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DETERMINATION OF UNDISCLOSED FINANCIAL INTEREST

by

Richard A. Nossen

Consultant
Richmond, Virginia

I.

INTRODUCTION

The purpose of this guide is to familiarize state and local investigators with some of the basic investigative techniques used to trace financial transactions of whitecollar crime violators and how to utilize these techniques in detecting hidden ownership of business interests and other property.

It would serve no useful purpose to merely extract from existing texts and publications a variety of sources of information applicable to the tracing of financial transactions. To do so would offer the criminal investigator no more than a succinct summary of basic information that he is already somewhat familiar with, and would not meet his critical training needs; i.e., the actual "how to" techniques that must be applied to detect hidden ownership of business interests and other assets, the movement of currency, and the acquisition of unexplainable wealth.

Therefore, in this guide, the emphasis is placed on explaining the investigative steps to be taken by criminal investigators in: (1) tracing financial transactions through banks; (2) analyzing the movement of currency; (3) analyzing brokerage accounts; and (4) extracting information from public records to aid in the detection of hidden ownership of businesses and real property.

II.

TRACING FINANCIAL TRANSACTIONS THROUGH BANKS

A. Introduction

It would be impractical for all criminal investigators to master the art of following internal banking audit trails in order to obtain evidence of financial transactions pertinent to a particular criminal investigation. Bank record-keeping systems are far too complex, and change too rapidly, due to improvements to electronic data processing systems, to warrant training of criminal investigators in this area. It is vital, however, for criminal investigators to acquire and maintain a high degree of familiarity with the capability and responsibility of banks to maintain and retrieve, upon appropriate request, key information concerning financial transactions with their customers.

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The following information can be of inestimable value to criminal investigators in seeking information from banks concerning pertinent financial transactions of white-collar crime targets. It is based, in part, on "Operational Guidelines" issued by the American Bankers Association to all member banks in the United States, in order to comply with the Regulations on Financial Recordkeeping and Reporting of Currency and Foreign Transactions" issued by the United States Treasury Department to implement Public Law 91-508.

The users of this guide should recognize that bank records are, in most instances, not readily obtainable. Substantial legal requirements must usually be met in order to justify legal process which banks customarily will demand as a condition for disclosure. Thus, preliminary investigation to lay the basis for obtaining such records will usually be necessary.

The availability of the investigative avenues described in this guide will, however, often determine whether a promising investigation will grind to a halt or successfully go forward. Legal advice from a prosecutor or agency legal counsel should be sought in all such instances. However, it should also be recognized that bank officials and employees can be questioned

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