Premier Alliance Group, Inc. is a business and technology consulting firm focused on providing solutions for Fortune 2000 companies in the areas of regulatory, compliance, business performance, transformation, and information management.
Under the U.S. Bank Secrecy Act (BSA) and certain modifying provisions of the Patriot Act, banking institutions must report daily aggregate transactions in excess of $10,000 for any customer and any suspicious activity appearing to be an attempt to evade the reporting requirement. Compliance is part of what Premier does for bank clients. The 2010 upsurge in fines levied by the government and increases in drug-money laundering with prepaid cards may soon drive even more business to PIMO.
As recently noted by Deloitte Touche on their website, “Today, it is not uncommon to see the Justice Department and regulators announce multi-million dollar criminal or civil fines… the number of annual federal banking fines for AML violations rose by nearly fourfold in 2010, while the total dollar amount of the monetary penalties rose to over $660 million.”
This is strong incentive for banks to beef up compliance efforts with services like Premier’s.
Pacific National Bank of Miami, Florida was stung in late March with $7 million in fines related to anti-money laundering provisions of the BSA. Such fines don’t always mean the institution was consciously aiding in money laundering. Often, internal surveillance systems simply failed to detect suspicious activity, and that’s where Premier fits in.
In the past year, a new problem has emerged concerning drugs, money, and terror, capturing the acute attention of Senate investigators. Drug cartels have lately started to use prepaid cards to funnel money from U.S. drug sales back into Mexico and other countries. Federal law requires declaration of cash sums greater than $10,000 on leaving the U.S., but exempts ‘stored value’ instruments like prepaid cards, which can be redeemed by anyone, anyplace, without identification.
This may soon change, not only tightening the noose of law around criminals, but also around issuing convenience stores and banking institutions. Demand for change has lately been made by law enforcement and U.S. senators.
Senior U.S. Immigration and Customs Enforcement agent John Tobon recently stated, “Law enforcement loses lives all over the world trying to keep [major criminals] unbanked, and these prepaid cards are offering them a great alternative to sneak into our financial system.”
Official estimates of the amount of drug money going into Mexico exceed $20 billion annually.
U.S. Senators Dianne Feinstein, Charles Grassley, and Sheldon Whitehouse recently urged Treasury Secretary Timothy Geithner to crack down on prepaids by drafting new rules covering them. As such rules move into effect, Premier is likely to benefit considerably from a much-expanded market.