The ACAMS Chicago Chapter hosted an insightful and impactful event on April 17, 2024, at the esteemed Chicago-Kent College of Law. The event was structured into two sessions, each delving into crucial aspects of anti-money laundering (AML) practices and highlighting emerging trends in the financial industry that demand attention and adaptation.
The first session: “Human Trafficking and the Financial Aspect,” was spearheaded by Supervisory Special Agent Heather Czubak and Special Agent Nicole Cina, both from the Federal Bureau of Investigation (FBI). Their presentation encapsulated a comprehensive overview of human trafficking (HT), shedding light on its dark realities and financial dimensions. They emphasized that HT involves the exploitation of individuals for the sole benefit of the trafficker through force, fraud or coercion to provide goods or services in exchange for money or something of value. Contrary to common misconceptions, victims of HT can hail from diverse backgrounds and may not exhibit overt signs of physical restraint.
Agents Czubak and Cina debunked prevalent myths surrounding HT, dispelling notions that victims are exclusively foreign, from lower socioeconomic backgrounds, physically restrained or actively seeking rescue. The agents informed the attendees of common red flags associated with victims of HT, such as out-of-state identification or phone numbers, limited knowledge of their whereabouts, temporary employment arrangements via agencies and possession of fraudulent identification.
Furthermore, the agents elucidated the financial aspects intertwined with HT investigations, highlighting the importance of meticulously following financial trails to uncover discrepancies between traffickers and victims. They elaborated on specific transactional anomalies, such as irregular deposits unrelated to legitimate income sources and excessive purchases of transportation services for individuals not listed as cardholders. Through a compelling 2013 case study involving financial exploitation orchestrated by a religious leader, the agents underscored the dire financial dependence and manipulation suffered by victims.
After the fraud incident, victims of HT often encounter enduring financial challenges, including damaged credit, financial mismanagement and obstacles in securing stable employment. To aid financial institutions (FIs) in combatting HT, additional guidance is available through resources like FinCEN Advisory FIN-2020-A008, which outlines best practices and red flags for detection, underscoring the ongoing need for vigilance and proactive measures within the financial sector.
Transitioning seamlessly to the second session: “Emerging Role of AI in Financial Crimes,” experts Ryan Roxbury and Troy LaHuis from Crowe LLP illuminated the intersection of artificial intelligence (AI) and AML compliance. They highlighted the exponential growth trajectory of the global AI market, attributed to technological advancements, data availability, media attention, public interest and commercial viability.
Roxbury and LaHuis introduced attendees to Crowe’s innovative approach to AML compliance utilizing generative AI, specifically showcasing their AML officer customized generative pre-trained transformer (GPT) agent. This AI model, tailored for the professional service sector, exemplifies the transformative capabilities of AI personas designed to navigate intricate regulatory frameworks, provide expert insights and augment decision-making processes. A live demonstration of the AML officer GPT agent underscored its ability to adeptly respond to nuanced AML queries, offering instant clarity and guidance to AML professionals.
Crowe’s insights culminated in key recommendations for FIs considering AI integration in their AML programs. These recommendations encompass evaluating existing AI technologies, ensuring audit readiness for AI systems and conducting comprehensive trials before implementation. The envisioned future sees AI becoming a staple in bolstering AML programs, offering substantial advantages in regulatory research, transaction monitoring, staffing assessments and enhancing know your customer protocols.
In essence, the ACAMS event in Chicago served as a beacon of knowledge and innovation, providing invaluable insights into combating financial crimes, especially HT, while harnessing the transformative potential of AI for enhanced AML compliance. By embracing evolving practices, leveraging innovative technologies and fostering collaborative efforts, FIs can proactively safeguard against illicit activities, foster regulatory compliance and uphold integrity within the financial ecosystem in an ever-evolving landscape.
Michael Grossman, ACAMS Chicago Chapter Board, co-communications director, michael.j.grossman@wellsfargo.com
