Financial Crime: Money Laundering
U.S. authorities estimate that money laundering has grown from about $85 billion in 1990, to over $1 trillion to $1.5 trillion today. Only $1 billion - $2 billion of this amount is detected and seized annually by authorities. Treasury officials estimate that 99% of criminal/terrorist money presented for laundering is successfully deposited. The identity verification requirements of the Patriot Act are directed toward stopping these deposits by entities with bogus identities. Tens of thousands of financial institutions in the United States are required to comply with federal and state laws & regulations aimed at thwarting the introduction of laundered funds into the U.S. banking system. Non-compliance with these regulations, including the Bank Secrecy Act of 1970, the Money Laundering Control Act of 1986, the Anti-Drug Abuse Act of 1988, the Annunzio-Wylie Anti-Money Laundering Act of 1992, the Money Laundering Suppression Act of 1994, and especially the anti-terror Patriot Act of 2001, can expose a financial institution to severe criminal and civil sanctions and fines, including the withdrawal of an institution's operation license. The Patriot Act also imposes identity verification requirements on foreign banks doing business in the U.S.
Sentinel helps prevent Money Laundering by assisting you in identifying persons who have been involved in financial crime, narcotics or are associated with high risk individuals. For more information on Money Laundering see Wikipeida's article on the subject.
According to Ernst & Young, more than 500 million checks are forged annually, resulting in losses in excess of $10 billion. Additionally, an institution's inability to verify the identity of customers can also make the institution susceptible to credit card fraud, mortgage and loan fraud, securities fraud and insurance fraud. Unlike money laundering, fraud results in a direct and instantaneous loss to the targeted financial institution.
Terrorist Financing (CFT)
Counter Terrorism Financing (CTF) is a set of anti-money laundering rules and sanctions put in place by governments that require institutions to verify that customers are not using funds to support named terrorist organizations. CTF rules often focus on non-profit and charitable organizations as they have historically been used to fund terrorist organizations.
For more information on Terrorist Financing see Wikipeida's article on the subject.