The expansion of the Financial Crimes Enforcement Networks’ focus on all-cash real estate purchases has been successful in uncovering suspicious activities and possible money laundering, the network’s acting director, Jamal El-Hindi, said Monday.
Speaking at NAFCU’s Congressional Caucus, El-Hindi said, FinCEN expanded the geographic scope of its all-cash reporting system earlier this year.
Originally, FinCEN required title companies to identify the natural persons behind shell companies that purchase high-end real estate without mortgages in Miami and Manhattan.
The expansion implemented the same requirements in all five boroughs of New York City, Miami-Dade County and the counties directly north of the county, Los Angeles County, San Francisco, San Diego and San Antonio, he said.
FinCEN has found such purchases to be highly vulnerable to criminal activity, El-Hindi added.
He also said that FinCEN recently issued an advisory warning financial institutions about the growing number of e-mail fraud schemes in which criminals obtain funds through fraudulent wire transfers.
Reports of suspicious activities by credit unions made up 12% of all reports between 2012 and 2016, El-Hindi said.
El-Hindi declined to address the specific threat that Russia might pose to financial institution stability, since Russia already has been implicated in the hacking of political party e-mail systems.
Also on Monday, Brian Peretti, the acting director of the Treasury Department’s office of critical infrastructure protection and compliance policy, stressed the need for financial institutions to share information about cyber threats.
He also said, “Financial institutions must make sure they conduct a detailed cybersecurity evaluation of third-party vendors they use,” adding that the institutions should not rely on assurances provided by vendors.
Peretti also said the cybersecurity insurance market is still small, but added that simply filling out an application for such insurance may help credit unions identify areas that are vulnerable.
