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Currency Crimes

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9.5.5  Money Laundering and Currency Crimes Investigations (Cont. 1)

9.5.5.3 
Title 31 Violations

9.5.5.3.3 
Reports and Recordkeeping and Registration Required Under Title 31

9.5.5.3.3.1 
Reports Required by the Bank Secrecy Act- Title 31

9.5.5.3.3.1.4  (11-04-2004)
Report of International Transportation of Currency or Monetary Instruments (CMIR) FINCEN Form 105 (formerly Customs Form 4790)

  1. Title 31 CFR 103.23 requires that each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, or attempts to physically transport, mail, or ship, or attempts to cause to be physically transported, mailed or shipped, currency or other monetary instruments in an aggregate amount over $10,000 at one time from the United States to any place outside of the United States, or into the United States from any place outside the United States must file a CMIR with the US Customs Service.
  2. Additionally, each person in the United States who receives currency or other monetary instruments in an aggregate amount over $10,000 at one time, which have been transported, mailed, or shipped to the person from any place outside the United States with respect to which a CMIR has not been filed, whether or not required to be filed, shall file a CMIR stating the amount, date of receipt, the form of instrument(s), and the person from whom received. However, 31 CFR 103.23(c) exempts the following from the reporting requirements:
    1. the Federal Reserve
    2. a bank, a foreign bank, or a broker or dealer in securities, in respect to currency or other monetary instruments mailed or shipped through the US Postal Service or by common carrier
    3. a commercial bank or trust company organized under the laws of any state or of the United States with respect to overland shipments of currency or monetary instruments shipped to or received from an established customer maintaining a deposit relationship with the bank, in amounts which the bank may reasonably conclude do not exceed amounts commensurate with the customary conduct of the business, industry, or profession of the customer concerned
    4. a person who is not a citizen or resident of the United States in respect to currency or other monetary instruments mailed or shipped from abroad to a bank or broker or dealer in securities through the US Postal Service or by common carrier
    5. a common carrier of passengers in respect to currency or other monetary instruments in the possession of its passengers
    6. a common carrier of goods in respect to shipments of currency or monetary instruments not declared to be such by the shipper
    7. a traveler’s check issuer or its agent in respect to the transportation of traveler’s checks prior to their delivery to selling agents for eventual sale to the public
    8. by a person with respect to a restrictively endorsed traveler’s check that is in the collection and reconciliation process after the traveler’s check has been negotiated
    9. nor by a person engaged as a business in the transportation of currency, monetary instruments, and other commercial papers with respect to the transportation of currency or other monetary instruments overland between established offices of banks or brokers or dealers in securities and foreign persons

     

  3. See the IRM 9.4.2, Sources of Information, for how to request a copy of a CMIR.

9.5.5.3.3.1.5  (11-04-2004)
Suspicious Activity Report (SAR) Forms

  1. Title 31 USC §5318(g)(1), Comptroller of the Currency Regulation 12 CFR 21.11, state or other bank regulatory agencies, and the Right to Financial Privacy Act, 12 USC §3401 et seq., make reporting of suspicious financial transactions mandatory for financial institutions.
  2. There are presently four SAR forms and some of their form number and designations have been renamed.
    • FinCEN Form 101 (formerly the SAR-F) is to be filed by Securities and Futures Industry. FinCEN Form 101a is the instruction sheet.
    • FinCEN Form 102 (formerly SAR-C) is to be filed by Casinos and Card Clubs. FinCEN 102a is the instruction sheet.
    • SAR-MSB (TD F 90-22.56) is to be filed by Money Service Businesses (currency exchanges, wire remitters, traveler's checks etc.) Additional FAQs concerning MSBs may be found at www.msb.gov.
    • TDF90-22.47 is to be filed by depository institutions. The SAR (Suspicious Activity Report) is the original SAR form to be completed by depository institutions.

     

  3. Depository institutions are required to report suspicious currency transactions on an SAR form, TDF90-22.47. The SAR form replaces both the Form 4789 and the Criminal Referral Form (CRF) for the reporting of suspicious currency transactions and all other potential criminal violations detected by financial institutions. Financial institutions are still required to file a Currency Transaction Report FinCEN Form 104 if the transaction amount is greater than $10,000.
  4. Title 31 §USC 5318(g)(4) provides for Department of Treasury to select a single designee to receive SAR forms for processing and subsequent referral to law enforcement agencies. An SAR form database is available to the IRS through the Currency Banking Retrieval System (CBRS). The local CI field office should maintain strong liaison with financial institutions to timely receive information that is exigent in nature.
  5. A significant number of SAR forms involve potential money laundering and BSA violations. The SAR forms, therefore, represent excellent leads for money laundering and BSA investigations, and tax administration issues. See IRM Section 9.4.13, Investigative Task Forces relative to leads developed through the SAR-Review Teams.
  6. Title 31 §USC 5313(g)(2) prohibits financial institutions and their directors, officers, employees, and agents from notifying the subject(s) of a SAR form that the transaction has been recorded/reported. The SAR and the filer of the SAR are to be treated as confidential informant information. The SAR filing must not be disclosed to the subject of the SAR or provided to the other operating divisions.
  7. Title 31 §USC 5313(g)(3) provides immunity from civil liability (known as safe harbor) under Federal or state law (e.g., Right to Financial Privacy Act) for financial institutions, directors, officers, employees, and agents relating to a SAR form.
  8. Special agents should update CIMIS with an entry code of " 55" in item #32 of Form 4930 when an SAR form is found to be involved in an investigation.

9.5.5.3.3.2  (11-04-2004)
Recordkeeping Required by Title 31

  1. The following subsection provides information regarding the records that are required to be maintained under Title 31.

