The Internal Revenue Service’s Criminal Investigation unit has embarked on a new initiative for engaging with financial institutions as it makes greater use of banking data to uncover tax and financial fraud.
IRS-CI released FY24 Bank Secrecy Act metrics Friday, demonstrating how it uses BSA data to investigate financial crimes. During fiscal years 2022 through 2024, 87.3% of IRS-CI’s criminal investigations recommended for prosecution had a primary subject with a related BSA filing, and adjudicated cases led to a 97.3% conviction rate, with defendants receiving average prison sentences of 37 months. IRS-CI also leveraged BSA data to identify $21.1 billion in fraud linked to tax and financial crimes, seize $8.2 billion in assets tied to criminal activity, and obtain $1.4 billion in restitution for crime victims.
Under the BSA, which Congress passed in 1970, financial institutions use suspicious activity reports to notify the federal government when they see instances of potential money laundering or tax evasion. The SARs data is used by agencies like IRS-CI to probe money laundering and related financial crimes.
A new IRS-CI initiative known as CI-FIRST (Feedback in Response to Strategic Threats) aims to establish ongoing engagement with financial institutions. They will receive quantifiable results from IRS-CI on how the agency uses suspicious activity reports to investigate federal crimes.
“Public-private partnerships thrive when everyone mutually benefits, and to enhance our partnership with the financial industry, we plan to launch CI-FIRST which will promote information-sharing, streamline processes, and demonstrate how valuable BSA data is to criminal investigations,” said IRS-CI Chief Guy Ficco in a statement.
As part of the CI-FIRST program, IRS-CI plans to streamline subpoena requests and share pointers with financial institutions on what to include in suspicious activity reports to maximize their impact. The program will address what’s working and what can be improved, offering continuous lines of communication between partners. IRS-CI headquarters will work with larger financial institutions that have a national and international presence, while its field office personnel will work with regional and community banks and credit unions.
IRS-CI special agents ran an average of 966,900 searches each year against currency transaction reports during the last three fiscal years. Close to 1,600 cases were opened in FY24 with at least one currency transaction report on the primary subject. The data also shows that 67.4% of cases opened by IRS-CI had a subject with one or more currency transaction reports below $40,000, with 50% of currency transaction reports involving amounts less than $22,230.
BSA data has also proven to be effective in helping IRS-CI combat narcotics trafficking and pandemic-era tax fraud. Since FY20, IRS-CI used BSA data to initiate nearly 1,300 investigations with ties to fentanyl and investigate alleged employee retention credit fraud totaling $5.5 billion.
Credit: Source link
