Patriot Act calls for reporting of suspicious money transactions
By Ji Hyun Lim
AsianWeek Staff Writer
In an effort to combat money laundering, terrorist financing and other financial crimes, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) spoke to some 200 members of one of the leading grocers associations, the National Korean American Grocers Association (National KAGRO), and its semi-annual conference in Philadelphia, July 19.
“The nation’s effort to combat money laundering and terrorist financing [is] more critical than ever,” said Patrice Motz, spokeswoman of FinCEN’s Office of Compliance and Regulatory Enforcement. “The National KAGRO is providing an important service by helping us inform [its] members about the BSA [Bank Secrecy Act] requirement and how to comply with [it].”
With the passage of the Patriot Act, which went into effect last October as an immediate reaction to the terrorist acts last year, FinCEN — part of the Department of Treasury since 1990 — was re-established this year.
“It was an executive order,” Sheri James, FinCEN’s public relations officer, said. “There was a need for FinCEN to combine law enforcement information, financial information and network information to back law enforcement.”
National KAGRO is working with FinCEN in a campaign to inform money services businesses (MSBs) — businesses that offer money orders, traveler’s checks, money transfers, check cashing or currency-exchange services — about federal requirements, including the reporting of suspicious activities, under the BSA.
Ellis Cha, California’s KAGRO president and owner of a grocery store in Orange, Calif., points out that since Sept. 11, there has been a heightened awareness of money laundering through small businesses.
“A little after 9-11, the federal government sent us a letter regarding check-cashing of over a certain amount of money [because] a lot of our members do check-cashing and money orders,” Cha said. “If any of those stores are used for illegal purposes, we don’t want that. That’s the main reason we want to cooperate.”
With 23,000 members nationwide and 3,500 members in California alone, National KAGRO is considered the largest Korean American trade organization. Though Korean Americans represent less than 1 percent of the U.S. population, they own 11 percent of U.S. retail grocery outlets and 18 percent of liquor stores, many of which are MSBs.
In addition, many of these businesses that are owned by Korean Americans offer money services in addition to their primary line of business.
FinCEN has asked National KAGRO members to file a report called the Currency Transaction Report for customers who request a transaction of more than $10,000 in cash. If a customer makes two $9,000 (just below the $10,000 limit) transactions within two days, that individual would be considered suspicious, and the vendor would have to file the suspicious activity report.
“A lot of times, liquor stores are considered the hot spot for illegal activity,” Cha said. “It’s important to cooperate with any government, federal or state, to work together to avoid any criminal actions in the liquor stores.”
Although FinCEN intends to offer free materials such as posters, booklets and handouts to businesses interested in learning more about the new requirements and how to comply with them, Cha argues that many Korean grocers will need information to be translated in Korean.
“Our members have a real problem with the language,” Cha said. “Through our newsletter, which goes out every other month, we try to keep them updated about changes and problems so that they’re aware of it. We can also use Korean media to hold a press conference for other members.”
Said Cha: “We have to be aware [of financial crimes] because in some of the liquor stores, cash handling is enormous — like millions of dollars. We have to keep an eye on money laundering, and we don’t want to be taken advantage of for the illegal activities.”
Reach Ji Hyun Lim at jlim@asianweek.com.
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