9.5.5.3.3.2.1  (11-04-2004)
Records Required by Persons with Foreign Financial Accounts

  1. Title 31 CFR 103.32 requires that persons subject to filing a FBAR for interests in foreign financial accounts retain the following records for five years:
    1. the name and account number for each foreign account
    2. the name and address of the foreign bank or other person with whom the account is maintained
    3. records of the type of account and the maximum value of the account during the reporting period

     

  2. See IRM 9.4.2, Sources of Information, for a listing of foreign financial transaction forms, where the forms are filed, and how to request the forms relating to a United States citizen or resident, a domestic partnership, or a domestic estate or trust.

9.5.5.3.3.2.2  (11-04-2004)
Records to be Retained by Financial Institutions

  1. Title 31 CFR 103.33 requires financial institutions to retain the following records for five years:
    1. extensions of credit which exceed $10,000, except those secured by real property
    2. each advice, request, or instruction received or given for transfers of currency or other monetary instruments, funds, checks, investment securities, or credit, of more than $10,000 to or from any person, account, or place outside the United States
    3. each advice, request, or instruction to another financial institution or other person within or without the United States, for a transfer of funds, or of currency, other monetary instruments, checks, investment securities, or credit of more than $10,000 to or from any person, account, or place outside the United States

     

  2. Title 31 CFR 103.34 requires that banks retain the following additional records (for five years, per 31 CFR 103.38(d)):
    1. A taxpayer identification number (TIN) that is to be obtained within 30 days after a certificate of deposit is sold or redeemed, or a deposit or share account is opened; and a list by name, address and account number of customers who do not provide a TIN, for availability to the Secretary of the Treasury upon demand. Lists can be requested by memorandum to the Chief, CI.
    2. Documents that grant signature authority on deposit or share accounts.
    3. Statements, ledger cards, or other records showing each transaction in a deposit or share account.
    4. Each check, clean draft, or money order over $100, where the account volume is over 100 checks a month, except checks for dividends, payroll employee benefits, insurance claims, medical benefits, or checks drawn on government agency accounts, by brokers or dealers in securities, on fiduciary accounts, on other financial institutions, or pension or annuity checks.
    5. Debit items over $100 (other than bank charges or agreed periodic charges) to a deposit or share account not exempted above.
    6. Transfers of funds, or of currency or other monetary instruments, checks, investment securities, or credit over $10,000 to a person, account, or place outside the United States.
    7. Checks or drafts over $10,000 drawn on or issued by a foreign bank which the domestic bank has paid or presented to a non-bank drawee for payment.
    8. Checks, drafts, or transfers of credit over $10,000 received directly from a bank, broker, or dealer in foreign exchange outside the United States.
    9. Each receipt of currency, other monetary instruments, investment securities or checks, and each transfer of funds or credit, over $10,000 received directly from a bank, broker, or dealer in foreign exchange outside the United States.
    10. Records to trace or supply a description of demand deposits of checks over $100.
    11. The name, address, and TIN of the purchaser of a certificate of deposit, and the date and description of the payment instrument and method.
    12. The name, address, and TIN of a person redeeming a certificate of deposit, and the description of the certificate and the transaction date.
    13. Deposit slips or credit tickets for transactions over $100 (showing also any currency involved), or the equivalent record for direct deposit or wire transfer deposits.

     

9.5.5.3.3.2.3  (11-04-2004)
Additional Records to be Retained by Brokers or Dealers in Securities

  1. Title 31 CFR 103.35 requires that brokers or dealers in securities retain the following additional records (for five years, per 31 CFR 103.38(d)):
    1. For a person residing or doing business in the United States or a citizen of the United States, a customer’s TIN is to be obtained within 30 days after a brokerage account is opened; and a list by name, address, and account number of customers who do not provide a TIN, for availability to the Secretary of the Treasury upon demand. Lists can be requested by memorandum to the Chief, CI.
    2. Documents granting signature or trading authority over each customer’s account.
    3. Each record described in 17 CFR 240.17(a)–3(a) (1)–(3), (5)–(9).
    4. Each remittance or transfer of funds, or of currency, checks, other monetary instruments, investment securities, or credit, over $10,000 to a person, account, or place outside the United States.
    5. Each receipt of currency, other monetary instruments, checks, or investment securities and each transfer of funds or credit, over $10,000 received directly from any person, account, or place outside the United States.

     

