Tag: bank secrecy act

THE EPSTEIN FINANCIAL ARCHIPELAGO

THE BANKERS WHO BOUGHT EPSTEIN’S SILENCE
Named. Shamed. Still Employed.
Jes Staley. Paul Morris. Rosemary Vrablic. Michael O’Neill. Mary Erdoes. Leon Black. Glenn Dubin.
They processed $1.5 billion in suspicious transactions. They overruled compliance officers who flagged the crimes. They bought criminal immunity with your pension money.
Not one has faced arrest.
Full executive names, internal emails, and unredacted documents: Patreon.com/berndpulch

THE EPSTEIN FINANCIAL ARCHIPELAGO: Mapping Wall Street’s Complicity in a Criminal Enterprise

How America’s most powerful banks and hedge funds enabled Jeffrey Epstein’s transnational sex trafficking operationโ€”and why the money trail leads to questions that remain unanswered

๐Ÿ” DEEP DIVE ACCESS: For exclusive documents, extended financial analysis, and insider intelligence on the Epstein network not available in this public report, subscribe to Patreon.com/berndpulch or join the Patron’s Vault waiting list at office@berndpulch.org.

INTRODUCTION: The $1.5 Billion Question

In September 2025, during a House Judiciary Committee hearing, FBI Director Kash Patel made a startling admission: federal investigators had identified $1.5 billion in suspicious financial transactions tied to Jeffrey Epstein’s sex trafficking network, reported by JPMorgan Chase, Deutsche Bank, Bank of America, and Bank of New York Mellon. Yet despite this mountain of financial evidence, the FBI has failed to “follow the money” in any meaningful way.

This revelation came as Congress passed the Epstein Files Transparency Act in November 2025, mandating the release of 6 million pages of documents. To date, 3.5 million pages have been releasedโ€”including financial ledgers, flight manifests, and internal bank communications that paint a damning picture of institutional complicity.

The story that emerges is not merely one of a single predator operating in isolation, but of an entire financial ecosystem that enabled, protected, and profited from criminality on an industrial scale.

THE WALL STREET FIRMS: A ROGUE’S GALLERY

The financial institutions that serviced Epstein’s empire represent a cross-section of American and international banking power. Each played a distinct role in maintaining the infrastructure of Epstein’s operations:

1. JPMORGAN CHASE & CO.

The Primary Enabler (1998โ€“2013)

Epstein’s relationship with America’s largest bank began in 1998 and continued for 15 years, spanning his 2008 conviction for soliciting prostitution from a minor. Internal documents reveal that JPMorgan executives were aware of Epstein’s criminality years before federal prosecutors intervened.

Key revelations from the 2023 Senate Finance Committee investigation:

  • $4.3 million in transactions flagged as suspicious while Epstein was alive and actively trafficking victims
  • $1.3 billion in retroactive suspicious activity reports filed after Epstein’s 2019 deathโ€”nearly 300 times the amount reported during his lifetime
  • 1,200 emails between Epstein and JPMorgan executive Jes Staley, including references to Disney princess code names for women and photos of young women in “seductive poses”

Staley, who later became CEO of Barclays, has admitted under oath to having sexual relations with Epstein’s staff members. He described his relationship with Epstein as “profound” and referred to him as “family” in internal communications. Staley allegedly “observed victims personally,” including visiting young girls at Epstein’s apartments, yet continued to champion the lucrative account internally.

Settlement: $290 million to victims (2023), $75 million to U.S. Virgin Islands (2023)

2. DEUTSCHE BANK

The Post-Conviction Lifeline (2013โ€“2018)

After JPMorgan finally severed ties in 2013โ€”only after internal compliance officers raised alarms that were ignored for yearsโ€”Deutsche Bank eagerly stepped in to service Epstein’s accounts. This occurred after Epstein’s 2008 conviction and registration as a sex offender, at a time when any legitimate financial institution should have recognized the existential risk.

Deutsche Bank maintained the relationship until 2018, processing transactions that included:

  • Payments to Ghislaine Maxwell totaling $30.7 million, including over $7 million for a helicopter used to transport victims to Epstein’s private island
  • Wire transfers to models and “assistants” who were later identified as victims
  • Large cash withdrawals that bank compliance officers flagged but executives approved

Settlement: $75 million to victims (2023), following a $150 million regulatory fine by New York State (2020)

The bank’s official statement: “We acknowledge our error of onboarding Epstein in 2013 and the weaknesses in our processes.”

3. BANK OF AMERICA

The Leon Black Connection

Recent investigations have revealed Bank of America’s central role in processing $170 million in payments from billionaire Leon Black to Epstein between 2012 and 2017โ€”payments now acknowledged to have partially funded Epstein’s sex trafficking operations in the U.S. Virgin Islands.

