hardyp@ballardspahr.com | 215.864.8838 | view full bio

Peter is a national thought leader on money laundering, tax fraud, and other financial crime. He is the author of Criminal Tax, Money Laundering, and Bank Secrecy Act Litigation, a well-reviewed and comprehensive legal treatise published by Bloomberg BNA.

He advises corporations and individuals from many industries against allegations of misconduct ranging from money laundering, tax fraud, mortgage fraud and lending law violations, securities fraud, health care fraud, public corruption, Foreign Corrupt Practices Act violations, and identity theft and data breaches.  He also advises on compliance with the Bank Secrecy Act and Anti-Money Laundering requirements.

Peter spent more than a decade as a federal prosecutor before entering private practice, serving as an Assistant U.S. Attorney in Philadelphia working on financial crime cases. He was a trial attorney for the Criminal Section of the Department of Justice’s Tax Division in Washington, D.C.

Ballard Spahr to Present on Banking and Cannabis

FinCEN and the National Credit Union Administration Both Issue Guidance on Hemp and Banking

We are really pleased to presenting on July 9, 2020 to the National Association of Federally-Insured Credit Unions (“NAFCU”) on banking issues relating to cannabis. The cannabis and hemp industry continues to pose a fascinating mix of competing opportunities and risks – particularly from an anti-money laundering (“AML”) perspective. Changing societal opinions and business opportunities can conflict with daunting legal landscapes and a spectrum of potential AML risks.

This is an important topic with evolving real-world implications, particularly for credit unions, which generally have been more willing to cater to cannabis and hemp-related clients than other financial institutions. Of course, we frequently have blogged on cannabis, hemp and banking, for which the legal landscape would change significantly if pending federal legislation were to pass.

Ultimately, this topic produces constant twists and turns, including two sets of guidance – described below – recently issued by the Financial Crimes Enforcement Network (“FinCEN”) and the National Credit Union Administration (“NCUA”). Both are consistent with a (slowly) growing acceptance of cannabis and hemp-related banking by both government and the financial industry.
Continue Reading The Banking of Cannabis and Hemp-Related Customers: An Update

This is a picture of a Black Rhinoceros.  It is one of two Rhinoceros species in Africa.  It is estimated that there were approximately 125,000 Black Rhinoceroses in 1960.  Now, there are less than 6,000. Three subspecies are already extinct. Although loss of habitat is certainly a contributing factor, much of this decimation is attributable to poaching and the illegal wildlife trade (“IWT”).

The Financial Action Task Force (“FATF”) just released an important report entitled Money Laundering and the Illegal Wildlife Trade (the “Report”).  The lengthy and detailed Report makes clear that the IWT is pernicious cocktail of animal slaughter/abuse and complex financial crime, often run by highly organized groups that thrive on international cooperation by complicit actors and the use of shell companies.  The Report bemoans the fact that the IWT benefits from a lack of focus and priority by law enforcement. Accordingly, the Report seeks to spread awareness of the IWT, provide general guidance on combatting it, and propose action steps.  One theme of the Report is that effectively combatting the IWT requires financial investigations and money laundering charges.
Continue Reading Money Laundering and the Illegal Wildlife Trade

Federal Register Notice Implicates Debate Over BSA Reporting Burden

As we have blogged (here, here, and here), the Financial Crimes Enforcement Network (“FinCEN”) consistently has stressed the importance of Suspicious Activity Reports (“SARs”) and other Bank Secrecy Act (“BSA”) filing requirements to anti-money laundering (“AML”), counter-terrorism and law enforcement efforts. These vigorous pronouncements can be contrasted with certain critiques by industry groups and some commentators regarding the true operational value (or lack thereof) of BSA reporting requirements to law enforcement and financial institutions’ AML programs, particularly when compared to the overall costs associated with the current and rigorous regulatory regime. Lurking behind this debate is the possibility that some requirements of the BSA maybe reduced – or “reformed,” depending upon one’s perspective – through legislation. A recent regulatory filing by FinCEN illustrates this tension and ongoing debate.

On May 26, 2020, FinCEN issued a notice in the Federal Register (“Notice”) to renew the Office of Management and Budget (“OMB”) control numbers assigned to the SAR reporting regulations. The Notice is required in order to give the financial industry and affected stakeholders an opportunity to comment on existing regulatory requirements, as well as associated burdens. Although FinCEN has encouraged the industry to review the Notice and comment, it likely will not be surprised if at least some industry groups push back and criticize the associated estimates regarding burden. Regardless, the Notice provides interesting insights and statistics into current SAR reporting.
Continue Reading FinCEN Seeks Industry Comments on SAR Reporting Burden and Provides Plentiful SAR Stats

On May 18, the Financial Crimes Enforcement Network (“FinCEN”) issued an Advisory “to alert financial institutions to rising medical scams related to the COVID-19 pandemic. This [A]dvisory contains red flags, descriptions of COVID-19 related medical scams, and information on reporting suspicious activity.” According to FinCEN, “[t]his is the first of several advisories FinCEN intends to issue concerning financial crimes related to the COVID-19 pandemic.” A Spanish-language version of the Advisory is here.  FinCEN also issued a companion Notice to the Advisory that “provides detailed filing instructions for financial institutions, which will serve as a reference for future COVID-19 advisories.”