9.5.5.3.3.2.4  (11-04-2004)
Additional Records to be Retained by Casinos

  1. Title 31 CFR 103.36 requires that each casino retain the following records (for five years, per 31 CFR 103.38(d)):
    1. For each deposit of funds, account opened, or line of credit, maintain the name, permanent address, and social security number (SSN) of the person involved; and a list by name and permanent address of persons who do not provide a SSN, for availability to the Secretary of the Treasury upon request. The lists can be requested by memorandum to the Chief, CI. For nonresident aliens, the person’s passport number or some other government document will be used.
    2. The name, permanent address, and SSN of the person from whom funds were received, and the date and amount for each receipt (including funds for safekeeping or front money) for the account (credit or deposit) of any person. For nonresident aliens, the person’s passport number or some other government document will be used for identity.
    3. Debits or credits to a customer’s deposit or credit account.
    4. Statements, ledger cards, or other records of each deposit or credit account for each transaction.
    5. Credit extensions over $2500, along with terms, conditions, and records of repayment, to also include the customer’s name, permanent address, and SSN, and the transaction date and amount (including repayments). For nonresident aliens, the person’s passport number or some other government document will be used for identity.
    6. Each advice, request, or instruction received or given by the casino for itself or another person for transactions involving a person, account or place outside the United States (to include wire, telephone, or letter communications). For transfers on behalf of a third party, made into or received out of the United States, the record shall include the third party’s name, permanent address, SSN, signature, and transaction date and amount. If the third party is a nonresident alien, the record shall include the person’s name, passport number, or description of some other government document.
    7. Records to reconstruct a person’s deposit or credit account with the casino or to trace a deposited check to the bank of deposit.
    8. All records, documents, or manuals required to be maintained under state and local laws or regulations.
    9. All records prepared or used to monitor a customer’s gaming activity.
    10. For each person that a casino knows who has bought in at, bet, or purchased chips, tokens, or plaques over $3,000, with one or more currency transactions in a single casino day, the record shall include the name, permanent address, SSN, or TIN of the person, and the currency amount and the casino license number of the casino employee preparing the record.
    11. For each person that a casino knows who has purchased or redeemed slot machine tokens of $3,000 or more, through one or more currency transactions in a single gaming day. The record shall include the name, permanent address, casino account number, SSN, or TIN of the person, the date, time, and currency amount involved, and the casino license number of the employee preparing the record.
    12. A list of each customer who is known by more than one name.
    13. A list of each transaction between the casino and its customers that involve personal checks (excluding those which evidence credit by a casino strictly for gaming, e.g., markers), business checks (including casino checks), official bank checks, cashier’s checks, third party checks, traveler’s checks, promissory notes or money orders having a face value over $3,000.

     

  2. Title 31 CFR 103.36 refers to 31 CFR 103.28 and requires that, except as otherwise provided, before concluding any transactions with respect for which a report is required, a financial institution shall verify and record the name and address of the individual and that verification shall be made by examination of a document, other than a bank signature card, that is normally used for cashing checks for non-depositors.

9.5.5.3.4  (11-04-2004)
Geographic Targeting Orders

  1. Pursuant to 31 USC §5326, as implemented by 31 CFR 103.26, the Secretary of the Treasury, upon a finding that reasonable grounds exist for concluding that additional recordkeeping and reporting requirements are necessary to carry out the purposes of this Subtitle, may target specified financial institutions in a geographic area to submit reports for currency transactions of $10,000 or less, for up to 60 days (subject to renewal).
  2. A target request may be made by Federal, state, or local law enforcement agencies, or by Department of Treasury at its own initiative based on discussions within Treasury agencies, other Federal agencies (e.g., DOJ), or other means.
  3. Target requests by law enforcement agencies must be in writing, signed by the head of the agency, and submitted to the Director, Office of Regulatory Programs of FinCEN. IRS requests may be initiated at the field office level by memorandum from the SSA to the SAC, and through the Director, Operations, to the Chief, CI, for submission to the Director, Office of Regulatory Programs of FinCEN.
  4. Each target request must include the following information:
    a) a specific proposed area, e.g., the City of Madison, the area between 10th and 20th Streets, and Atlantic and Pacific Streets, in Rochester
    b) the types of financial institutions to be targeted, e.g., all banks, only telegraph companies
    c) the recommended threshold reporting amount, e.g., $2,500
    d) the transactions to be reported, e.g., all cash transactions, all purchases of money orders exceeding $2,500
    e) a detailed description of the criminal activity and law enforcement need for the additional information
    f) the name and telephone number of a contact person from the requesting agency
    g) a game plan, i.e., the resources that the requesting agency is willing to dedicate
    h) the type of assistance needed from other agencies, e.g., a bank examiner
    i) the recommended time period
  5. Each request will be reviewed by the Office of Regulatory Programs of FinCEN for recommendation, through the Deputy Assistant Secretary (Enforcement), to the Assistant Secretary for terrorist financing and financial crimes to approve (with or without modification) or disapprove the request. The Deputy Assistant Secretary will approve requests upon determination that there is a high degree of money laundering or other criminal activity occurring at or below $10,000 at financial institutions in the target area. The Deputy Assistant Secretary’s decision will be communicated in writing to the requesting agency.
  6. If the Deputy Assistant Secretary for terrorist financing and financial crimes concurs in the request, the Office of Regulatory Programs at FinCEN will prepare a Targeting Order signed by the Assistant Secretary or his/her designee. The Office of Compliance Regulatory Programs at FinCEN will issue a tasking memorandum to each needed agency for assistance to carry out the targeting order. For example, FinCEN may be tasked to receive the information, to perform analyses, and to notify designated agencies of the results. The Commissioners of IRS and Assistant Secretary, Bureau of Immigration and Customs Enforcement may be tasked to provide agents for field operations, including on-site analysis of the reported information. Tasked agencies will be expected to commit sufficient resources throughout a targeting operation.
  7. The Office of Compliance Regulatory Programs at FinCEN will brief offices with a need to know of the targeting order, e.g., DOJ, the affected US Attorney or State Attorney General, bank examiners, etc. FinCEN will direct the servicing of the targeting order to the Chief Executive Officers of the selected financial institutions, in person, or by registered mail.
  8. CTRs for amounts of $10,000 or less will not be sent to the IRS Detroit Computing Center, but to a centralized location specified in the targeting order. After processing at the centralized location or at a transaction center, an analysis of the reports or a hard copy output will be sent to the tasked agencies for analysis and other law enforcement use.
  9. Reports normally required to be filed without a Geographic Targeting Order, e.g., CTRs (FinCEN 104), must continue to be filed with the Detroit Computing Center; however, a targeting order may require copies of those forms to be furnished along with those specifically required by the order.
  10. Title 31 USC §5326(c) prohibits financial institutions and their officers, employees, and agents from disclosing the existence or terms of targeted currency reporting orders except as prescribed by the Secretary.
  11. Targeting projects may not deviate from the tasking memorandum and overall plan without the written approval of the Deputy Assistant Secretary for Terrorist Financing and Financial Crimes or his/her designee. Modification requests, including early project termination, must be fully detailed. The Office of Regulatory Programs at FinCEN will be the contact office for all targeting order communications.

