FinCen Files: Thousands of suspicious activity reports leaked

Israeli companies and individuals appear in leaked documents submitted to the U.S. Congress as part of the investigation into alleged Russian intervention in the 2016 elections. Even if they’ve done nothing wrong, the implications could be far-reaching

Israeli companies and individuals appear in leaked documents submitted to the U.S. Congress as part of the investigation into alleged Russian intervention in the 2016 elections. Even if they’ve done nothing wrong, the implications could be far-reaching

Israeli companies and individuals appear in leaked documents submitted to the U.S. Congress as part of the investigation into alleged Russian intervention in the 2016 elections. Even if they’ve done nothing wrong, the implications could be far-reaching

Uri Blau, Washington

Photo: ICIJ

September 20, 2020

Summary

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sraeli companies, banks and individuals appear in financial intelligence reports submitted to the U.S. Treasury Department and subsequently leaked. The documents, known as Suspicious Activity Reports (SARs), are a record of suspicious financial activities that monetary institutions around the world are required to report to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).

FinCEN is responsible for collecting information on suspicious financial activity that could turn out to be money laundering, funding for terrorism and the like. Its Israeli counterpart is the Justice Ministry’s Israel Money Laundering and Terror Financing Prohibition Authority.

The leaked SARs were submitted to the U.S. Congressas part of the investigation into alleged Russian intervention in the 2016 U.S.presidential election. Originally leaked to BuzzFeed News, the reports were then passed on to the International Consortium of Investigative Journalists (ICIJ), which, in turn, shared them with more than 400 journalists from 108 media outlets worldwide, including America’s NBC network, the BBC in the United Kingdom, Le Monde in France, Italy’s L'Espresso, Germany’s WDR and NDR networks. Shomrim ,The Center for Media and Democracy, and the writer of this piece are members of the ICIJ.

The thousands of leaked SARs were compiled between the 2000 and 2017 and constitute just a very small proportion of the overall number of reports submitted during that period. In 2019 alone, for example, the U.S. Treasury’s FinCEN received more than 2.7 million SARs from more than 12,000 financial institutions worldwide

BuzzFeed did not disclose the source of the documents, but in January this year, former FinCEN employee, Natalie Mayflower Edwards pled guilty to "conspiring to unlawfully disclose Suspicious Activity Reports." According to the 18-page criminal complaint against Edwards, 41, authorities listed nearly a dozen stories published by BuzzFeed over the course of a year. She is due to be sentenced next month.

The thousands of leaked SARs were compiled between the 2000 and 2017 and constitute just a very small proportion of the overall number of reports submitted during that period. In 2019 alone, for example, the U.S. Treasury’s FinCEN received more than 2.7 million SARs from more than 12,000 financial institutions worldwide. One of the problems exposed by the leak is the fact that the U.S. authorities simply don’t have the resources to monitor and analyze data of such proportions. FinCEN has a staff of around 300 employees who have the task of analyzing more than 50,000 reports on average per week.

Photo: ICIJ

It’s important to stress that the submission to FinCEN of a SAR doesn’t mean that the individual or company mentioned in the document has done anything illegal. The transactions to which the report refers could be part of totally legitimate business activities that were carried out in a manner that aroused the suspicion of the financial institution that reported them. As far as is known, very few reports lead in the end to an investigation. Nevertheless, even without the criminal aspect, the reports offer a fleeting glimpse of a world of information that the general public is unaware of. They document transactions to the tune of some $2 trillion ($2,099,555,207,548.47 to be precise), with some of the leaked reports spanning hundreds of pages and including sensitive financial information about individuals and companies, and others referring to irregular transactions involving extraordinary sums of money.

In many instances, the reports include detailed records of money transfers, including account information, addresses and the reasons given for the transfer, along with information about the companies involved, including the respective company’s beneficiaries. This information is particularly interesting because it can’t always be found in public records of companies, especially those registered in tax havens. The banks, however, have this information because account holders are required to undergo a process known as Know Your Customer (KYC) and disclose it.

The SARs also sometimes include correspondence between banks, including Israeli institutions. Referred to in the leaked documents as "field reports," the correspondence consists primarily of questionnaires the banks are required to complete about customers involved in suspicious activities.