Understanding Suspicion in Financial Crime

Suspicion is the single central point of all counter-money laundering systems.

It is also the least understood.


The Essential Guide to suspicion and Suspicious Activity Reporting in financial crime.

For financial crime risk and compliance officers, policy and procedure designers, legislators, regulators, investigators, regulators, FIU officers, police officers, auditors, judges, designers of automated systems ( regtech / fintech )

Understanding Suspicion in Financial Crime
  • £120.00

    Individual inc UK VAT where apt

    Buy now

"How do I know if I'm suspicious?"

It's a simple question without a simple answer.

Until now.


Every Financial Crime Risk and Compliance Officer  dreads being asked one, simple, question. 

It's the same question every time: "How do I know if I'm suspicious?" 

It's a simple question without a simple answer. 

Until now. 


To arrive at that simple answer is far from simple. 


In "Understanding Suspicion in Financial Crime" Nigel Morris-Cotterill, a former litigation lawyer who has been a counter-money laundering strategist for more than twenty-five years, analyses legal and regulatory regimes, psychology, social sciences, even metaphysics and pop culture. 

He draws on a huge range of material from academic studies to regulatory and legal findings, from movies to his own ability to identity and manage far-off risks. 

He identifies characteristics that encourage or discourage the recognition of suspicion and the filing of SAR / STR s. 

The course is non-linear, in "phases" rather than chapters, as multiple approaches are examined in parallel rather than in sequence. 

There are surprisingly few overlaps until the moment when a decision as to suspicion has to be made. 

This, Morris-Cotterill, says is at the heart of why the question is so hard to answer. 

Simply, there are far too many and far too diverse starting points - and law and regulation are, more often than not, not among them. 

The course is based on a serious book covering a serious subject but it is written in a simple way.  The book is now out of print. This course is, in effect, an updated and revised second edition.

Many readers will have English as a second or third language. Also, many do not want and do not have the time to dredge through academic terms and management-speak. 

"Understanding Suspicion in Financial Crime" is a jargon-free zone.  Buzzwords and acronyms are avoided

Morris-Cotterill hunts for that elusive answer, the one simple, single sentence that all staff can understand, the sentence that will give the beleaguered Financial Crime Risk and Compliance Officer peace of mind, the sentence that will mean they do not stand, eyes wide open like a deer in the headlights, hoping for inspiration. 

For designers of automated systems, the insights in this book will improve the thinking behind RegTech development and facilitate the design of better algorithms and tell machines that learn how to look in addition to what to look for.

The answer to the question is as unexpected as it is simple, and easy to understand by staff at all levels. 

Equally importantly, the course answers the hard questions asked by investigators, prosecutors, judges and regulators: 

what is suspicion?

how is it formed? 

when it is acted upon (or not formed or not acted upon)?

 Across the world, cases report Judges lamenting the lack of guidance on these matters, and the lack of an effective definition of suspicion. 

Now, at last, there is one, drawing on cases and legislation from many jurisdictions, using non-legal sources to provide both context and explanation.

 --------------- 

For more about Nigel Morris-Cotterill, his expertise and availablilty, see www.countermoneylaundering.com

About this course

Who should attend?

Financial Crime Risk and Compliance Officers

MLROs

Legal advisers (in house and external)

Internal Audit

External Audit

Investigators, prosecutors, advocates

Judges

Journalists who want to understand the central principle upon which financial crime laws are based.


Paperback published  2015 (out of print)

This course is updated 2021.


Level: advanced

Pre-requisites: Using Quick To Learn More - manual and FAQ.

Language: English.

Portable CPD (TM): 15 hours

Certificate in Financial Crime Risk and Compliance (cFCRC) points: 45

Examination: No

Certificate of Completion: Yes.

Access: unlimited 12 months. Includes all updates during access period.

Price includes UK VAT where applicable.

Payment gateway: Stripe

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Phases

This list is in development. Come back often.

  • 1

    About.....

    • Caveat and Legal

    • Status of this Course

    • Prerequisite

  • 2

    Preparation.

  • 3

    Prephase: Basics

    • What is money laundering?

    • When things start with a lie.....

    • Nine bullet points to remember

    • Literal v lateral thought.

    • Compliance v Good Sense.

    • "Sit there and don't move until I tell you to."