9.5.5.3.5  (11-04-2004)
Title 31 Summons

  1. See IRM 25.5, SUMMONS HANDBOOK for information regarding the Title 31 Summons.
  2. The use of a Title 31 summons in a Title 31–related civil forfeiture action is discussed in The Summons Handbook. Notice to a customer whose bank records are being sought by a Title 31 summons can be delayed by up to 90 days upon application to a judge or a magistrate judge through a civil US Attorney. Refer to IRM 9.7, Asset Seizure and Forfeiture for detailed information and procedures concerning asset forfeiture.

9.5.5.3.6  (11-04-2004)
Money Laundering Form 8300, 26 USC §6050I Violations

  1. Title 26 USC §6050I (effective January 1, 1985) requires any person who is engaged in a trade or business who in the course of such trade or business receives more than $10,000 in cash in one transaction or two or more related transactions shall make a return at such time as the Secretary by regulation prescribes. (See 31 USC §5331, 31 USC §5321, 31 USC §5322 and 31 USC §5317).
  2. With the enactment of the USA Patriot Act, the Form 8300 reporting requirement is now imposed under two statutory authorities, Title 26 and Title 31, requiring a dual reporting requirement to file a Form 8300 with the IRS and FinCEN whenever a trade or business receives cash/currency (see subsection 9.5.5.3.6.1) in excess of $10,000 in a single transaction or two or more related transactions. The differences between the two reporting regimes are minimal and the dual reporting requirement is discharged with the filing of a single form, IRS/FinCEN Form 8300 with the IRS Detroit Computing Center. (See subsection 9.5.5.5.4.4 and Disclosure rules under 26 USC §6103 concerning Forms 8300 filed by clerks of the courts who receive more than $10,000 in cash as bail). Thus, a Form 8300 violation results in two criminal violations, however, the double jeopardy clause prevents multiple or successive prosecutions for the same offense. The circumstances of the investigation and CT Counsel will assist to determine whether to investigate or prosecute Form 8300 violations as Title 26 or Title 31.
  3. Factors to consider in choosing Title 26 investigation includes the disclosure requirements of 26 USC §6103, along with the three year statute under 26 USC §7203 (failure to file/structuring) and six year statute under 26 USC §7206 (false return). The scienter requirement under Title 26 is willfulness (specific intent) while under Title 31 it is knowledge (general intent). Additional criminal penalties may also be considered such as:
    • Criminal penalties applicable to aiders and abettors 18 USC §2
    • Criminal penalties applicable to criminal conspiracies 18 USC §371
    • Criminal penalties for money laundering offenses 18 USC §1956(a)(1)(B)(ii)
    • Criminal penalties applicable to obstruction of criminal investigations 18 USC §1510

     

  4. Investigations recommending prosecution under 26 USC §6050I can be directly referred to the attorney for the government unless the prosecution recommendation relates to:
    • accountant
    • physician
    • attorney or their employees
    • casino or its employees
    • financial institution or its employees
    • local, state, federal or foreign public official or political candidate
    • members of the judiciary
    • religious leaders,
    • representatives of the electronic or printed news media
    • officials of a labor union
    • officials of publicly-held corporations and/or their officers.
      These cases must be referred to DOJ, Tax Division per Tax Division Directive 87-61.

     

  5. Under 26 USC §6050I, the statute of limitation for willful failure to file a Form 8300 is three years from the date the Form 8300 should have been filed, i.e.15 days after the date of a reportable transaction. The statute is increased to six years for the willful making and subscription of a false Form 8300, in violation of 26 USC §7206(1).

9.5.5.3.6.1  (11-04-2004)
Definitions of Terms Used in 26 USC §6050I (Defined by the IRS Regulations)

  1. While the statutory language under Title 26 and Title 31 reporting regimes have virtually identical reporting requirements, there are some differences in terms of reporting, penalties, statute of limitations, referral path, disclosure limitations and forfeiture. The definitions under Title 26 are found in the Code of Federal Regulations under 103.30.
  2. Although 26 USC §6050I refers to cash and 31 USC §5331 refers to currency transactions, these terms are defined identically to include foreign currency and monetary instruments with a face value of not more than $10,000, but does not include any personal check drawn on the account of the writer.
  3. Similarly, the terms make a return and file a report are effectively the same requirement and is discharged under the dual-reporting requirement of a single form, IRS/FinCEN Form 8300 being filed at the Detroit Computing Center.
  4. Other terms used in 26 USC §6050I are defined:
    1. Consumer durable means an item of tangible personal property of a type suitable for personal consumption or use that can reasonably be expected to be useful for at least a year under ordinary usage and that has a sales price of more than $10,000.
    2. Collectible includes any work of art, any rug or antique, any metal or gem, and any stamp or coin.
    3. Travel and entertainment activity includes any item of travel, hotel accommodations and admission into an event itself that constitutes the entertainment.
    4. Designated reporting transaction is a retail sale of a consumer durable, collectible and a travel or entertainment activity.
    5. Person means an individual, corporation, trust, partnership, association or company.
    6. Recipient means the person receiving the cash.
    7. Transaction means the sale of goods or services, sale of real property, a sale of intangible property, rental of real or personal property, an exchange of cash or currency for other cash or currency, the establishment or maintenance, or contribution to, a custodial account, a payment of preexisting debt, the conversation of cash to a negotiable instrument, the reimbursement of expenses paid or the making or repayment of a loan. A transaction may not be divided into multiple transactions in order to avoid a return or a report.
    8. Exemptions means transactions occurring outside the United States and any transaction reported by a CTR and/or by a financial subject to CTR reporting.
    9. Notice applies only under 26 USC §6050I and requires the filer of the IRS Form 8300 to provide notice of the filing of the Form 8300 to the person whose transaction was the subject of the filing. Such notice is required to be given on or before January 31 of the year following the calendar year for which the return was to be filed.

