WARNING - Spoilers for Ozark below
It’s finally here - season 4 of the Netflix series of Ozark and people are losing their minds with excitement about it! But I have a confession to make: As someone who has worked in banking for decades with a focus on BSA/AML Compliance - I don’t get it. I don’t understand the excitement over this show. It drives me NUTS. I want so badly to like it but I just can’t and it boils down to this reason: If the BSA/AML Compliance Officer of the bank where Marty Byrde ended up withdrawing millions of dollars in cash in a single transaction had done their job, this show would have been over before it started.
To understand how the BSA/AML Compliance Officer blew it on their biggest responsibility, you first have to understand what led to their failure of duties. The show’s main character, Marty Byrde, is a financial-planner who, along with his business partner, launders money for one of the world’s largest drug cartels. Seemingly unknown to Marty, his business partner was stealing money from the cartel during the money laundering process - often referred to as “skimming off the top”. The cartel leader confronts the business partner, who admits to stealing approximately $8 million dollars and then is subsequently killed by the cartel leader. In an effort to save his life, Marty offers to return the stolen money and commits to laundering another $500 million dollars in five years on behalf of the cartel. Marty is given 48 hours to return the stolen money in return for he and his family’s lives so long as Marty also fulfills his promise of the additional money laundering.
Marty calls his bank telling them he needs all of the money in his account, almost $8 million dollars, in the next 24 hours. Marty arrives at the bank to find two FBI agents who suspect he is in danger. After reassuring them no one has been kidnapped and after he threatens to create a scene that would cause a run at the bank - the bank gives him ALL of the money into a suitcase and Marty walks out of the bank. That’s it - he walks out of the bank. While that whole scene in and of itself really bothers me, what bothers me more is thinking of the ensuing investigation and arrest that should have occurred had the BSA/AML Compliance Officer actually properly executed their responsibilities as defined by the the Bank Secrecy Act (BSA) of 1970 as well as the Anti-Money Laundering Act of 2020.
That may seem ridiculous since this is a fictitious show but it really does make one wonder how often this type of negligence or willful blindness is happening at financial institutions in the United States alone. How does it get to the point where an individual or business can run large sums of money through an account, withdraw large sums of cash, and actually get away with it? Marty Byrde and his partner managed to launder millions of dollars for years through the banking system and have never been caught? Was their money movement really commensurate with their original business front of a financial planner? Doubtful.
Both the BSA and AML Act of 2020 charge financial institutions, specifically BSA/AML Compliance Officers, with the responsibility of ensuring processes are in place for detecting, deterring and reporting suspicious activity. Additionally, examiners are charged with ensuring financial institutions are running reasonably designed programs to achieve those objectives. However, despite those attempted safeguards in place - millions, if not billions of dollars, are laundered through the US financial system each year.
How do BSA/AML Compliance professionals play an effective role in the fight against illicit activity at our institutions? It starts with:
Understanding who you are banking - truly knowing and understanding your customer.
If it is a business, you should understand what is and isn’t normal for an industry participant.
If it is a person, you should understand their occupation and what’s “normal” for their pattern of spending behavior based on their income.
Having effective monitoring in place that can detect anomalies in activity that may indicate illicit activity.
Ensure the monitoring is commensurate with risks presented by your institution’s footprint, types of customers you bank and services you offer.
Ensuring your institution’s AML/BSA efforts are robust, institution-wide, and independent of influences that may derail the true intentions of detecting and reporting suspicious activity.
Consider having an independent party evaluate your institution’s BSA/AML Compliance practices (outside of your required independent audit every year) to ensure processes are robust institution-wide for detecting and deterring suspicious activity.
You never want to be that BSA/AML Compliance Officer - the one who is named in a consent order or the one who is responsible for unwittingly allowing someone to launder money through your institution. Especially when BSA Officers can be held personally liable for this sort of activity. Take a pulse check on your institution’s BSA/AML Compliance program and ensure you aren’t allowing any Marty Byrde’s at your institution.