    • Everything hinges on the levels of awareness applied to circumstances that present themselves.

    • Why awareness is essential.

    • Protecting your company costs less than a cup of coffee.

  • 4

    Phase One: Managing Expectations

    • Great - and not so great - Expectations

    • When SEP is SOP

    • When "normal" is abnormal

    • When normal conduct has significant, adverse, consequences.

    • Our view of the behaviour of others is coloured by our view of our own behaviour.

  • 5

    Phase Two : Rationality or feeling - an introduction

    • What do you know?

    • Being naughty.

    • The woman/woman/figure in the window.

    • Natural selection - it's not always Darwinian.

    • The very pulse of the machine

    • How style affects the message.

  • 6

    Phase Three : The role of facts in defining suspicion - the Financial Crime Risk and Compliance Officer as "judge"

    • Fossett's cat.

    • Court: "There is no English authority in a criminal context to which we were referred on the meaning of "suspect" or "suspicion." "

    • A selection of legal approaches to defining "suspicion." 1

    • A selection of legal approaches to defining "suspicion." 2

    • A selection of legal approaches to defining "suspicion." 3

    • A selection of legal approaches to defining "suspicion." 4

    • This is what we know.....

    • Case Studies.

  • 7

    Phase Four : "As a matter of fact..."

    • George Orwell 1903-1950

    • Berkeley's Law (not actually a law).

    • In a court, "truth" does not equal "fact".

    • Burden of Proof: an overview

    • He who lies least....

    • Evidence and fact outside Court.

    • When what we "know" is wrong.

    • Is Justice blind? And of so, what does it mean?

    • Facts and beliefs are fluid

    • The wisdom of the Ancients guides us today.

    • In isolation, a single fact is rarely sufficient to form suspicion.

    • Spontaneity v learned responses

    • When opinions become "facts" for some but not for others.

    • How are opinion formers like money launderers?

    • Opinion masquerading as fact

    • Are all "facts" true and are all "truths" fact?

    • All lies are untrue but not all untrue statements are lies.

    • How culture affects decision making.

    • False statements made without express intent

    • A "mere matter of opinion" or a "representation of fact"

    • Getting starry eyed about facts.

    • It's called my grandma....

    • Facts change depending on the circumstances.

    • FIxing facts.

    • My fact, your fact, his fact, her fact, their fact.

  • 8

    Phase Five: The relationship between facts and suspicion.

    • Coca Covid and magnetised arms.

    • Are facts conclusive or indicative?

    • Editorialising and "fact."

    • A predispotion to believe..

    • It must be true - it's in the 'papers (or on my computer)

    • Means, Motive, Opportunity - just dots in a picture.

    • The One Fact principle.

    • Predictive policing.

    • The absence of facts is a fact in itself.

    • Pattern Recognition

    • Tossing and Turing

  • 9

    Phase Six : What is suspicion?

    • Edmund Burke on suspicion.

    • " a cognition of mistrust"

    • Denouncement as a result of suspicion.

    • Dealing with assets subject to suspicion.

    • Case Study - assets frozen on suspicion.

    • Case Study - the formation of suspicion

  • 10

    Phase Seven : How do regulators define suspicion?

    • Do regulators define suspicion?

    • The dangers of listing activity that may be an indicator of suspicion.

    • How are you spelling that?

    • UK financial sector Guidance on suspicion etc.

    • "Limited" support to terrorists.

  • 11

    Phase Eight : How do we decide if we are suspicious?

    • Dropped capitals

    • Being alert has physiological elements.

    • How "work from home" and lockdowns adversely affect judgement.

    • Lack of food affects decision making.

    • Hormones and decision making.

    • Variables are not only mathematical.

    • The dangers of sticking to your guns.

    • We know what we know but how much do we know?

    • "Concentration" and "focus" are not the same.

    • The paradox of choices.

    • At the heart of every money laundering case is a fraud.

    • The strange case of Holly Williams

    • It's in the computer so it must be true.

    • The Holliest of Hollys

    • A brutal truth: people just aren't thinking about what they need to think about to help identify suspicion.

  • 12

    Phase Nine: Are we there, yet? (or, am I suspicious enough to need to make a report?)

    • Suspicious of what?

    • When is a transaction money laundering and when is it part of the criminal conduct?