     

9.5.5.3.6.2  (11-04-2004)
Form 8300 Filing Requirements

  1. Any person engaged in a trade or business for purposes of the Internal Revenue laws who receives in the course of the trade or business cash/currency in excess of $10,000 in a single transaction or two or more related transactions is required to file Form 8300. Trades and businesses include automobile, airplane, mobile home and boat dealers, farm equipment dealers, dealers in precious metals and jewelers, real estate brokers, doctors, lawyers, accountants, pawnbrokers, insurance companies, loan or finance companies, and travel agencies and any person who receives cash/currency in excess of $10,000 for the account of another person, e.g. a person who collects delinquent accounts receivable for a car dealer.

9.5.5.4  (11-04-2004)
THE MONEY LAUNDERING INVESTIGATION AND DISCLOSURE

  1. A money laundering investigation is different from a typical tax investigation. The following sub-sections will discuss some of those differences.

9.5.5.4.1  (11-04-2004)
Pure Money Laundering Investigations vs. Concurrent Tax and Money Laundering Investigations

  1. In order for a conspiracy under 18 USC §371 or 18 USC §1956(h) to be considered a pure money laundering investigation, the object of the conspiracy must relate to enforcement of 18 USC §1956 or 18 USC §1957 or Title 31, rather than Title 26. However, investigations under 18 USC §1956(a)(1)(A)(ii) are, by definition, tax-related.
  2. Potential violations of Title 26 by persons outside of a money laundering investigation, discovered during a pure money laundering investigation, may be segregated and investigated independently of the money laundering grand jury investigation. However, if the Title 26 evidence is so interrelated with the money laundering investigation that it cannot reasonably be segregated, then follow the procedures Assisting Grand Juries to Obtain Title 26 Grand Jury Information in IRM 9.5.2, Grand Jury Investigations. This section must also be followed if a concurrent income tax and money laundering grand jury investigation is desired.

9.5.5.4.2  (11-04-2004)
Grand Jury vs. Administrative Investigation

  1. Money laundering investigations will ordinarily be conducted by the grand jury process. An IRS summons may be used to obtain evidence in a joint Title 26 and 18 USC §1956 or 18 USC §1957 or Title 31 administrative investigation. An IRS summons may not be used in pure money laundering investigations (an investigation where a related tax violation is not involved).

    Note:

    If there is an approved grand jury investigation, administrative summonses will not be utilized.

     

9.5.5.4.3  (11-04-2004)
Database Queries

  1. Numerous law enforcement databases can be queried for use in money laundering investigations, including TECS, CBRS (Detroit Computing Center), EPIC, FinCEN, and the Fedwire System. Forms 8300 cannot be accessed through the IRS IRMF database for pure BSA or money laundering (non-tax) investigations.

    Note:

    EPIC inquires are limited to narcotics-related investigations.

     

9.5.5.4.4  (11-04-2004)
Title 26 USC §6103 Disclosure Provisions for Money Laundering Investigations

  1. Indications of money laundering violations will be identified from either tax information protected by the disclosure provisions of 26 USC §6103, including returns and return information as defined in 26 USC §6103(b)(1) and (2), or from sources not protected by 26 USC §6103. (See IRM 9.3.1, Disclosure.)
  2. Returns and return information include tax and information returns and other tax information secured from IRS sources/files or developed by the IRS in determining a person’s tax liability. Title 31 reports (CTRs, SAR Forms, FBARs, CMIRs) are generally not returns or return information. However, if a copy of a Title 31 report is used in a tax or tax-related investigation or placed in a tax investigatory file, it will be return information protected by 26 USC §6103. (See IRM 9.3.1, Disclosure).
  3. Forms 8300 filed prior to January 1, 2002, are considered to be tax returns protected by 26 USC §6103. (See IRM 9.3.1, DIsclosure).

9.5.5.4.5  (11-04-2004)
Pure Money Laundering Investigations Involving Information Not Protected by USC §6103

  1. Pure Title 18 and Title 31 money laundering investigations are those investigations not involving tax or tax-related violations. The Title 31 reports and other information collected by the IRS during the investigation are not protected by 26 USC §6103.
  2. A money laundering investigation under 18 USC §1956(a)(1)(A)(ii) is always tax-related, and is never a pure money laundering investigation.

9.5.5.4.6  (11-04-2004)
Use of Tax Information in Tax or Tax-Related Money Laundering Investigations

  1. Returns and return information may be accessed to initiate or conduct a money laundering investigation if the investigation is considered tax administration according to 26 USC §6103(b)(4). (See IRM 9.3.1, Disclosure, subsection 9.3.1.4) The key test is whether, under the facts and circumstances of the particular investigation, the money laundering provisions are considered related to the administration of the Internal Revenue laws. This is commonly known as the related statute call. (See IRM 9.3.1, Disclosure, subsection 9.3.1.4.3.1.1.2.)

