FBI: Foreign bribery, kleptocracy and high level money laundering

Patrick Killeen, Unit Chief-International Corruption Unit, FBI

Below is an insight into what can be expected from Patrick’s session at Fraud and Financial Crime Europe 2023.

The views and opinions expressed in this article are those of the thought leader as an individual, and are not attributed to CeFPro or any particular organization.

Why is there an expansion of collaboration amongst law enforcement agencies globally? What are the benefits?

As criminal investigation and threat mitigation have evolved over time, the most notable aspect of this evolution is the more consistent incorporation of outside agencies’ resources and input. It’s obvious that technology has created a world in which we are all virtually “closer” to one another, including criminal and threat actors’ proximity to illicit opportunities and potential cooperating subjects.  This aspect has required interactions between law enforcement agencies, both domestically and beyond borders, to counter the threats and violations presented effectively. The factors that require foreign cooperation include the complexity of laws and investigative regulation in respective jurisdictions, access to critical information and evidence in a respective nation, and institutional intelligence and equities.  For example, a bribery investigation can be primarily based on an overt act occurring in one country, but with international wires and foreign actors/institutions included in the set of facts, an investigation into the matter would be incomplete and likely difficult to prove in a court of law sans assistance of foreign partners.  Not only is the assistance of foreign partners critical in the aspect of evidence acquisition but established and enhanced relationships also allow for expedited actions, helping counter the time limitations presented by criminal statutes.

Why is collaboration important to trace illicit funds?

In the pursuit of financial information tied to international criminal investigations, working relationships with foreign partners, often multiple partners within each jurisdiction, are critical to success.  In a global financial system, illicit money and assets can quickly move across borders and often are stored in secretive or bureaucratically intense jurisdictions, severely complicating investigations into underlying acts and associated funds.  While obtaining financial information related to investigating criminal acts and identification for seizure/forfeiture can be an arduous process for any investigative entity, collaboration amongst agencies often creates the best opportunities for success.  These opportunities include simple access to information for one of the collaborating partners, institutional resources and pedigree related to complex international financial matters, and the most relevant and effective laws and penalties. In a phrase, an investigation into international illicit funds, without the assistance of foreign partners, will consistently “Hit a dead end.”  While law enforcement agencies in the United States have an advantage regarding illicit finance cases due to the prevalence of the US Dollar, without the assistance of foreign partners in the tracing and seizure of those illicit funds that may have passed through, or are currently located in their respective jurisdictions, the cases would likely be minimally effective.

How can financial institutions ensure that they are effectively training staff regarding foreign bribery and theft?

In their respective missions to identify and mitigate transactions tied to foreign bribery and theft, financial institutions face many of the same obstacles as law enforcement partners.  Criminal conspiracies, along with the methods used by the subjects, continuously evolve and exploit system and institutional weaknesses, often through the leveraging of technology.  This causes financial institutions and investigators to strive to “keep up” with innovative activities on the part of criminal actors, an almost unattainable fete.  In order to best address this challenge, financial institutions, and law enforcement agencies must maintain consistent communication regarding observations of new and inventive schemes and methods, providing broad awareness and enabling the determination of mitigation strategies from a larger population of material authorities. Illicit financial transactions relating to bribery and theft, especially in relation to money laundering, often correlate with transactions tied to other illegal acts, including narcotics trafficking and terrorism.  The true goal for a criminal actor is to conceal or obfuscate a transaction to a level where scrutiny is either difficult or impossible.  All partners must continuously strive to share environmental and situational observations, even when the underlying investigation may be sensitive, to improve mitigation efforts and identify past transactions for examination.  This information sharing can be formal and informal and often is enhanced by stronger relationships between investigators, not just between agencies/companies.  Effective training and policies can be the derivative of this informational exchange, allowing for the instruction of more relevant and timely matters.

What are the key differences between domestic and international fraud cases?

While both domestic and international fraud investigations can be complex or simple, the primary difference between the two is the investigative assistance required to appropriately and effectively investigate. International criminal investigations related to fraud and corruption often involve more than 2 jurisdictions and require extensive requests and coordination just to obtain material evidence.  This evidence could include witness testimony, business incorporation records, and financial information.  While acquiring this evidence in domestic investigations may be resource intensive, access to this evidence is less limited as opposed to an international case. This complexity is often why international fraud and corruption investigations are primarily handled by select agencies in the United States (E.g., FBI, IRS) with investigative experience and established relationships with relevant foreign partners.  In the ever-evolving world of fraud investigations, agencies and their financial institution partners will often find that the complexities of frauds only seem to increase in nature, but also often find that cooperation is the primary tool to investigate past frauds and prevent those in the future effectively.