New York City investigators are concerned that several start-up companies selling mobile payment products may be giving criminals an easy means to defraud banks and individuals.
A U.S. Treasury Department rule finalized in 2011 has prompted foreign money services businesses to incorporate affiliates in the United States in an effort to retain access to American banks.
The world's top financial crime watchdog Thursday disclosed revisions to its blacklists and its widely-cited standards on combating money laundering and terrorist financing.
Last year's failed Times Square car bombing has been the chief impetus behind a recent U.S. Treasury Department's initiative to identify unregistered money services businesses and hawala networks, according to sources.
A Manhattan court Wednesday indicted a New York man for allegedly transferring money illegally to Faisal Shahzad, the 31-year-old man who attempted to detonate a homemade bomb in Times Square.
A New York court convicted a former executive of a prominent management consultancy of helping transfer $3.4 million into Iran through the informal exchange system known as hawala.
That mobile banking and cell phone remittances are drawing people into the formal global financial system is more an opportunity than a compliance problem, according to Jean Pesme.
Mobile payments with little or no bank involvement are highly vulnerable to money laundering, terror finance and other criminal abuse, according to Bank Secrecy Act compliance officers and attorneys.
A U.S. Treasury Department proposal that would potentially apply U.S. anti-money laundering regulations to hundreds of thousands of foreign money services businesses would be virtually "unenforceable," according to compliance consultants.
The U.S. Financial Crimes Enforcement Network issued a report as required under section 359 of the USA Patriot Act addressing the complexities of these systems and providing information for law enforcement and financial institutions.