9.5.5.4.7  (11-04-2004)
Use of Tax Information in Pure Money Laundering Investigations

  1. If, after evaluation of Title 31 reports and other information collected during the (initial) investigation, a determination is made to conduct a pure money laundering grand jury investigation (e.g., the related statute test is not met), returns and return information may not be disclosed to Treasury (including IRS) and DOJ employees, except through the ex parte court order provisions of 26 USC §6103(i)(1). (See IRM 9.3.1, Disclosure.)
  2. Title 26 USC §6103(i)(4) ex parte court order permits tax information obtained under 26 USC §6103(i)(1) and (2) to be used in civil proceedings such as forfeitures. In addition, 26 USC §6103(i)(4) permits the information to be used for 18 USC §981 forfeitures related to the non-tax violations of 18 USC §1956 or 18 USC §1957, or Title 31 USC §5313(a) or 31 USC §5324(a)(b).

9.5.5.4.8  (11-04-2004)
Use and Disclosure/Dissemination of Title 31 Report Information- Treasury Dissemination and Title 26 Return Information (Form 8300)

  1. Effective January 1, 2002, filing Form 8300 is required under both Title 26 and Title 31. Because IRS enforces both the Internal Revenue laws and the BSA laws, IRS special agents have access to Form 8300 information for investigating potential criminal violations of Title 26 and/or Title 31. However, each Title has rules governing access and disclosure of information gathered under the respective statutes. Briefly, the rules under Title 26 strictly limit disclosures whereas the rules under Title 31 are less restrictive. (See IRM 9.3.1, Disclosure, subsection 9.3.1.4.3.)
  2. The IRS maintains Form 8300 information in two databases, i.e., The Currency and Banking Retrieval System (CBRS) and the Information Return Master File (IRMF). Most, but not all, Form 8300 information filed after January 1, 2002 and maintained in the CBRS database is designated as information reported under Title 31 and is accessible for Title 31 investigative purposes. Form 8300 information filed before January 1, 2002 and contained in CBRS is considered to have been reported under Title 26 and access and disclosure is governed by 26 USC §6103. All Form 8300 information maintained and accessed via the IRMF database is considered return information and the access and disclosure of that return information is governed by 26 USC §6103.
  3. IRS special agents must be cognizant of the investigative purpose for which the information is being sought to protect against unauthorized disclosures.
  4. Generally, disclosure limitations for Forms 8300 vary depending on whether the reporting violation is being investigated under 26 USC §6050I or 31 USC §5331. (See IRM 9.3.1, Disclosure.)

9.5.5.4.8.1  (11-04-2004)
Return Information– Form 8300

  1. If the special agent is investigating the violation under 26 USC §6050I, generally, the Form 8300 and underlying files may be disclosed as part of a referral for a grand jury tax investigation or a referral for criminal tax prosecution. Title 26 Form 8300 information may also be disclosed for law enforcement purposes in response to a written request, pursuant to 26 USC §6103. (See IRM 9.3.1, Disclosure.)
  2. Under 26 USC §6103(l)(15) special agents may access Title 26 Form 8300 information contained on CBRS without a written request. However, if additional Title 26 information is sought beyond the information on/from the Form 8300, a related statute call determination will be necessary.
  3. Alternatively, special agents investigating a non-tax violation have the option of obtaining the Title 26 Form 8300 information, the form itself, and related files pursuant to ex-parte court order.
  4. Forms 8300 are treated as returns under 26 USC §6103. Filed Forms 8300 that are not required by law to be filed (i.e., regarding a transaction less than $10,000 or reporting a transaction designated by the filer to be suspicious) are generally ineligible for disclosure under 26 USC §6103(l)(15).

9.5.5.4.8.2  (11-04-2004)
Bank Secrecy Act Report Information

  1. Under Title 31, Department of Treasury permits IRS to disclose BSA report information to Federal, state and local agencies for use in criminal, tax and regulatory enforcement matters, including BSA enforcement. This permission allows disclosure to investigators and prosecutors. Such disclosures must contain a warning that such information received will not be further disclosed except for official purposes relating to the investigation or matter for which it was sought. Additionally, Department of Treasury requires that IRS must keep a log of all such disclosures. The authority to release BSA report information is delegated to the SACs.
  2. For Title 31 information on financial institutions not within the jurisdiction of the IRS where the related statute call test has been met, but prosecution potential is lacking, the SAC will forward a summary of the facts (absent tax information) on Form 5104 to the Chief, CI, who will advise the Director, Office of Regulatory Programs at FinCEN.

9.5.5.4.8.3  (11-04-2004)
Use and Disclosure of Form 8300 Information

  1. Federal, state, local, and foreign governmental agencies can obtain Form 8300 information pursuant to 26 USC §6103(l)(15). The information is subject to the disclosure safeguard provisions of 26 USC §6103(p)(4).
  2. The Form 8300 information can be used for civil, criminal and regulatory purposes.

    Note:

    Form 8300 information disclosed under 26 USC §6103(l)(15) cannot be used for tax administration purposes by the recipient agency.

     

9.5.5.4.8.4  (11-04-2004)
Authority to Release Form 8300 Information

  1. Internal Revenue Delegation Order 156, grants the authority to disclose Form 8300 information to:
    1. Chief, Criminal Investigation
    2. Director, Government Liaison & Disclosure
    3. Special Agents in Charge, Criminal Investigation

     

9.5.5.4.8.5  (11-04-2004)
Procedure for Disseminating Form 8300 Information

  1. In order for other agencies to receive Form 8300 information from the IRS, they must first apply to and receive approval from IRS Disclosure. This application must be made in writing and must include as acceptable Safeguard Procedures Report which addresses the following issues: Responsible Officer, Location of the Data, Need and Use, System of Records, Secure Storage of the Data, Limiting Access to the Data, Disposal, and Computer Security. The application letter and Safeguard Procedures Report should be sent to Disclosure, Office of Safeguards, Room 3619/IR, Washington, DC 20224.

