Arrest of FinCEN employee for SARs disclosure
The US government has arrested an employee of FinCEN for providing copies of suspicious activity reports (“SAR”) illegally to the media.
SARs disclosure is illegal
SARs are required to be filed and submitted by certain reporting entities, such as banks, to FinCEN when the bank or its employees, have reasonable grounds to suspect that a financial transaction is associated with money laundering.
SARs contain invasively personal and private information of a person or a company and because they involve a subjective determination, can cause harm to a person or a business if filed without justification. As a result, the legislation protects the filer of the information and also protects the filing itself.
It is a criminal offence to disclose the filing of a SAR, or the contents of such, and on the other side, reporting entities such as banks that file are protected from law suits over wrongful filings to FinCEN. The reason for the protection in respect of banks is that they would not provide full disclosure if there was a possibility, however remote, that the public or the media would see a filed SAR. But that’s what happened here when a FinCEN employee provided multiple SARs to the media.
Endangers Lives of Bank Officers
The disclosure of a SAR could endanger the lives of bank employees and AML officers. That is because those of us in the AML field report real cases of serious criminality often involving organized crime and if not organized crime, then certainly criminal elements who may not hesitate to harm an AML officer in connection with a SAR. In this case, the FinCEN employee went so far as to disclose to the media that SARs were filed by Citibank’s AML officers over their client, the Embassy of Russia, which is the confidential business information of Citibank and the Embassy of Russia, and now places a risk on the AML officers of Citibank.
Saving of Terrorist Financing Reports
According to the criminal complaint, over the course of a year, the FinCEN employee, Natalie Edwards, provided SARs to a reporter and described the contents of several other SARs over Telegram. At first, she allegedly lied to the FBI and denied having supplied federal records to a reporter and then subsequently admitted it.
She is alleged to have saved 24,000 FinCEN files on a flash drive, including many SARs and records of a highly sensitive nature involving financial transactions of Iranian foreign nationals and terrorist financing of ISIS, the disclosure of which may adversely impact international security.