Homeland Security Department Fact Sheet on Financial Initiatives

 

Tuesday  July 8, 2003
(New, expanded programs to safeguard U.S. financial infrastructure)
(1770)

The U.S. Department of Homeland Security has announced new initiatives
and the expansion of existing programs aimed at protecting U.S.
financial systems against money laundering and other financial crimes.
Following is the department's July 8 fact sheet providing details of
those programs:

(Note: In the fact sheet "billion" equals 1,000 million.)

(begin fact sheet)

U.S. DEPARTMENT OF HOMELAND SECURITY
Office of the Press Secretary
July 2003

Fact Sheet

Financial Investigations and Financial Infrastructure Protection

The Department of Homeland Security plays a critical role in the
government's efforts to investigate financial crimes and to help the
financial community identify and eliminate potential weaknesses in our
nation's financial infrastructure. DHS is drawing on the expertise of
the Bureau of Immigration and Customs Enforcement (ICE) -- a part of
the Border and Transportation Security Directorate -- and the U.S.
Secret Service -- to expand their existing capabilities in an effort
to better protect America's financial service systems from illegal
money laundering, insurance schemes, identity theft, bulk cash
smuggling, counterfeiting, credit card fraud and similar financial
crimes.

Initiatives:

Expanding Electronic Crimes Task Forces from 9 to 13:

Under the USA Patriot Act of 2001, the U.S. Secret Service was
authorized to establish a nationwide network of electronic crimes task
forces, drawing on its successful New York task force. Thus far, the
Secret Service has established nine task forces in New York, Los
Angeles, Miami, Charlotte, San Francisco, Las Vegas, Boston, Chicago,
and Washington, D.C. Four additional electronic crimes task forces are
being established in Cleveland, Houston, Dallas and Columbia, South
Carolina

The Thirteen Electronic Crimes Task Forces will:

-- Focus primarily on computer-based crimes involving the theft of
funds, credit information, identities, and network intrusions.

-- Investigate identity crimes, telecommunications fraud, and computer
intrusion crimes (such as credit card fraud).

-- Identify weaknesses in key systems through which criminals could
steal funds, credit card information or individual identities.

-- Partner with federal, state and local law enforcement agencies, as
well as key segments of the private sector (e.g., the
telecommunications industry) and academic community to understand and
eliminate systemic weaknesses.

Launching Operation Cornerstone, A New Financial Investigations
Program:

The Bureau of Immigration and Customs Enforcement (ICE) is launching
Operation Cornerstone -- a new financial investigations program to
identify vulnerabilities in financial systems through which criminals
launder their illicit proceeds, bring the criminals to justice,
eliminate the vulnerabilities, and develop a working partnership with
industry representatives to share information and close industry-wide
security gaps that could be exploited by money launderers and other
criminal organizations.

Cornerstone will:

-- Identity and assess the means and methods used by criminals to
exploit financial systems in order to transfer, launder and otherwise
mask the true source of criminal proceeds.

-- Work with specific private sector industries to gather new
information and reduce vulnerabilities found within existing financial
systems.

-- Assign a dedicated special agent to each of the 25 ICE field
offices to liaison with the private sector.

-- Investigate and prosecute criminal organizations exploiting
emerging traditional and non-traditional financial systems.

-- Work with financial institution security teams to help them
understand how criminal organizations exploited financial systems in
their industry.

-- Provide the private sector with a quarterly report that details
specific examples of how certain U.S. financial systems are being
exploited by criminal organizations to transfer, launder or mask the
true source of criminal proceeds. The report will provide
recommendations to industry on how to detect and prevent such
exploitation.

Launching the SHARE program:

Under the SHARE (Systematic Homeland Approach to Reducing
Exploitation) program, officials from the Secret Service and ICE will
jointly conduct semi-annual meetings with executive members of the
financial and trade communities impacted by money laundering, identity
theft, and other financial crimes, to share data on specific
investigative outcomes from investigations into money laundering,
identity theft, and other financial crimes. The first meeting under
the SHARE program will take place by mid-October.

Historic Expertise

Protecting Against Computer-based Crime:

-- Since 1984, the Secret Service has been the primary authority for
the investigation of access device fraud, including credit and debit
card fraud.

-- Today, the vast majority of financial transactions are electronic.
Billions of dollars are moved through financial payment systems each
day.

-- Identity crime includes identity theft, credit card fraud, bank
fraud, check fraud, false identification fraud, and passport/visa
fraud (See Appendix A for case examples).

-- Identity crimes are almost always associated with other crimes such
as narcotics and weapons trafficking, organized crime, mail theft and
fraud, money laundering, immigration fraud, and terrorism.

-- Last year the Secret Service arrested 1143 people for violations
involving credit card or access device fraud.

-- In FY 2002, the Secret Service opened 1833 new cases involving
credit card fraud, with a potential dollar loss totaling $565 million.

Protecting Against Money Laundering:

-- Agents from the former U.S. Customs Service have investigated money
laundering and similar financial crimes since the 1970's. This
expertise is now vested in the Department's Border and Transportation
Security Directorate, within ICE.