    Note:

    State and local agencies may access Form 8300s filed after January 1, 2002 from their respective state Gateway representative. The local IRS, CI SAR-RT coordinator can identify the appropriate local Gateway representative.

     

  2. As of November 1, 2000, the following Federal, state, and local agencies have applied for and received approval from IRS Disclosure to receive Form 8300 information from the IRS:
    Federal Agencies
    1. Central Intelligence Agency
    2. US Customs (Office of Investigations)
    3. US Customs (Internal Affair)
    4. FBI
    5. US Attorney's Office
    6. Criminal Division, Department of Justice
    7. US Secret Service
    8. US Probation Office, Tulsa, Oklahoma
    9. National Security Agency
      State/Local Agencies
    10. Aurora, Illinois Police Department
    11. Coral Springs, Florida Police Department
    12. Louisiana State Police
    13. Metropolitan Police Department of Nashville, Tennessee and Davidson County
    14. Mississippi Department of Public Safety) Office of Statewide Intelligence, Florida Department of Law Enforcement
    15. Pembroke Pines, Florida Police Department
    16. Miami Beach Police Department

     

  3. Approved agencies must request Form 8300 information in writing on agency letterhead. Local requests, except from CIA or NSA, will be completed at the field office level.
  4. Requests submitted by the CIA and NSA or foreign governmental agencies for Form 8300 information will be provided through the office of the Chief, CI. Forward any requests submitted to the SAC from those agencies to: Chief, CI, Attn; Director, Financial Crimes, CI:OPS:FC.
  5. A record of all information provided to requesting agencies must be maintained on a log Bank Secrecy/8300 disclosures. (See Exhibit 9.5.5–2 Bank Secrecy/8300 Disclosure Log). The information on the log is to include:
    1. the date the request is received
    2. the date the information is released
    3. the name of the requesting agency
    4. the agency official to whom the information is released
    5. the type of information released
    6. the special agent assigned

     

  6. A copy of the log must be provided to the Chief, CI, Attn: Director, Financial Crimes, CI:OPS:FC the first business day following the close of the calendar quarter.
  7. The Financial Crimes section will report to Disclosure, Office of Safeguards by the fourth business day of the month.
  8. When IRS and the attorney for the government are among the participants of a multi-agency task force, and there is an investigative desire to obtain Form 8300 information pursuant to 26 USC §6103(I)(15), the procedure will be for the attorney for the government assigned to the task force to request the information. Safeguards will therefore be centralized with the attorney for the government. The CI participants of the task force will obtain the 8300 information and will be able to share the Forms 8300 and related information with other members of the task force in accordance with Dissemination Policies and Guidelines for Release of Information Reported Under the Provisions of the Bank Secrecy Act, dated December 6, 1988, §IV.C.1. Attached for reference is a copy of the Dissemination Policies and Guidelines. Further, in accordance with the Disclosure Safeguard Provisions of 26 USC §6103(p)(4) and per IRM 9.4.13, Financial Investigative Task Force, the CI task force participant will maintain a dissemination log and submit a copy of the log to their field office's Title 31 coordinator on a quarterly basis. The Title 31 coordinator will then include the information in their quarterly report to Headquarters.

9.5.5.5  (11-04-2004)
Prosecution Recommendations and Civil Referrals

  1. Prosecution recommendations for pure money laundering offenses will be referred directly from the SAC to the attorney for the government; however, a direct referral cannot be made in an 18 USC §1956 investigation when a financial transaction is intended to engage in conduct constituting a violation of 26 USC §7201 or 26 USC §7206, under 18 USC §1956(a)(1)(A)(ii), since these are income tax investigations due to the potential Title 26 violations. Prosecution recommendations for income tax and money laundering violations will follow ordinary review channels.
  2. For a Title 31 violation which lacks criminal potential, such as the failure to file a single CTR, or early destruction of bank records, a violation summary will be prepared in memorandum form and forwarded to the Chief, CI, who will transmit it through channels to the Director, Office of Regulatory Programs at FinCEN.
  3. If money laundering violations within the jurisdiction of the IRS are discovered, and CI does not desire to conduct a criminal investigation, a referral may be made to the examination function of the other operating divisions.

9.5.5.6  (11-04-2004)
Requests for Witnesses to Testify

  1. Witnesses are necessary to introduce the documents filed under the Department of Treasury regulations. Expert witnesses are available to assist in the presentation of money laundering investigations at trial.

9.5.5.6.1  (11-04-2004)
Witnesses to Testify for Filing of CTRs, FBARs, and Forms 8300

  1. Requests for witnesses to testify as to the filing of CTRs, CTRs by Casinos, FBARs, and Forms 8300 should be made to the IRS Detroit Computing Center, Attn: CI Program Coordinator, PO Box 32063, Detroit, MI 48232–0063, (313)234–1077 or (313)234–1613.
  2. All CTRs, CTRs by Casinos, FBARs, and Forms 8300 are processed by the Detroit Computing Center and are indexed on the CBRS and the Treasury Enforcement Communications System (TECS), with the exception that Forms 8300 filed prior to January 1, 2002, are not indexed on TECS. CBRS and TECS should be queried to determine if CTRs, CTRs by Casinos, FBARs and Forms 8300 filed prior to January 1, 2002, were filed for reportable transactions. However, access to these Forms 8300 is bound by 26 USC §6103 rules.
  3. See IRM 9.4.4, Requests for Information for how to request special computer runs summarizing CTRs by Casinos, copies of CTRs, copies of Forms 8300, and copies of a CMIR, and for requesting copies or special computer runs of FBARs.

