Wednesday, March 12, 2008

Bank Scrutinize Even Routine Transactions

Federal investigators have been looking into money transfers made by New York Gov. Eliot Spitzer, who's been tied to a prostitution ring. Bank officials noticed frequent cash transfers from several accounts and it triggered a money laundering investigation. Banks use software to spot patterns in routine transactions.

The Irony cannot get any better than this.
You need to listen to this, its classic stuff.

The general thinking has been for some time that if you spend less than 10K it wont get reported to the Feds. People have been doing this for years. Its how some people smuggle/launder money into other countries, by simply carrying LESS than 10K on airplanes or by transferring less than 10K into accounts. Turns it takes far less to raise suspicion's.

Most do not know that every transaction you make no matter how mundane it may be, is tracked by your bank. From simple things like buying coffee and donuts to buying a stereo.

Banks monitor everything and give it a score. There is a company that sells this software to banks. Banks monitor your transactions based on your profile. Yes banks profile you. They take what you make per year, your credit score, where you live, where do you come from, who do you associate with, are you on a terror watch list, are you on list of felons and your transaction patters into consideration and give every transaction you do a score, from 0 to 100. Its an effort to stop money laundering, which people that do these things do so in small transactions sometimes.

Part of the implementation process includes giving specific scrutiny to the PEP List (Politically Exposed Peoples List). These people are anyone from foreign leaders with US accounts to Senators. These people are actually monitored more closely.

This was all implemented apparently within the last 10 years. Particularly following 2001. Some of it has to do with 9/11 and the patriot act mandating it but a large amount stems from the Attorney General of New York in 2001, forcing/mandating that wall street banks monitor account transactions.

Guess who the Attorney General for New York was in 2001! LMFAO...
Elliot Spitzer's

Spitzer was brought down by his own mandate as AG.
I could not help but to laugh on the way to work this morning hearing this.

No comments: