After the SAR: An Interview with Law Enforcement

Conversation with 30-year DEA veteran Mark Giuffre.

It’s an unfortunate industry truth that compliance folks are seldom able to witness the positive aftereffects of their work fighting financial crime. The nature of suspicious activity reporting means that – once a SAR has been submitted – the investigator responsible isn’t notified of how their work was received by law enforcement, or what positive outcomes it may have had on a case. 

Mark Giuffre, a 30-year veteran of the Drug Enforcement Administration, knows this fact better than most. Guiffre developed a passion for fighting financial crime as part of his long career with the DEA, and he now speaks about the importance of fighting financial crime around the globe. He is quick to acknowledge and celebrate the important role compliance professionals play in that process.

Giuffre sat down for an interview with Hummingbird, where we asked him questions about his work and career. His answers were thoughtful and illuminating, and should encourage and inspire compliance professionals everywhere. 

Note: the following interview has been edited for length and clarity. ‍

Hummingbird:
To get us started, would you mind telling us a little bit about your background?

MG:
Sure. My name is Mark Giuffre. I retired in 2017 after thirty years as a special agent with the U.S. Drug Enforcement Administration. My career began in Chicago, when I was in grad school. I was looking for action in life, and the DEA was recruiting. So when I was offered a position, I jumped at it. I didn’t originally have any real desire to be working in drug law enforcement, but as I progressed I became really passionate about it. I became very committed, not just to drug law enforcement, but to money laundering and other associated crimes as well. 

Hummingbird:
Let’s talk about your time with the DEA. How do you, as someone with 30 years of experience, describe the scope and reach of the illegal narcotics market in the United States?

MG:
The U.S. narcotics market is the number one in the world. It’s gigantic. It’s part of what fuels transnational crime groups: they are simply dead-set on getting all the product they can into the United States. 

Hummingbird:
Does that mean that the great majority of financial crime associated with the illegal drug market is centered here in the U.S. as well?

MG:
Not necessarily. The flow of illicit financial activity has changed. Over time, different organizations have controlled [drug] distribution. And that impacts illicit financial activity. A mound of money is pouring into the United States and then back to the countries that are sourcing. There are so many variables at play. 

Hummingbird:
As far as illicit financial activity is concerned, it seems like most Americans’ idea of money laundering is two guys in an alleyway exchanging a briefcase full of money. How does that square with your experience? 

MG:
The modern reality is that many significant people launder a huge amount of money without ever touching a dollar bill. So we really need to try and shift the public’s perception of money laundering and financial crimes. Because the idea of two guys bringing suitcases full of cash into a hotel room and handing them over to somebody – that’s not usually the case. It’s generally far more sophisticated.

Hummingbird:
Meaning that both compliance departments and law enforcement need to be equally sophisticated.

MG:
Yes. And banks – in my experience – have done that. They have people who are specially trained in crypto-crime, who are trained in trade-based crime. They’ve been very good about that.‍

"The modern reality is that many significant people launder a huge amount of money without ever touching a dollar bill."

Hummingbird:
Let’s talk about crypto for a moment. One of the most interesting things happening in law enforcement right now is the adoption of crypto blockchain technology as a financial crime investigations tool. In your opinion, how ready and willing are law enforcement professionals to take on and adopt new technologies like this? 

MG:‍
Law enforcement are very ready, willing, and able to adopt new technologies. Let’s use cryptocurrency as an example. Without question, law enforcement was skeptical of cryptocurrencies. Because cryptocurrencies were being used on the dark web to evade detection. But now, there’s no better evidence than the last three or four cases that have broken recently – with huge seizures and take-downs – to show that law enforcement understands and has developed an expertise using [blockchain] as an investigation tool.

Hummingbird:
How does law enforcement approach a financial crime investigation? How do you know where to start? With a drug case, for example, do you begin with the drugs and then move to the money, or do you grapple with them both at once? 

MG:
Frankly, it goes both ways. Part of it is really, “what reliable sources of information do you have?” What do you have coming in that’s actionable or corroborated by other information? All [law enforcement] agencies can have a plan and say, “Mr. X is our target.” We can have investigations open on Mr. X. We can be trying to recruit human sources of information, people who are close to Mr. X and who could give us valuable information. We could try to obtain enough information to get a judge to give a court order for an intercept of Mr. X’s communications devices. But the truth of the matter is, sometimes Mr. X is just not penetrable. He’s not in a vulnerable moment and the information [we’re bringing in] isn’t reliable no matter how hard we try.

Hummingbird:
Right. Moments where even if you have suspicions, you’re not able to pin anything down. 

MG:
That’s right. In criminal investigations, it’s all about corroboration. Because if you can’t independently corroborate information, you can’t take it to a judge. You can’t put it in an affidavit. You need corroboration. 

Hummingbird:
Can you give a quick description of what you mean by “corroboration?”

MG:
Sure. So, frequently law enforcement agencies will have human sources of information. Sometimes they’re called “informants” or “cooperating sources,” and these people aren’t saints. Which means that when law enforcement officers are collecting information and potential evidence from these people, they have to find a way to independently corroborate, or prove, that what their source said was true. 

Hummingbird:
Because otherwise you’d only have the word of your source to depend on. 

MG:
Exactly. So oftentimes, the critical role played by financial institutions in reporting suspicious activity is to corroborate something [law enforcement] already had. It’s corroborating information that we already had in our case investigation file, that was already in our database – but that was just sitting out there alone. And then this [suspicious activity report] comes in from a completely unrelated source, that has no ‘skin in the game,’ so to speak, and that often fills in the picture for something major that’s going on. And that’s the role of financial institutions. That’s where they’re so critical. ‍

"I really encourage people to have dialogue with law enforcement. There’s this 10-foot brick wall between law enforcement and compliance professionals. But that doesn’t restrict communication. It doesn’t restrict relationships. I really think there is more opportunity for dialogue between compliance and law enforcement."

Hummingbird:
So is a suspicious activity report (SAR) the last piece in your puzzle?

MG:
It’s often the last piece in the puzzle, but sometimes it’s the first piece, and sometimes it’s the piece when you’re a quarter of the way through, or halfway through…that’s the beauty of suspicious activity reports. When a SAR comes in in the middle of an operation that directly relates to the people we’re interacting with, that can be hugely significant. And it can often completely turn the focus of an investigation in another direction. “Oh – this is an associate of him? We wondered who was laundering his money. Now we know.” Frankly, SARs have turned what was sometimes strictly a narcotics investigation into a money laundering investigation. And vice versa. So it’s like a Joker, or a wild card. SARs are like a wild card for law enforcement because they can positively impact investigations in so many ways.

Hummingbird:
We know there’s a gap in between when a compliance professional submits a SAR to FinCEN and the beginning of a law enforcement investigation. And the fact of the matter is – an AML investigator may never know what ultimately happens as a result of their SAR. So tell us: how does law enforcement approach picking up a SAR? How do you decide what to focus on?

MG:
Well, the SAR narrative is the critical piece. And there’s a lot of training on how that should be done. Law enforcement is looking for very succinct, critical pieces of information. It’s the “who, what, when, where, why and how” – just like journalism. 

Hummingbird: 
Right. We see that a lot in SAR narrative writing workshops.

MG:
But it’s also about documenting patterns. Let me use a SAR I once saw as an example. This was back in 2014 or 2015. The date is important because this was way before the fentanyl crisis had really reached the United States. We were tracking fentanyl then – we knew it was entering the U.S. from clandestine labs in China – but it wasn’t being followed in the media the way it is today. If you weren’t directly involved in law enforcement, you weren’t aware of it. But there was a SAR filed by an AML professional at a bank, and it was fascinating. Because this AML professional clearly knew what law enforcement knew. They’d been reading up on trends, deep-reading the news, and looking at open-source intelligence information. They saw that there was an unusual pattern of money transmittals to a Chinese chemical company. At a time when nobody was looking at that! But they knew! They’d established the pattern, and having done that, they did a great analysis in the SAR. It was ten or twelve pages – nothing bogged down and very succinct. They highlighted the key transactions and identified the players involved. It gave us a roadmap at exactly a time when we were looking for it. 

Hummingbird:
Was there an outcome associated with that SAR?

MG:
That SAR initiated an investigation that we subsequently labeled “Operation Fentanyl High Rise” that resulted in the arrest of thirteen defendants in federal court. Additionally, [this investigation resulted in] the interception of dozens and dozens of parcels of fentanyl being shipped to the midwestern United States. And that saved thousands of lives, at the very least.

