If you have ever wondered about the value of internal controls, then take a look at the case against Eliot Spitzer. As a former prosecuter he is quite familiar with the Office of the Controller of the Currency's requirement that banks submit Suspicious Activity Reports for transactions that look suspicious and are over $5,000 or any transaction over $25,000. It appears that this requirement is what ended up exposing the crime.
He is likely to be charged under a statute called "structuring" where a person initiates a series of financial transactions designed to obscure the purpose of payments.
He was caught in the very net he used to catch others as a prosecuter. The FBI suspected that he was taking bribes and was surprised to discover the prostitution ring.
Processes designed to uncover fraud work even when people who know how they work try to work around them.
Wednesday, March 12, 2008
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