Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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10/19/2009 Suspicious Activity Reports Relating to TARP Programs Described

The quarterly report to Congress filed in July by the Special Inspector General for the Troubled Asset Relief Program said that Treasury should require Public-Private Investment Fund (PPIF) managers to “provide Treasury with the identities of all of the beneficial owners of the private interests in the fund so that Treasury can do appropriate diligence to ensure that investors in the funds are legitimate.” That TARP programs might provide opportunities for fraudsters probably does not come as a surprise, and FinCEN has now issued an Advisory (FIN-2009-A006) stating that when reporting suspicious activity involving TARP programs or TARP-related activities, financial institutions should include “SIGTARP” in the narrative portion of the SAR. FinCEN also advises that under the Suspect/Subject Information Section of the SAR, filers should include all information available about each party suspected engaging in the suspicious activity, including the individual’s name or company name, addresses, phone numbers, and other identifying information. Seven TARP programs allocate substantial funds to a range of financial institutions, and institutions receiving funds from these programs should look out for suspicious activities. The seven programs are: Capital Purchase Program (CPP), Automotive Industry Financing Program (AIFP), Capital Assistance Program (CAP), Unlocking Credit for Small Businesses (USCB), Term Asset-Backed Securities Loan Facility (TALF), Making Home Affordable Program (MHA) and Public Private Investment Program (PPIP or PPIF). The issues raised by the Advisory will be the subject of an article in a forthcoming Monitor.


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