Volume 58
Issue 0
Fall '20

Lessons from the FinCEN Files: A Call to Reform the Regulation of Money Laundering

Written By: Madison Flowers

Abstract

 BuzzFeed News and the International Consortium of Investigative Journalists recently released thousands of leaked government documents known as the “FinCEN files.” These files contain over 2,100 suspicious activity reports (“SARs”) and other documents, which together illuminate trillions of dollars of potential global money laundering that the U.S. government failed to stop.

Money laundering, or making unlawfully elicited money appear to be from a legitimate source, is widespread. The FinCEN files revealed only about 0.02% of the SARs that were probably filed between 2011 and 2017, but these records alone identify over $2 trillion in potential global money laundering. These files demonstrate how SARs are catastrophically failing to stop global money laundering, a problem that the lack of transparency surrounding SARs only worsens. 

This Comment argues that the government’s antiquated money-laundering protections need to be updated and reformed. By way of background, Part I surveys the federal regulation of money laundering and SARs. Part II then discusses how those regulatory efforts have often failed to effectively prevent money laundering. Finally, Part III suggests ways to reform the SARs system, including by increasing the effectiveness of reporting systems and expanding criminal liability in order to hold banks accountable. 

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