-- Drug organizations and other criminal groups have used many methods
to launder their illegal proceeds. ICE agents have investigated
thousands of cases that used these various schemes. They are now using
that expertise to not only investigate criminal organizations, but
through the newly announced SHARE program, to also alert financial
institutions about the methods - or typologies - they uncovered.

-- ICE agents have become expert at investigating the complete range
of systems exploited by money launderers and other criminals to
cleanse or mask the source of their illicit proceeds, including
banking systems, money services businesses, bulk cash smuggling
systems, trade-based money laundering systems, illicit insurance
schemes, and illicit charity schemes. (See Appendix A for case
examples.)

-- Billions of dollars in criminal proceeds each year flow through the
nation's financial systems. In one case alone in the mid-1990's, ICE
agents discovered a scheme that funneled more than $1 billion in drug
proceeds from New York to Colombia through wire remitters.

Protecting Against Counterfeiting:

The U.S. Secret Service was founded in 1865 expressly to fight the
counterfeiting that had become rampant during the Civil War -- nearly
one third of all currency was fake. For 138 years, the Secret Service
has worked to protect the integrity of our nation's currency. Today
the Secret Service fights counterfeiting in new ways.

-- New Color of Money -- On May 13, 2003, the new design for the
latest $20 Federal Reserve Note was unveiled. The Secret Service
worked closely with Treasury officials to develop features that make
the bill more difficult to counterfeit. It's the first time that the
U.S. dollar has been printed with colors other than green and black
since the early 1900s, and the first time that offset printing -- for
the background colors -- will appear on U.S. currency (See Graphic).

-- New Features -- The new design also contains improved features to
deter counterfeit notes produced using home computers, office copiers,
and similar technology. These include:

- Watermark -- the faint image similar to the large portrait, which is
part of the paper itself and is visible from both sides when held up
to the light.

- Security thread -- also visible from both sides when held up to the
light, this vertical strip of plastic is embedded in the paper. "USA
TWENTY" and a small flag are visible along the thread.

- Color-shifting ink -- the numeral "20" in the lower-right corner on
the face of the note changes from copper to green when the note is
tilted. The color shift is more dramatic and easier to see on the
new-design notes.

Partnering With the Law Enforcement and the Financial Community

The Department of Homeland Security is launching the SHARE (Systematic
Homeland Approach to Reducing Exploitation) program to provide private
sector executives with progress updates on its financial
investigations and information on new trends and vulnerabilities
discovered during these investigations. The SHARE program is a joint
ICE/Secret Service initiative that provides data on specific
investigative outcomes to executive members of the financial and trade
communities impacted by money laundering, identity theft, and other
financial crimes. The first meeting will be convened by mid-October.

DHS is also conducting joint studies and training programs for members
of the financial and trade communities:

-- As part of the Cornerstone Program, ICE has created a unit solely
dedicated to providing training to the private sector on how to
identify and prevent exploitation by criminal organizations.

-- The Secret Service and the Computer Emergency Response Team
Coordinating Center (CERT/CC) of Carnegie Mellon University have
embarked on an analysis of network, system and database compromises
committed by malicious insiders. The results of the "Insider Threat
Study" will help the partnering agencies develop accurate information
about insider intrusions that can help efforts to identity and prevent
future intrusions before they occur.

Leading Task Forces

El Dorado Task Force:

-- The El Dorado Task Force (EDTF) was started in 1992 as a joint
initiative between the former Customs Service and the Internal Revenue
Service. The mission of the El Dorado Task Force is to dismantle and
disrupt money-laundering and criminal financing organizations
operating in the New York/New Jersey area utilizing the tools and
resources of all participating agencies. The EDTF, the largest
money-laundering task force in the nation, has seized over $557
million dollars and arrested 1,753 individuals since its inception.

-- The EDTF is made up of two components, an operational component and
intelligence component. The operational component is housed in 7
offices and consists of 263 members from 37 agencies. The EDTF
intelligence unit consists of 39 members from 12 agencies with
participating liaisons from 5 agencies.

-- The EDTF is comprised of representatives from the IRS, NYPD, New
York State Police, FBI, Manhattan and Queens District Attorney Office.

Electronic Crimes Task Forces:

-- Since its inception in 1995, the New York Electronic Crimes Task
Force has charged over 800 people with electronic crimes valued at
more than $500 million. The task force has also trained over 13,000
law enforcement personnel and private representatives in the criminal
abuses of technology and how to prevent them.

-- With the passage in October 2001 of the USA PATRIOT Act, a direct
response to the September 11th terrorist attacks, the U.S. Secret
Service was authorized by Congress to expand beyond the New York City
task force, and establish a nationwide network of similar electronic
crimes task forces.

-- The types of investigations handled by the task forces encompass a
wide range of computer-based criminal activity. Examples include
e-commerce frauds, identity crimes, telecommunications fraud, and a
wide variety of computer intrusion crimes that affect a variety of
infrastructures.

(end fact sheet)

(Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)

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