Chicago Chapter—The Convergence of Fraud and AML

On March 25, 2011, the Chicago Chapter of the Association of Certified Anti-Money Laundering Specialists (ACAMS) hosted a learning event featuring a topic very familiar to the financial services compliance community: the convergence of fraud and Anti-Money Laundering (AML). The event was developed to address program challenges facing both fraud and AML compliance officers and the importance of developing risk-based approaches to strengthen banks’ prevention initiatives. Brendan Brothers, a co-founder of Verafin, a fraud/AML Information Technology solutions provider, was the event presenter, and Citizens First National Bank located in the Chicago suburb of Plainfield, IL hosted the event.

Brothers’ presentation was timely in highlighting the ongoing need for collaboration and improved efficiency in the leverage of anti-fraud, AML and IT resources, specifically due to the overlap of patterns and trends particular to each area. Special attention was given to both old and new trends in financial crimes particular to fraud-based activities that have direct impact on the identification, monitoring, investigation and reporting of suspicious activity within the AML context. Brothers shared historic data as well as case studies on fraud/AML integration, covering topics such as: behavior-based vs. intelligent behavior-based transaction monitoring; benefits of integrated anti-fraud and AML compliance initiatives; and building a “FRAML” program. Brothers also spoke on a number of fraud “hot topics” including: debit card fraud, identity theft, elderly abuse, check kiting and wire fraud. Of particular note was the discussion of Chip-and-PIN, or EMV security card features, being introduced globally, and the impact of the perceived lag of U.S. institutions in implementing the latest anti-fraud technology for card programs. Several card-fraud scenarios as well as measures to detect and prevent card-based crime were also discussed.

Dialogue among the event attendees was enlivened, given the relevance and impact of the material. Workshop attendee Jodie Larson, AVP of Bank Operations & BSA/Compliance & Security Officer for Sauk Valley Bank offered the following comment: “I was impressed with…the (approach) that Verafin has to offer. As the industry moves forward, … (t)he slogan of ‘A Step Ahead’ couldn’t be more appropriate.”

The Chicago Chapter is continuing to develop a host of learning events, including the upcoming:

“Terrorism Financing—How the U.S. Fights Terrorism by Tracking Assets,” taking place on Friday, June 10, 2011, featuring the return of guest speaker Thomas Moriarty, Special Investigator with the U.S. Attorney’s Office and Patricia Nevin, Internal Revenue Service—Criminal Investigations Special Agent.

Additional AML presentation topics for the remainder of 2011 are in various planning stages. The Chicago Chapter board invites ACAMS members visiting from outside the Chicagoland area to drop in on its learning events when the opportunity arises. For more details on past and future events, refer to the Chicago Chapter website at: http://www.acams.org/chicago-chapter/

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