“Scenario One & Two” STRs working Committee DAB, Training Center بسم الله الرحمن الرحیم Suspicious Transaction Reports financial and suspicious Indicators that Financial Institutions use to Report STRs “Scenario One & Two” STRs working Committee DAB, Training Center

100 Case Examples From the Egmont Group The case examples demonstrate the role of indicators in pointing out suspicious activity. The cases also show the role of additional information from the filing institutions, law enforcement agencies and other sources to assist in FIU analysis. In the STRs working committee, we can discuss the sample STRs, indicators, analysis or any other related topics .

Scenario One A European FIU received two disclosures from two different banks. Shahad, a foreign national, had presented five bank cheques to be credited into his newly opened company account. He told the banks that the US$1,600,000 involved originated from land sales in an African country that had been undertaken by his real estate company. The banks disclosed to the national FIU in view of the scale of the transactions and the lack of supporting data given by Shahad. Investigations by the FIU established an interesting link to Shahad’s father. His father was serving a prison term in another country for fraud, espionage, corruption and other criminal activities. Shahad’s father had been sentenced to twelve years imprisonment after a foreign bank had collapsed as a result of a large-scale fraud that he had organized. A while after the initial disclosure, Shahad phoned his bankers to request meetings to discuss further investments by his company, and both institutions made rapid disclosures to the FIU to alert them to the impending meetings.

Scenario One FIU contacted the local police who placed Shahad under surveillance as soon as he re-entered the country. Shahad was subsequently arrested on money laundering charges. An exchange of information with the foreign country facilitated the preparation of criminal proceedings against Shahad on charges of criminal conspiracy, money laundering, and fraud. The foreign authorities also informed the FIU that Shahad’s father had amassed a sizeable fortune. He had re-invested this money into real-estate companies and financing enterprises registered in his own name, Shahad’s name and in the names of other family members. In the course of the investigation, Shahad’s house was searched. The police found numerous documents related to financial transactions performed by Shahad’s father. At time of writing, preparations for the trial were still ongoing.

Think of the Indicators Think of the Indicators? New customer attempting large transactions with no supporting rationale

Scenario Two Ahmad was a well-known customer of a European bank. On a number of occasions he purchased gold bullion from the bank in ingots of 1 kilo with the explanation that he was buying the gold to export directly to a foreign company. Ahmad transported the gold out of the bank by himself after each transaction. In a single year he purchased a total of more than 800 kilos of gold with a value of more than US$7,000,000. The gold was paid for by funds draw from his company account. The bank was also able to see that at regular intervals funds were transferred into the account from another company in a neighboring country, as one would expect. Is there any unusual action you can think? Or What is unusual? However, Ahmad’s actions in transporting the gold himself seemed unusual to the bank, Do you think the bank should file a STR base on the unusual action? and the bank officials decided to disclose their concerns to the national FIU. The FIU researched Ahmad and his company within various law enforcement intelligence databases, but no obvious link to criminality could be found. However, the scale of the gold purchases justified a formal investigation by the FIU, and further enquiries were undertaken.

Scenario Two These enquiries revealed that Ahmad was not in fact selling the gold to a foreign company as claimed. Before buying the gold, Ahmad always met with a foreign citizen named Sharif. Although they drove to the bank together in Ahmad’s car, Sharif never entered the bank. After Ahmad purchased the gold, they drove to Sharif’s car and hid the gold in the boot. Then Sharif drove back to his own country, crossing the border without declaring the bullion at Customs and therefore avoiding paying import duties. Once in his own country, Sharif handed the gold over to Rafiq, who delivered it to another company for sale on the open market. A proportion of the profits from the sale of the gold was transferred back to Sharif’s company, from which he drew the next tranche of funds to purchase more gold. The amount of additional profit generated by this simple tax evasion scheme was substantial. At the time of writing, criminal proceedings for money laundering in conjunction with tax evasion were being raised against Ahmad, Sharif and Rafiq. The smuggling operation was estimated to have caused tax losses to the government of some US$1,500,000. Because the proceeds from selling the smuggled gold were obtained illegally, the judicial authorities in the FIU’s country have also begun criminal proceedings against the individuals involved.

Think of the Indicators Think of the Indicators? Unwarranted high security risk – personal transfer of valuable asset