by Brad Parks
Before long, USB was gorging itself on smaller banks, taking advantage of the wild regulatory environment of the early 2000s to get big, then huge. It had amassed more than a trillion dollars in assets by the time the 2008 financial crisis came around. Having reached that critical too-big-to-fail mass, it then saddled up American taxpayers and rode out the mess with its boots unmuddied.
None of which fit on the form. But it would have been understood by anyone on the receiving end of this particular instrument: USB was one of the eight-hundred-pound gorillas of the financial universe. It sat wherever it wanted.
Part II, “Suspect Information,” was where things got more complicated for Mitch.
Because he didn’t know.
Oh, there was always a name scrawled on the CDC deposit slip that corresponded to the transaction in question, along with a signature. But this is where the “suspicious” part of the suspicious activity report began. There were certain USB accounts, all registered to Delaware-based corporations with PO boxes for addresses, that were receiving deposits from hundreds of different people, seldom the same person twice. Mitch was certain the names were fake. That’s why, in part II of the SAR, he reported what he could—whatever alias New Colima Cartel had used this time—but also checked off the box for “Suspect Information Unavailable.”
Part III, “Suspicious Activity Information,” was easier. The date. The dollar amount—which could be fifty or a hundred thousand dollars, sometimes in worn pesos, sometimes in sequential traveler’s checks, sometimes in piles of US cash. Which is why, for Box 35, “Summary characterization of suspicious activity,” he always checked off “a” for “Bank Secrecy Act/Structuring/Money Laundering.”
Part IV, “Contact for Assistance,” was autofilled on Mitch’s computer. Last name Dupree. First name Mitchell. And so on. He lost count of the number of times he rehearsed the conversation he was going to have with the Treasury Department investigator who called to follow up.
That left part V, “Suspicious Activity Information Explanation/Description.”
This was where, in unemotional language, eschewing the adverbs (“boldly,” “brazenly,” “illegally”) that might otherwise tempt him, he would repeat the same narrative: that a person had entered a casa de cambio in Mexico and, without presenting identification, had made a deposit that was then transferred into an account at USB, and that the source of the funds was unknown to USB and might have been the proceeds of criminal activity.
The instructions also asked him to “indicate whether the possible violation is an isolated incident or related to other transactions.”
And, yes, there were others.
Mitch could have done nothing but fill out SARs relating to the Mexican Conundrum. There were thousands of transactions involving the CDCs every day. Some appeared quite legitimate—a few hundred dollars being sent from a USB account in Lafayette, Louisiana, down to a CDC in Saltillo; a few hundred dollars going back the other way, landing in accounts that had been created in Rome, Georgia, or Russellville, Arkansas, or wherever.
It was the larger transactions that drew Mitch’s attention, particularly the ones coming from New Colima territory.
There were days when there were as many as twenty such deposits. Since he had other work to do, he made it his goal to fill out one SAR a day. Once he sorted through the transactions and identified one that stunk, he called down to the CDC in question and had them send him the deposit slip. He then scanned it, attached it to the rest of the SAR, and sent it to the Financial Crimes Enforcement Network, aka FinCEN.
He had been doing this nearly every business day for the entirety of his four years in the Latin American division. And, bizarrely, he had yet to hear from any of the authorities at the Treasury Department, FBI, or DEA, any of whom should have theoretically been interested.
It had made filling out those SARs like sending prayers to God: He believed someone was paying attention, but—from a strictly empirical standpoint—he had no real proof. It was more a matter of faith than fact.
And a matter of protection: The law was clear: The person reporting the suspicious activity was not criminally liable for any disclosure being made. It was CYA, legally sanctified.
The alternative, found in section 5322(b) of the aforementioned subchapter of US Code title 31, was also quite explicit:
“A person willfully violating this subchapter . . . as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period shall be fined not more than $500,000, imprisoned for not more than 10 years, or both.”
That’s why he kept filling out those SARs.
Not even a dream job was worth going to jail for.
* * *
***
Thursday. Eleven A.M. And Goofy was staring at him.
Seriously. Thad’s newest Disney World picture was a framed eight-by-ten of him, his wife, and their three children posed around Walt Disney’s cartoon dog. Thad had hung the photo on the wall next to the chairs that fronted his desk. Anytime Mitch glanced to the side, he became aware he was being gawped at by a seven-foot-tall neoprene mutt.
Thad was on the phone, speaking in rapid Spanish, holding up his index finger to ask for one more minute as he attempted to politely wrap up a phone call he was having with someone in Costa Rica.
Mitch shifted in his seat. He was wearing the same suit he had interviewed in four years earlier. He and Natalie called it his Mean Business suit because, when he had first put it on, Claire—then six—had declared, “Daddy, you look like you mean business.”
It was the perfect suit for this meeting.
Thad finally rushed the Costa Rican off the phone and hung up with an exaggerated eye roll.
“Sorry about that,” he said. “Sometimes with those ticos, it’s like, ‘Yeah, I know you’re all laid-back and chill, but the rest of us have stuff to do.’”
Mitch smiled weakly. He hadn’t come here to discuss national stereotypes.