Hummingbird: 
Amazing.‍

"Those who profit from making people miserable should be held accountable. It’s what a civilized society does. I don’t care whether you’re in the private sector in compliance, in the public sector with law enforcement, or where you’re at – there’s a common draw. It’s a draw to humanity, to human dignity, and it’s something we all want to see preserved. And that’s why it’s so important that we work together."

MG: 
But what’s critical – and what I can’t stress enough, and something I think is underestimated in compliance – is this. Doing your due diligence, your “Know Your Customer (KYC)” work, that’s all good. But if you’re not aware of current crime trends and where the risks are in the world, you’re not going to be able to focus in on the things that are truly important and relevant to law enforcement. It was clear to me that this analyst was on their game, because the quality of the SAR was phenomenal. And there would have been no reason for someone who didn’t have some knowledge about what was going on in the world at the time [ed. Mark is referring to the analyst’s knowledge of fentanyl] to file that SAR. Without that, there would have been no cause to be suspicious. 

Hummingbird:
That really speaks to one of the things we at Hummingbird are all too aware of, which is that it’s a mistake to think that compliance work is procedural – checking boxes and filling out forms. It’s a real specialization and professional skill set. For those looking to begin a career in financial crime investigation, could you tell us the qualities that, in your opinion, make for a good AML investigator or compliance professional? 

MG:
To me, they’re very similar to what you’d find in an investigative reporter, in a crime analyst, in an intelligence position with national security [firms], or with criminal intelligence at any local or federal agency. It’s someone who’s inquisitive, who’s curious, who wants to peel back the layers. Those are the qualities that stand out. But also someone who can effectively and succinctly compile information. Because it’s so easy to go down rabbit holes. It’s easy to get distracted, to see other things that are going on and lose focus. So it’s critical – as a skill – to keep that focus. 

Hummingbird:
Are there any other things you wish investigators knew about law enforcement? 

MG:
I really encourage people to have dialogue with law enforcement. There’s this 10-foot brick wall between law enforcement and compliance professionals. Because obviously, you know, they can’t talk to each other about BSA information – filed SARs and FinCEN and the like. But that doesn’t restrict communication. It doesn’t restrict relationships. I really think there is more opportunity for dialogue between compliance and law enforcement. And we’re seeing more direct interaction, particularly within the professional associations, between law enforcement and compliance professionals, which is good. 

Hummingbird: 
When we talk about the opportunity for financial institutions and compliance departments to improve their dialogue and communication, does that open up the possibility of increased collaboration as well?

MG:
Without question. [During my career], I routinely referred criminal investigators to people I knew in banks. When they had questions about [financial] processes and specific activities they were seeing. I had that type of relationship with several bankers locally. And I would simply say, “What are your thoughts on A, B, C, D, and E?” Because I’m not a banker, but I know enough to see that this is unusual. Would you give me your thoughts and just a general sense of it?

Hummingbird:
Right. A non-case specific conversation. But an opportunity to talk generally about a trend or activity you’re seeing. 

MG:
And that’s invaluable! You know, institutions pay billions of dollars a year in consulting fees. This is a free conversation with law enforcement. It’s a free conversation with law enforcement who, in many cases, are already looking to have some type of contact with you! So that’s the thing, on both sides of the fence, it’s a willingness to exchange thoughts in pursuit of the answer. And that’s another thing that draws compliance people to their field – and it’s the same reason why I stayed for three decades with federal law enforcement – there’s human passion there. I always talk about this part of it: these are folks who don’t want to see other people suffer. 

Hummingbird: 
When you came and spoke to us a few months ago, you said, “People who knowingly profit from human suffering and misery should be held accountable. 

MG:
Absolutely. That’s my passion. Because human dignity is really all we have in this world. We want it for our loved ones. We want it for our fellow men and women. It’s the basis of our civilization. And those who profit from making people miserable should be held accountable. It’s what a civilized society does. I don’t care whether you’re in the private sector in compliance, in the public sector with law enforcement, or where you’re at – there’s a common draw. It’s a draw to humanity, to human dignity, and it’s something we all want to see preserved. And that’s why it’s so important that we work together. Because we’re never as powerful individually as we can be as a team. 

Hummingbird:
Mark – thanks for taking the time to talk to us. 

MG:
Absolutely.