BSA data serves key role in investigating financial crimes
IRS Criminal Investigation (IRS-CI) released investigative statistics Wednesday on how the agency uses Bank Secrecy Act (BSA) data in its financial crime investigations. Over the past three fiscal years, more than 83% of IRS-CI criminal investigations recommended for prosecution had a primary subject with a related BSA filing. Convictions in those cases resulted in average prison sentences of 38 months, $7.7 billion in asset seizures, $256 million in restitution, and $225 million in asset forfeitures.
Under the BSA, financial institutions must notify the federal government when they encounter instances of potential money laundering or tax evasion. This data is used by federal agencies to investigate money laundering and related financial crimes.
“The Bank Secrecy Act exists to prevent financial institutions from being used as a vehicle by criminals to conceal or launder their ill-gotten gains. It also serves as a safety net for crime victims,” said IRS-CI Chief Jim Lee. “Hundreds of millions of dollars in restitution have been awarded to crime victims because our agents were able to use BSA data to prove a crime was committed.”
BSA data helped identify unusual financial patterns tied to Alexa Kinney of Gillette Wyoming. In less than a one-year period, Kinney created three separate schemes to defraud others for her own benefit. The schemes included obtaining funds from an investor using fraudulent investment opportunities, using another individual’s credit card without their authorization, and submitting a false statement to the Internal Revenue Service to claim an Economic Impact Payment Kinney was not entitled to.
Kinney knowingly attempted to obtain $165,000 from an investor under false pretenses by stating the investment would mature to $280,000 in approximately two months. Kinney never invested the money as claimed, and instead used the money for personal expenses and to pay off creditors. In another instance, she obtained a credit card for payment for legal services she was to provide and used the victim’s account for personal expenses.
“IRS Special Agents are experts in disrupting and dismantling drug trafficking organizations by targeting their illegal profits used to finance their operations,” said Andy Tsui, Special Agent in Charge, IRS Criminal Investigation Denver Field Office. “The Bank Secrecy Act is one of the many resources we use to investigate individuals who engage in money laundering and other financial crimes.”
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI is the only federal law enforcement agency with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.