“Anyhow, what’s up?” Thad asked.
Deep breath. Here goes. “I know you’re not going to want to hear this, but we need to talk about the CDCs.”
Thad immediately put on a fussy face. He knew about Mitch’s SAR campaign. FinCEN had an electronic filing system for SARs. Every institution was given an ID and a password. USB policy was that vice presidents and above had the password. Thad Reiner was the only person in the Latin American division with the ability and authority to submit a SAR.
“What about them?” Thad asked.
“Why haven’t we heard from anyone? I know FinCEN has a backlog, but it’s been four years. Don’t you think we should have gotten a response by now?”
“It’s like I’ve been telling you all along. There’s nothing illegal about what we’re doing.”
“Okay, but if that’s true, don’t you think someone at FinCEN would have reached out to us to tell us that?” Mitch said. “Even if just to say, ‘Hey, you can stop filing those SARs now.’”
Thad’s face got fussier. “The government doesn’t tell you when you’re doing something right. Only when you’re doing something wrong. We’ll probably never hear from them.”
“Still, I would feel a lot better if we double-checked.”
“What do you mean?”
“You once told me you had gotten a regulatory opinion when you started this CDC thing,” Mitch said.
“Yeah.”
“Who was it from?”
“FinCEN.”
“Yeah, but who at FinCEN?”
“I don’t know,” Thad said. “It was a long time ago.”
Mitch felt a small lurch in his stomach.
“You had an interaction with someone at FinCEN and you didn’t document it?” he asked.
“It wasn’t me. It was Roger.”
“By himself?”
Another lurch. About two years ear
lier, Roger had suffered a massive heart attack on the golf course. The only way to communicate with him now was with a Ouija board.
“I think so, yeah. I don’t really remember,” Thad said. “Look, Mitch, I know this CDC thing has always stuck in your craw a little, but you have to see the big picture here. One, even if there is a liability here—and I’m not saying there is—it belongs to the CDCs, not us. Two, I keep telling you, this arrangement we have with the CDCs helps ordinary working people who are trying to straddle a life in two countries. Even if it’s occasionally being used by people who aren’t totally on the up-and-up, it still does a lot more good than harm. And finally . . . Look, you know how much I care about everyone here. I would never do something to jeopardize this family. And you shouldn’t either.”
He let that—and you shouldn’t either—hang out there for a moment.
Like a threat.
Then he finished: “So it’s like I told you four years ago. We’ve got a good thing going here. We’re all making nice money—for ourselves and for USB. As long as we keep it that way, no one up on the thirty-fifth floor is going to mess with us too much. But if this CDC thing goes away and our profits take a dive? Someone on thirty-five is going to decide we need a restructuring. They might even say we don’t need our own dedicated compliance person, that it can be done by the main compliance division. You really want that?”
“Of course not, but—”
“So come on. Let’s not rock the boat here.”
Except Mitch had spent four years not rocking the boat, watching the Mexican Conundrum only get worse. Whether or not anyone rocked it, the boat was taking on water. And someday, if they didn’t start bailing—or hop onto a new boat—it would surely sink.
“I hear you,” Mitch said. “But with all due respect, you’ve got to pull your head out of the sand. I SAR’d fourteen million dollars’ worth of deposits over the past year alone. Every one of them came from a different individual in Mexico and was funneled to an account owned by a corporate shell with a Delaware address—”
“Almost every corporation we deal with has a Delaware address,” Thad interjected. “If our corporate partners have found this to be a convenient vehicle to—”
“And those were just the ones I filed. For every SAR I sent in, there were twenty more I could have filed but didn’t. Were those really from yeoman day laborers trading crumbs with their impoverished families in Mexico? I don’t think so. Not at those dollar amounts. And since when do legitimate corporations use currency exchange houses to move their money between countries? Come on, Thad. There’s a cartel that’s using us as their personal laundromat. You have to see that.”
Thad had crossed his arms across his pudgy stomach. “If you want to keep sending me those SARs, if you feel like that gives you some measure of comfort, by all means go ahead. But don’t be surprised if you keep tossing them down that well and don’t hear the splash.”
“Maybe you’re right. Maybe you’re right. But I would feel a lot better if we could take this to FinCEN and say, ‘Hey, here’s what we’re seeing. We want to make sure you’re aware of it.’ If they say, ‘Yeah, we saw your SARs, don’t worry about it, it’s not on you,’ then great. I’ll drop this once and for all. Think of it like a teeth cleaning. No one wants to go to the dentist, but you feel a lot better afterwards.”
“It’s not about going to the dentist, it’s . . . ,” Thad began, then let his voice trail off. He uncrossed his arms and leaned his elbows on his desk, bringing himself marginally closer to Mitch before he resumed. “My mother had a saying: ‘Don’t borrow trouble.’ That’s what it feels like we’d be doing if we took this to FinCEN again. We’re filing the SARs. That gives us all the legal coverage we need. That’s good enough.”
Mitch looked down at the sharp crease in the pants of his Mean Business suit to summon the nerve for his next question. This is what he had really wanted to ask all along, what this meeting was all about for him. Confronting papa was never easy.