    • Appropriation and credit/debit cards.

    • Defensive and discretionary reports.

    • At what stage should I report suspicions?

    • Note re systems in non-reporting institutions

  • 13

    Phase Ten: Trust=Truth=Fact? Is suspicion the opposite of trust?

    • Trust and Trustworthiness

    • Is suspicion the opposite of trust?

    • A dam, a Hawk and a plane full of drugs and money.

    • Trust in commercial relationships.

  • 14

    Phase Eleven: Challenges in a multi-cultural society.

    • Morality and ethics.

    • When culture turns normal into unacceptable.

    • When a culture tries to dominate.

    • Deciding what is "wrong."

    • Is a sense of "community" an obstruction to forming suspicion?

    • Bringing "communities" into Society

    • Context - but who decides which context to apply?

  • 15

    Phase Twelve: Due Diligence: the human perspective

    • The biggest spanner in the fraudster's toolkit.

    • I'm going to give you money. Do you accept it?

    • Centralised control is like ripples in a pond: strong at the centre, becoming weaker with distance.

    • Of roots and branches

    • Infiltration.

    • Who polices the police?

    • It's, like, people like them like people like us to think people like them are people like us. Like.

    • A circle of trust.

    • Inherent propriety.

    • Hedging the regulatory regime.

    • Identifying suspicion: corporate crime

    • The fraud of valuing companies on "revenues."

    • Cultural issues of tax evasion

    • Imorality v illegality

    • Who's illegality do we consider?

    • If you want to do business here, it'll cost you.

    • The changing nature of relationships between bankers and clients

    • Sherlock Holmes (Sir Arthur Conan Doyle 1859-1930)

  • 16

    Phase Thirteen: cause for reasonable suspicion v reasonable cause for suspicion

    • Johann Wolfgang von Goethe (1749 - 1832)

    • Same words, very different meaning.

  • 17

    Phase Fourteen : nature v nurture

    • Why do criminals commit crime?

    • Darwin, Mendell, Freud and Maslow.

    • How Maslow's study helps to identify financial criminals, and those who may become financial criminals.

    • Risk appetite / Risk aversion

    • Jeremy Bentham (1741-1832)

  • 18

    Phase Fifteen: Call centres and other remote operations

    • A primary point of contact.

    • Why customers hate call centres

    • Hi, I'm Ed. Ed Ache.

    • How call centres stand in the way of both due diligence and the forming of suspicion.

    • KYC in call centres.

    • Call centres - an alternative approach that works.

    • Outsourced and off-shored information gathering and problem solving.

    • Chasing lower costs, adding financial crime and compliance risk.

    • Functions can be outsourced but responsibility cannot.

  • 19

    Phase Sixteen: Financial Crime Risk Officers and the need for full information

    • The Smartest Guy in the Room

    • Warning signs are a trigger for further action, not an end result.

    • Financial Crime Risk Officers must have full information: bank secrecy

    • How Riggs feigned innocence and blamed others for their failures. And almost got away with it.

    • What is "bank secrecy"?

    • The end of the global financial institution?

    • Internal information flows

  • 20

    Phase Seventeen : building a simple money laundering risk matrix

    • Early days

    • A risk matrix is an algorithm and an algorithm is a risk matrix.

    • Can we trust our own judgement?

    • That's a big number.....

    • The point of the exercise

    • Building a simple risk matrix

    • Formulating a risk policy: Country Risk

    • One last point on the chessboard puzzle

  • 21

    Phase Eighteen: Where does "belief" become "fact" and where does it become delusion?

    • Where the outlandish is considered reality.

    • The ascent that never was.

    • Through a glass darkly.

    • Monday, Tuesday, Wednesday, Doomsday....

    • In this phase we have learned:

  • 22

    Phase Nineteen: Can compliance be measured?

    • Is your risk and compliance system working properly?

    • Your entire company already knows how to do compliance, they just don't call it that.

    • Ticking boxes is compliance; it is not a risk-based approach.

    • Case study - KYE

    • Case Study - KYE

    • Know Your.. actually, know everyone you deal with.

    • Money within financial groups.

    • Two words....

    • CASE STUDY: the Swiss Casino

    • The fallacy of comfort.