Although FinCEN has made clear that future advisories will follow, the May 18 Advisory and Notice are themselves the latest in a string of prior pronouncements by FinCEN relating to the global pandemic. As we have blogged, FinCEN updated its March 16, 2020 COVID-19 Notice for the stated reason of assisting “financial institutions in complying with their Bank Secrecy Act (“BSA”) obligations during the COVID-19 pandemic, and announc[ing] a direct contact mechanism for urgent COVID-19-related issues.” FinCEN, of course, is not the only regulatory body addressing Anti-Money Laundering (“AML”) issues implicated by COVID-19. As we also have blogged, the Financial Action Task Force (“FATF”) recently issued a paper entitled “Covid-19-Related Money Laundering and Terrorist Financing – Risk and Policy Responses” This FATF Paper follows up on the April 1, 2020 statement issued by FATF’s President on COVID-19 and measures to combat illicit financing.

The Advisory is surprisingly specific when describing the possible scams and potential red flags that FinCEN believes that financial institutions should be monitoring for in order to detect, prevent, and report such suspicious activity. In addition to providing a list of red flags, the Advisory provides specific case studies demonstrating the real-world concerns surrounding these scams. Although this level of detail is helpful to financial institutions when integrating the Advisory into their own programs, it also seems to impose potential heightened due diligence requirements on financial institutions when dealing with companies engaged in providing medical services and supplies.
Continue Reading FinCEN Issues Advisory on Medical Scams Relating to COVID-19

We are very pleased to announce that we have published a detailed chapter, The Intersection of Money Laundering and Real Estate, in Anti-Money Laundering Laws and Regulations 2020, a publication issued by International Comparative Legal Guides (ICLG).

Money laundering and anti-money laundering concerns relating to the real estate industry is a topic on which

Recent DOJ Forfeiture Action Against High-End Real Estate in Notorious Corruption Scheme Underscores Issues 

We are pleased to be presenting on Money Laundering and the Real Estate Industry on May 20 before the Real Estate Services Providers Council (RESPRO), a national non-profit trade association representing businesses before federal and state policy makers, and

On May 4, the Financial Action Task Force (“FATF”) issued a paper entitled “Covid-19-Related Money Laundering and Terrorist Financing – Risk and Policy Responses (“Paper”). This Paper follows up on the April 1, 2020 statement issued by FATF’s President on COVID-19 and measures to combat illicit financing, on which we previously blogged. As we also have blogged, the COVID-19 pandemic will cause many financial institutions to face significant Anti-Money Laundering (“AML”) issues because of the unfortunate confluence of increased fraud schemes seeking to capitalize on the pandemic, coupled with the fact that many BSA/AML compliance teams will be straining to maintain an adequate amount of staff and degree of communication.
Continue Reading FATF Issues Paper on COVID-19 Enhanced AML and Fraud Risks

We are really pleased to be moderating the Practising Law Institute’s 2020 Anti-Money Laundering Conference on May 12, 2020, starting at 9 a.m. Perhaps needless to say, this year’s conference will be entirely virtual.  But the conference still should be as informative, interesting and timely as always.  Our conference co-chair, Nicole S. Healy of Ropers

The COVID-19 pandemic has created a perfect storm for money laundering and fraud. As we have blogged, financial institutions subject to the Bank Secrecy Act are facing increased incidents of fraud and must catch and report suspicious or illegal activity while compliance teams face potentially reduced staff and are trying to work remotely. The

Some Commentary on the Unfortunate Relationship Between Crisis and Fraud

The Financial Crimes Enforcement Network (“FinCEN”) released today an update (“Update”) on its March 16, 2020 COVID-19 Notice, on which we previously blogged, for the stated reason of assisting “financial institutions in complying with their Bank Secrecy Act (BSA) obligations during the COVID-19 pandemic, and announc[ing] a direct contact mechanism for urgent COVID-19-related issues.” Further, the Update states that “FinCEN is committed to promoting the success of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the need to facilitate expeditious disbursal of CARES Act funds.”  This post will summarize briefly the Update, and make a few high-level comments.

The COVID-19 pandemic — pernicious, unpredictable and continually evolving — resists facile pronouncements.  With that caveat, it is rational to predict that many financial institutions subject to the BSA will face significant issues in the very near future because of the unfortunate confluence of increased fraud schemes seeking to capitalize on the pandemic, coupled with the fact that many BSA/AML compliance teams will be straining in this age of “social distancing” and enforced working remotely to maintain an adequate amount of staff and degree of communication needed to catch and report suspicious activity, among other obligations under the BSA.  Stated otherwise, we are entering a time of maximum fraud and a reduced capacity to stand guard.

Further, as the pandemic continues and then recedes, the previously existing fraud schemes will come to light — just like during the financial crisis of 2008, when the Bernie Madoffs of the world were exposed — because desperate investors will be demanding their cash back, and some soon will discover that their money actually was stolen a while ago.  Investigations, prosecutions and litigations will ensue.

Turning to the Update by FinCEN, we summarize here greatly.  In our view, the Update provides some generally helpful information, but little in the way of concrete guidance.
Continue Reading FinCEN Issues COVID-19 AML Update for Financial Institutions