Finally, he brought his head back up.
“Thad, I need to ask you something. And I need an honest answer. This is potentially . . . I mean, this is serious stuff we’re talking about.”
“Okay. Shoot.”
One last deep breath, then Mitch came out with it: “Are you sure you’ve actually been filing those SARs?”
Thad took a beat. Outside this building, they were just two more goateed middle-aged white guys in suits who went to a downtown skyscraper to do jobs no one really understood. They were paid hundreds of thousands of dollars annually. They lived in well-appointed houses in tony Buckhead, drove imported luxury cars, took nice vacations. They had all the status symbols of high upper-middle-class existence that they reasonably cared to acquire. The world viewed them as equals.
But here on the twenty-seventh floor, there was no question about who sat on which side of the desk. And the guy on the wrong side was bringing his toes right up to the line of accusing the guy in charge of lying.
“Of course I have been,” Thad said, his back straightening. “Why wouldn’t I?”
There was a flash of an emotion that, during four years in the Latin American division, Mitch Dupree had never seen from his boss.
Anger.
Mitch put his head back down, unwilling to meet Thad’s suddenly fierce gaze.
“I just . . . I just wanted to make sure, that’s all,” Mitch said, willing himself not to backtrack completely. “Because, you know, if you hadn’t been, we could be held criminally liable for everything happening with those CDCs. I mean, we could . . . we could go to jail for—”
Thad actually laughed.
“Mitch, Mitch. No one is going to jail here,” he said. “Are you okay? What’s really going on here? I’ve never seen you this stressed. Is everything all right with you and Natalie? Is it something with Claire or Charlie?”
“No, no, everyone’s fine,” Mitch said. “I just—”
“Look, why don’t you take the rest of the day and do a little self-care. Get a massage or something. Seriously. Go to that place on Roswell and tell them to put it on my tab. Ask for Aurelia. She’s the best. She’s got magic fingers.”
“I’m fine, I’ll just—”
“It’s not a request, Mitch,” Thad said evenly. “Seriously, get out of here. Take the day. Don’t check your e-mail or anything. Blow off some steam, then come back tomorrow ready to take on the world. Can you do that for me?”
“Uh, yeah, sure, I—”
“And while we’re at it, no more SARs, okay? If FinCEN wants to follow up on what we’ve already filed, great, we’ll take it on. Otherwise, give it a rest. I can’t have you burning yourself out worrying about this. There’s too great a risk you’ll drop the ball on something else, something that really matters. Besides, it’s not healthy to carry around this much stress.”
Mitch studied Thad’s face. There was no malice in his eyes. The flash was gone. This was a sincere peace offering.
“Okay,” Mitch said. “Right.”
“Good man,” Thad said, with a little dip of the head, his small cue that this meeting was now over, the matter at hand settled.
Mitch stood up. As he got out of the chair, he took a glance to the side.
Goofy was still leering at him.
* * *
***
Mitch skipped the massage. He hit the bar instead.
He ordered a bourbon and Coke and sipped it slowly as he watched a muted television. The closed-captioning kept rolling across the bottom of the screen but Mitch couldn’t make sense of the words. His mind was still on Thad Reiner.
What just happened?
He had gone into that meeting filled with conviction, ready to control the agenda. Things had to change.
Then once it started, Thad started spinning things, as expected. And then at some point it became a merry-go-round that
was rotating so fast it was all he could do to hang on.
Where did his resolve go? How had he allowed Thad to make the matter about mental health? And had Mitch really just agreed to drop the whole thing?
He ordered another bourbon and Coke and replayed the meeting in his mind.
Who at FinCEN? he had asked.
I don’t know, came the answer. It was a long time ago.
Since when did Thad not remember something? There were many reasons Thad Reiner made VP by thirty-seven, and one of them was his mastery of the details. He had one of those astonishing brains with near total recall of deals struck five, ten years earlier. He could also push things forward, thinking five, ten steps ahead or five, ten years down the road. He missed nothing.
So to have him plead memory loss about a crucial aspect of the most lucrative deal the Latin American division had ever struck? A deal that was still the single greatest contributor to his division’s bottom line?
Then came this:
You had an interaction with someone at FinCEN and you didn’t document it?
It wasn’t me. It was Roger.
Would Incompetent Roger—or anyone in his position, which was now Mitch’s position—really engage FinCEN one-on-one? Wouldn’t Roger have had his division vice president with him in the room or on the call? And corporate counsel? It was standard practice. Bankers never did anything important alone.
And then, finally:
Are you sure you’ve actually been filing those SARs?
Of course I have been. Why wouldn’t I?
The answer had been immediate, unequivocal. But Mitch had been sending in a SAR a day, every business day, for more than four years now. That was roughly a thousand SARs. Even knowing that FinCEN got a million SARs a year, even knowing there was likely a backlog of cases, a thousand SARs—from one person, about one matter that was so obviously problematic—would have surely provoked some kind of response.
As he reached the dregs of his second drink, Mitch finally allowed himself to confront the truth.