9.5.5.6.2  (11-04-2004)
Money Laundering Expert Witnesses

  1. The Director, Financial Crimes, will maintain a cadre of money laundering expert witnesses consisting of special agents from each of CI's six areas of field operations. These expert witnesses will be available to assist the field offices in the prosecution of money laundering investigations, and to lecture on money laundering issues at Continuing Professional Education (CPE) and other similar events, both internal and external.
  2. Requests for assistance from money laundering expert witnesses will be forwarded by the SAC, located within the judicial district, which is requesting assistance, to the Director, Financial Crimes, CI:OPS:FC. The request will include a brief summary of the investigation, tentative trial dates and a point of contact. In order to ensure that expert witness testimony can be arranged, requests will be made as soon as it can be reasonably anticipated that expert witness testimony is required in a particular investigation.

9.5.5.7  (11-04-2004)
Whistle-blower Protection and Awards in Money Laundering Investigations

  1. Title 31 USC §5328 provides whistle-blower protection to employees of financial institutions and non-depository financial institutions who report violations of 18 USC §1956, 18 USC §1957, 18 USC §1960, or Title 31 to regulators or law enforcement officials.
  2. Title 28 USC §524(c)(1)(B) allows for rewards to informants to be made out of the DOJ Asset Forfeiture Fund for information pursuant to money laundering violations relating to 18 USC §1956 and 18 USC §1957, 31 USC §5313 and 31 USC §5324, and 26 USC §6050I. Field office requests to seek funds for awards should be sent to the Chief, CI.
  3. Title 31 USC §5323 provides for the payment of an award to an individual for original information which leads to the recovery of a criminal fine, civil penalty, or forfeiture, which exceeds $50,000, relating to violations of Title 31. The award is limited to 25 percent of the net amount collected, or $150,000, whichever is less. A request for award should specify the original information that was provided and its value. The request for award should be forwarded by the SAC through the Director, Field Operations to the Chief, CI, who will forward the request to the Director, Office of Regulatory Programs at FinCEN.

9.5.5.8  (11-04-2004)
Use of Money Laundering Posters

  1. Publication 1241, Title 31 Poster, and Publication 1428, Forms 8300 Poster, were designed to be voluntarily displayed in the employee areas of financial institutions or by trades or businesses to alert employees and/or customers of the IRS' interest in suspicious currency and/or monetary transactions, and to provide CI telephone numbers to report suspicious currency transactions. The publications should be distributed by special agents during contacts or presentations with financial institutions and trades or businesses.

Exhibit 9.5.5-1  (11-04-2004)
Specified Unlawful Activity

Specified Unlawful Activity
The following Tables lists all of those violations of Federal and state or foreign law identified as "specified unlawful activity" under
18 USC §1956(c)(7):



SPECIFIED UNLAWFUL ACTIVITY
18 USC §1956 and 18 USC §1957
& Money Laundering Control Act of 1986
Title: Section: Violations of Federal Law Relating to: Appearing in Title 18, Section: Effective Date:
7 2024 Food Stamp Program (felony violations involving a quantity of coupons having a value of not less than $5,000) 18 USC §1956(c)(7)(D) 10/28/94
8 1324 Immigration and Nationality
(bringing in and harboring certain aliens, if the act indictable was committed for the purposes of financial gain) 		18 USC §1961(1)(F) 04/24/96
8 1327 Immigration and Nationality
(aiding or assisting certain aliens to enter, if the act indictable was committed for the purpose of financial gain) 		18 USC §1961(1)(F) 04/24/96
8 1328 Immigration and Nationality
(importation of alien for immoral purpose, if the act indictable was committed for the purpose of financial gain) 		18 USC §1961(1)(F) 04/24/96
11 101 et seq. Bankruptcy
(any offense involving fraud connected with an investigation under Title 11 except an investigation under 11 USC §157) 		18 USC §1961(1)(D) 10/27/86
15 78m
78dd–1
78dd–2
78ff 		Foreign Corrupt Practices Act
(felony violations of the Foreign Corrupt Practices Act) 		18 USC §1956 (c)(7)(D) 10/28/92
18 32 Aircraft and Motor Vehicles
(destruction of aircraft or aircraft facilities) 		18 USC §1956(c)(7)(D) 4/24/96
18 37 Aircraft and Motor Vehicles
(violence at international airports) 		18 USC §1956(c)(7)(D) 4/24/96
18 115 Assault
(influencing, impeding, or retaliating against a Federal official by threatening or injuring a family member 		18 USC §1956(c)(7)(D) 4/24/96
18 152 Bankruptcy
(concealment of assets; false oaths and claims; bribery) 		18 USC §1956(c)(7)(D) 10/27/86
18 201 Bribery, Graft and Conflicts of Interest
(bribery of public officials and witnesses) 		18 USC §1961(1)(B) 10/27/86
18 215 Bribery, Graft and Conflicts of Interest
(commissions or gifts for procuring loans) 		18 USC §1956(c)(7)(D) 10/27/86
18 224 Bribery, Graft and Conflicts of Interest
(in sporting contests) 		18 USC §1961(1)(B) 10/27/86
18 287 False Claims involving Health Care programs 18 USC §1956(c)(7)(F) 8/21/96
18 351 Congressional Cabinet, and Supreme Court Assassination Kidnapping, and Assault (Congressional Cabinet, and Supreme Court assassination, kidnapping, and assault; penalties) 18 USC §1956(c)(7)(D) 4/24/96
18 371 Conspiracy involving Health Care Programs 18 USC §1956(c)(7)(F) 8/21/96
18 471