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Comment by syspec | Hacker News Reader

> In a statement released earlier this month FinCEN condemned the disclosure of the leaked documents and said it had referred the matter to the US Department of Justice.

> “The Financial Crimes Enforcement Network is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed suspicious activity reports (SARs), as well as other sensitive government documents, from several years ago,” it stated.

> “As FinCEN has stated previously, the unauthorised disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports

Government response: Punish the leakers

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I work at a bank, and we get training on this regularly.

One of the main reasons FinCEN requires strict confidentiality on SARs is to not tip off the account owners that they're being watched/investigated.

Investigators will often monitor the accounts to gather enough evidence to prosecute them or to gain intel into broader criminal networks. Regulators also rightfully don't want money launderers to know the playbook and tactics they use to track down these networks.

The secrecy also protects bank employees. If you're a compliance department worker that's reporting on potential criminal activities of terrorists or a criminal network to the authorities, and you think there's a risk you'll be outed, you might be less willing to submit the SAR.

This a regulator leaking the data.

Not a bank employee leaking the data.

Why would they leak it? Cause they know the system is fubar.

The simple question to ask is how many people are needed to monitor the system.

Now you have one clown after another saying the banks file zillions of reports every day.

Thats not the issue. Someone has to monitor all that.

And when that someone realizes they arent making a dent, given the volumes, they get sick of the pointlessness and leak the DB.

This is going to keep happening. Swiss leaks, Panama papers, libor etc etc

We have learnt how to scale things up over the last 20 year exponentially.

But oversight can't scale exponentially.

It's unsustainable and pressure will build to ridiculous levels on regulators and law enforcement.

SARS get generated all the time. Any large movement of cash will generate a SARs. That multi million dollar wire from an escrow account after your startup had liquidity event generated a SARs. What do you think the false positive rate of a SARS report it? 99%? 1 out of 100 SARS reports are actual criminal activity.

> Any large movement of cash will generate a SARs.

No. It will generate a CTR. It may generate a SAR.

I should clarify, any large transfer to an individual that hasn’t demonstrated access to large amount of capital will generate a SARS. If your not a private client at your bank and you get a $10mm wire will more than likely will generate a SARS and lots of phone calls from the compliance dept at the bank. That like the text book definition of a suspicious transaction. Low balance accounts getting large transfers.

absolutely no doubt that this is a feature of the system.

I recently read "Treasure Islands: Tax Havens and the Men who stole the world" and can't recommend it highly enough. It shows that tax fraud and offshore banking is despite propaganda that "it's dead" very much alive and the US is a central player now. Hollywood still uses Switzerland and the Cayman's but a lot more convenient are setups involving Nevada, New Mexico, etc.

Offshore banking is a key component in maintaining control when an empire retreats/collapses. The French installed puppets in Gabon who let them launder their money until today in a similar fashion that the City of London and the more reckless jurisdictions (BVI) allowed the Brits to keep their loot which they stole in the past 200 years.

we had a chance to burn all this to the ground during the financial crisis but Occupy Wallstreet was just a "leaflet campaign" without teeth. You don't fight a real enemy that subverts the rules of democracy with democratic tools.

https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_a...

> You don't fight a real enemy that subverts the rules of democracy with democratic tools.

I think you meant to write something like:

You don't fight a real enemy that subverts the rules of democracy with subverted democratic tools.

Apparently North Dakota is the new hotness for hiding cash and avoiding taxes.

https://www.theguardian.com/world/2019/nov/14/the-great-amer...

Looks like South Dakota.

I think FinCEN's position here makes sense. SARs are supposed to be filed broadly and freely, without liability to the filer, in order to allow regulators to build and understand patterns of behavior. They're "suspicious activity", not "unambiguously bad activity". So from FinCEN's perspective, this is like a leak of confidental police reports - filing reports doesn’t make someone bad, and nobody's going to make the reports if law enforcement doesn't go to bat for the confidentiality!

Seriously. If the reports are “years old” then there is no excuse for these to not have been dealt with.

Who is saying these haven't been dealt with? Filing a SAR doesn't mean the person is guilty, as the name indicates it's just suspicious.

I dunno, but

Collateral Damage, Snowden panama papers...

Imagine if they spend 10% of resources that they spent going after leakers punishing real perpetrators.

They may be going after the real perpetrators.

If they are, they probably don't want the perpetrators to know how much information they have.

If so, their cases may have just been blown apart by these leaks, and the perpetrators are even less likely to get persecuted.

I could dig it up, but there was a leak about ten years ago where literally thousands of high wealth individuals were caught out hiding money from the IRS. And a a large US money manager was found to be helping thing them.

What happened?

Some people had to pay fines. The company paid a small fine with no charges filed. Leaker went to prison.

The system is completely corrupt.

They may, If they are, if so... but extremely doubtful given the history of prosecuting white collar crime in this and other countries.

Didn't we have many financial crime leaks this past decade with essentially no repercussions?

