the business is engaged in (limited, priority or “close”).

But a number of audience members noted that much of the guidance they have received to date has been confusing and ambiguous. Some said they felt as if they were being asked to police activities of their members. Others expressed frustration with how far they had to go in checking backgrounds of members and their businesses.

Stevenson – who had to cut short his program to address the many questions – remarked in closing his presentation that “I probably should have just done the whole thing on marijuana.”

The NASCUS/CUNA BSA Conference continues Wednesday (Nov. 18) at the Marriott Harbor Beach Hotel in Fort Lauderdale.

 

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