Criminality and suspicious activity reports

• Published in: Journal of financial crime 2017-07, Vol.24 (3), p.461-471
• Main Author: Axelrod, Robert Michael
• Format: Article
• Language: English
• Subjects: Confidentiality; Criminal investigations; Criminal procedure; Criminology; Feedback; Financial institutions; Immigration policy; Law enforcement; Money laundering; Regulation of financial institutions; Suspicious activity reports
• ISSN: 1359-0790; 1758-7239
• DOI: 10.1108/JFC-03-2017-0019

Purpose This paper aims to suggest alternative suspicious activity analyses to improve the focus of financial institution reporting to law enforcement and to identify some limitations in the current practice. Design/methodology/approach This paper employs the consideration of US and Financial Action Task Force policies and text sources of suspicious activity reporting in the anti-money laundering context in light of how the reports are used. Furthermore, there is consideration of confidentiality and privacy constraints on public and private sector in assessing strategies to make the reporting process more effective and aiding the discovery and investigation of crime. Findings The current suspicious activity reporting process takes advantage of the business acumen of financial institutions to identify unusual or unexplained behavior that may assist law enforcement in criminal investigations and prosecutions. It is successful in that regard. However, the process has not been tuned to identifying criminal behavior through systematic feedback. As an alternative to feedback, analysis of criminal organizations vis-à-vis the transactions that flow through a reporting institution is suggested as a means to creating better tuning. The analysis could be accomplished either by law enforcement or by select institutions; but in either case, hurdles of confidentiality and/or privacy would have to be overcome. Originality/value Creating a process for law enforcement and/or reporting institutions to map known criminal activity on a transaction set would allow a new assessment of the role of financial institutions in this regard, and may allow policymakers to reassess whether the financial institutions’ efforts currently required would be more productive if redirected to focus more on criminal as opposed to merely suspicious activity.