  • 23

    Phase Twenty : the role of language in relation to suspicion

    • How changing language causes confusion and division

    • A better society is here; there is no need to long for a better society

    • Little changes in phraseology have big effects on import.

    • The warm embrace of familiarity of terminology.

    • Accented speech.

    • "You fink I'm thucking' fick."

    • Accented discrimination

    • Vive la difference, and all that.

    • Using language to segregate.

    • Language changes with context - and therefore obscures or clarifies information

    • In this phase we have learned...

  • 24

    Phase Twenty-one: The danger of autocracies.

    • Autocracy: a system of [control] by one person with absolute power; domineering rule or control

    • 13 May, 2003.

    • Exercise

    • Delusions of grandeur by an incompetent management?

    • Doing business the company does not understand.

    • Dumping toxic assets long before the global financial crisis.

    • "A lack of sceptical questioning and analysis "

    • Causes for concern but are they causes for suspicion?

    • The hand and influence of one director were paramount.

    • A history lesson in less than 35 words.

  • 25

    Phase 21 - Annex: Cross-Border Manipulation of Equity Markets (2013)

    • In this paper:

      FREE PREVIEW
    • Early dematerialistion of assets.

    • Accounting standards facilitate fraud on investors.

    • Accounting standards

    • Audit

    • Valuation of companies

    • The marketing of shares to offshore persons.

    • What those cases demonstrate.

    • The marketing of shares by offshore persons (boiler rooms)

    • Due diligence issues of alternative / private investment vehicles.

    • Chains of responsibility

    • What does it tell you?

  • 26

    Phase Twenty-two: of trees, forests, sound, a cat in a box and black holes.

    • Levels of cognisance.

    • Don't skip the footnotes for therein lies truth.

    • Conclusions drawn by inference and the application of known facts.

    • Sometimes ripples pre-date the event.

    • Yes, no or maybe?

    • Where imprecision and algorithms meet.

  • 27

    Phase Twenty-three: What is money?

    • Coming 3 June 2021

      FREE PREVIEW
    • Money and money movements.

    • The invisible transfer of wealth.

    • An enterprise is an enterprise, regardless of its legality.

    • What represents money?

    • "Money" doesn't matter. Data and tokens matter.

    • Banks that don't deal in "money" as we know it.

    • Digital dollars, virtual payments, real world risks and regulation.

    • Hiding, moving and investing.

    • Cash - a rapidly rotating crop.

    • Bitcoin was old hat when it was launched.

  • 28

    Phase Twenty-four: Politically Exposed Persons (PEPs)

    • What is a Politically Exposed Person and are the definitions helpful? 1

    • What is a Politically Exposed Person and are the definitions helpful? 2

    • Points to consider

    • Case Study - how senior is "senior?"

    • Case Study: Family Members

    • Anatomy of a complex international money laundering scheme by a politically exposed person.

    • Profiling, nationality and discrimination.

    • PEPs and the revolving door.

    • Government Linked Companies (GLC) / State Owned Enterprises (SOE).

    • In your own time....

    • Case Study: the Prime Minister and the multi-millionaire.

    • Consider: Are PEP issues inevitably tied up with bribery, corruption and plunder?

    • PEPs & Terrorism.

    • PEPs and Sanctions

  • 29

    Phase 25: Diplomatic Immunity

    • What is a diplomat?

    • Who gets diplomatic immunity?

    • Protections as set out in the Convention.

    • Abuse

    • The USA's different approach.

    • Forming suspicion

  • 30

    Phase 26: short points.

    • Extra Territorial effect of anti-bribery laws.

    • Corporate Social Responsibility

    • The secretive nature of commercial corruption.

  • 31

    Conclusion

    • It all comes down to this.

  • 32

    Postscript: What is the biggest lesson in this course?

    • Coming 11 June 2021

  • 33

    Phase 27: The fundamental disconnection between law and regulation and those it applies to.

    • From constable to detective: the changing nature of obligations on financial institutions and the difficulties arising. (1)

    • From constable to detective: the changing nature of obligations on financial institutions and the difficulties arising. (2)

    • From constable to detective: the changing nature of obligations on financial institutions and the difficulties arising. (3))

    • A dangerous game of chicken (1)

    • A dangerous game of chicken (2)

    • A dangerous game of chicken (3)

    • A dangerous game of chicken (4)