Introduction
Law enforcement and intelligence organizations need actionable intelligence to combat gangs and the financial crimes they commit. A source of intelligence comes from Suspicious Activity Reports (SAR) created by Financial Intelligence Units (FIU). A concern is whether FIUs have access to the vital data they need to properly identify financial crimes associated with gang connections. Access to information helps organizations identify and report suspicious activity indicative of money laundering. Lack of effective information regarding gang members and their associates can hinder measures to identify the financial crimes they commit. If law enforcement is not getting the most effective information from the financial sector, there will be a disconnect between the information reported and the actual financial crimes that are occurring.
Gangs and Financial Crimes
Gangs are a major criminal threat to communities across the globe. Working with drug trafficking organizations, human smuggling rings, and weapons traffickers, gangs operate across jurisdiction lines to complete their criminal objectives. Not only do gangs operate on community streets but also in and out of the prison systems . Gangs are evolving from unorganized street criminals to sophisticated criminal enterprises working with organized criminal syndicates. From their criminal acts gangs obtain large sums of funds, which allow them to continue their criminal activities . Gangs commit financial crimes that provide funds to further their criminal functions. According to the Federal Bureau of Investigation (FBI), street gangs are involved in financial crimes including fraud, money laundering, and extortion to name a few. Street gangs have been documented being involved in some of the most sophisticated financial crimes . The financial crimes that gangs engage in provide them with greater access to funds to support their criminal operations with less risk . In order for these illegal funds to be usable by a gang, they have to be laundered. Money laundering is conducted in three phases. The first stage is called placement. This is when criminals take illegally obtained funds and place them into financial institutions. The second stage, layering, is when the criminals move funds within the financial system to make the funds appear as if they originated from legitimate activity and are connected with legitimate functions. After layering criminals will integrate the funds back into their criminal operations. The illustration (see Figure 1) depicts the three-stage progress of money laundering.
Figure 1. Stages of Money Laundering.
Retrieved from M (2013).
Financial Institutions’ Anti-Money Laundering Efforts
Financial institutions hold and maintain relationships with clients from all sectors of society, including gang members. Gangs have been documented using the banking system for both their criminal activities and personal use . Intelligence units within financial institutions monitor for suspicious banking activity that is indicative of money laundering or other financial crimes and report that activity to the government . Because of this, holding relationships with high-risk clients such as gang members place a greater responsibility on financial institutions to identify and report money-laundering activities. Financial institutions have a role in mitigating financial crimes conducted by gang members and their associates. Financial institutions are required to monitor, investigate, and report suspicious activity indicative of money laundering or terrorist financing. This requirement comes from the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorist (USA PATRIOT) Act and the Bank Secrecy Act (BSA)
Law Enforcement Efforts
Gangs are a major issue for local, state, federal, and international law enforcement agencies. Law enforcement is tasked with addressing gangs and the crimes they commit. In order to disrupt gangs, law enforcement agencies have developed enforcement efforts including task forces. These developments are implemented to help investigate gangs and their financial crimes. 6 Hundreds of task forces have been established by law enforcement agencies across the country to disrupt gang activity . Gang task forces can be seen operating at the local, state, and federal levels. At the federal level the FBI maintains and facilitates the MS-13 Gang Task Force and the Safe Streets Task Force . At the local and state levels, gang task forces were established by local jurisdictions to address criminal activity associated with gangs within their respective geographical areas . Task forces have multiple agencies working together to create better collaboration in investigating gang activity. This collaboration allows for greater information sharing and the development of effective enforcement efforts . Gang task forces will often work with fusion centers to better develop actionable intelligence to disrupt gangs. Fusion centers are physical locations where local, state, and federal law enforcement and intelligence agencies work together to share information and develop intelligence. Fusion centers were set up to create an environment of information sharing between law enforcement and intelligence entities to develop actionable intelligence to prevent terrorism. They are also now being used to support investigations into criminal activity including gangs. Information sharing within fusion centers is intended to lead to the creation of actionable intelligence. The goal of a fusion center is to foster an environment of information sharing and intelligence development . This leads to greater collaboration in developing intelligence to disrupt financial crimes committed by gangs.