It seems to be widely believed that nothing came from the Panama Papers, but I think that's only because people hoped to see some CEOs perp-walked to a waiting cop car. There certainly have been repercussions.

>Twenty-three countries have already recovered at least US$1.2 billion in taxes, heads of government implicated in corruption or tax avoidance have resigned or faced prosecution and there have been investigations in at least 82 countries. Mossack Fonseca, the law firm at the centre of the story, has shut down and the Panama Papers have prompted high-level political debates and expedited policy reforms around the world

https://www.transparency.org/en/news/three-years-after-the-p...

How big of a proportion do you think that 1.2 billion is when compared to total amount of taxes avoided? I'd be willing to bet less than 1%. The company that was center of the documents no longer exists... and ctrl+f this wiki https://en.wikipedia.org/wiki/Reactions_to_the_Panama_Papers it seems only one person from Venezuela was arrested (and his mom, but she was allowed to go home due to health reasons).

So it seems what I said is still correct... almost no repercussions for white collar crime across the globe. I'd bet it still occurs rampantly.

They... do? That’s what FINCEN is.

SARs are just spam. There is nothing to deal with. Its an odd name for a receipt that gets printed at the bank's discretion.

Can I just ask...WTAF are you talking about? Because you sound like a troll.

That a suspicious activity report is not indication of a crime, anything suspicious, and a lot of them get filed many times automatically

I would appreciate if you could point to some actual data (number of SARs per year in country, false positives...).

In 2019 for example, the US had 2.7 million SAR filings. (https://www.fincen.gov/reports/sar-stats, all industry types + year 2019 + all states), compared to a touch above 5,000 white collar federal prosecutions (https://www.cbsnews.com/news/white-collar-crime-prosecutions...). It's hard to directly calculate a "false positive rate" from those things, because some criminals may generate multiple SARs and others may simply go unprosecuted, but I think such a vast gulf is pretty inconsistent with an idea that most SARs report crimes.

It's certainly conventional wisdom in financial circles that a SAR is worth about as much as a user report on a Reddit comment.

I just don't find your cognitive dissonance to be relevant.

You’re asking for something to be proved - or supporting evidence that requires a whole dissertation - because your exposure is starting from a position that is fundamentally wrong.

“Suspicious” is a misnomer referring to an automatic reporting threshold, that in fewer additional circumstances allows for discretion in filing. The end.

> from a position that is fundamentally wrong

I’m baffled how asking for data is revealing my position?

I had the hope that your position is well founded and it would be easy to point to actual data.

I hardly believe that the compliance laws are not accompanied by studies that collect the data that i asked for. So it should be out there.

Like I said, I dont find your cognitive dissonance relevant enough to want to do that research for you. If you do research it, I hope the filter bubble Google put you in lets you get access to this version of reality.

Good luck.

SARs are just spam. There is nothing to deal with. No different than an oddly named receipt.

If it's "just spam" couldn't they be evaluated and closed quickly and thus become a non-issue for leakers?

It's very much like a mafia investigation. (In some cases it may well be a mafia investigation!) Most of the individual details you get are unreliable, insufficient, or just don't matter very much - but that doesn't mean there's no harm in leaking a list of them.

yes, they are a non-issue. you answered your own question. they are evaluated as spam. this leak is as dumb as you are close to thinking it is.

I’m not sure why you think this is unreasonable.

It’s financial crimes. If someone leaked investigational records of say, the FBI, while they are investigating an extortion ring, that could seriously compromise any prosecution.

Seems reasonable to me to punish someone leaking information that was meant to be private.

Government response: Stop spamming us with SARs

> that can impact the national security of the United States

National security...

Seems China practiced this excuse so well that US decides to copy that...

Well, yeah. The leaker signed an NDA. You of course take the risk that you will be punished by the NDA’s consequences that you sign unless you are using whistleblower statutes. That’s the whole point of the NDA.

Edit: you don’t publish your company’s proprietary source code and then expect you just walk away right? You’d be sued into oblivion. It’s important that people abide by their agreements. Whistleblower statutes exist to ensure protection when fraud, abuse, or other illegal activity occurs. I’m not clear if this actually meets that standard.

What's you're point? This is a normative discussion. The presence of NDAs says nothing about what is morally correct. For example, Harvey Weinstein systematically used NDAs to silence his victims and cover up his violent crimes.

This is just BS. Hiding a crime behind an NDA doesn't mean it should be illegal to tell about that crime.

That’s why I mentioned the whistleblower statutes. SARs are not crimes. They are potentially suspicious activity. If there is a crime not being reported after collection of these SARs then blow the whistle. No reason to leak a bunch of them unless you believe the collection of such data to be illegal in the first place (it’s not).

For what it’s worth, the problem is that most folks don’t know what SARs are, when they’re filed, etc. This is basically the equivalent of leaking a bunch of private banking records that banks have to provide to the government, not “leaking hidden crimes that nobody stopped”

not only shouldn't it be illegal, it probably isn't while the NDA might be illegal (and be evidence of conspiracy)

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