According to a March 2025 Senate Finance Committee letter:

  • Bank of America filed only two suspicious activity reports covering these transactions, filed years after the fact
  • The bank processed the $170 million “without asking for information as to the nature of the transactions”
  • The SARs were filed seven years after the transactions began and eight months after Epstein’s 2019 arrest on federal sex trafficking charges

Black, co-founder of Apollo Global Management, paid Epstein at an annualized rate of $23โ€“26 million for purported “tax and estate planning advice”โ€”compensation exceeding the median CEO pay for Fortune 500 companies, for services provided by a college dropout with no accounting or legal credentials.

In January 2023, Black paid $62.5 million to settle claims from the U.S. Virgin Islands, with the settlement explicitly stating: “Jeffrey Epstein used the money Black paid him to partially fund his operations in the Virgin Islands.” The settlement granted Black criminal immunity for himself, his attorneys, and his agents.

4. BEAR STEARNS (Defunct)

The Origin Story (1976โ€“1981)

Epstein’s Wall Street career began at Bear Stearns in 1976, where he rose from junior assistant to limited partner before his 1981 departure. The connections formed here would prove enduring:

  • Epstein later chaired Liquid Funding Ltd., a Bermuda-registered entity partially owned by Bear Stearns from 2000โ€“2007, loaded with mortgage-backed securities and collateralized loan obligations
  • The Paradise Papers reveal Epstein utilized Appleby, the offshore services provider, to navigate “the secretive and low-tax world of offshore finance”
  • Bear Stearns’ 2008 collapseโ€”triggered by exposure to the same toxic assets Epstein’s vehicle tradedโ€”eliminated a potential source of institutional memory regarding his early financial activities

5. ADDITIONAL FINANCIAL ENTITIES

Highbridge Capital Management

  • Glenn Dubin’s hedge fund paid Epstein $15 million for introducing the firm to JPMorgan Chase, which acquired a majority stake for $1.3 billion in 2004
  • This single transaction generated $127 million in revenues for Epstein in 2004, his best year on record

Financial Trust Company / Southern Trust Company

  • Epstein’s own Virgin Islands-based financial vehicles, established in 1998 and 2011 respectively
  • Used to pay Maxwell and manage the “economic development program” that saved Epstein $300 million in taxes between 1999โ€“2018
  • One account used to pay Maxwell had previously been flagged for sex trafficking activity

Honeycomb Partners & TD Bank

  • According to Wall Street Journal reporting, these firms maintained ties with Epstein during various phases of his operations

THE CLIENTS: BILLIONAIRES WHO FUELED THE MACHINE

Epstein’s financial network relied on a small circle of ultra-wealthy clients who provided the capital that sustained his criminal enterprise:ClientFirm/RolePayments to EpsteinStatusLeslie Wexner L Brands (Victoria’s Secret, Bath & Body Works) $200+ million (1991โ€“2007) Denied knowledge of crimes; gave Epstein power of attorney Leon Black Apollo Global Management $170 million (2012โ€“2017) Settled for $62.5M; granted criminal immunity in USVI Elizabeth Johnson Johnson & Johnson heiress Undisclosed Deceased 2017 Glenn Dubin Highbridge Capital Management $15 million (introducer fee) No charges filed

THE COMPLIANCE BREAKDOWN: How Banks Failed

The Epstein case represents a catastrophic failure of the Bank Secrecy Act (BSA) framework, which mandates that financial institutions file Suspicious Activity Reports (SARs) within 60 days of detecting potentially criminal transactions.

Key systemic failures identified:

  1. Delayed Reporting: Banks filed SARs years after detecting suspicious activity, if at all
  2. Executive Override: Compliance officers’ concerns were routinely overridden by senior executives attracted to Epstein’s lucrative accounts
  3. Retroactive Compliance: JPMorgan filed SARs covering 300x more transactions after Epstein’s death than during his lifetime
  4. Client Confidentiality Over Public Safety: Banks prioritized relationships with billionaires like Black over their legal obligations to report potential trafficking

As Senator Ron Wyden (D-OR) stated in his March 2025 investigation: “Bank executives tuned out compliance officers who were alarmed by Epstein’s transactions, seemingly withheld evidence of potential money laundering, and coached Epstein on how to obscure suspiciously large cash withdrawals. This goes beyond a total compliance breakdown.”

THE UNANSWERED QUESTIONS

Despite the document releases, critical questions remain:

1. Where is the rest of the money?
The $1.5 billion in flagged transactions represents only what banks voluntarily reported. The true scope of Epstein’s financial network remains unknown.

2. Why no criminal charges against banks?
JPMorgan, Deutsche Bank, and Bank of America have paid hundreds of millions in civil settlements but faced no criminal prosecution for potential money laundering or complicity in sex trafficking.

3. What about the “client list”?
While Attorney General Pam Bondi claimed in February 2025 that a “client list” was “sitting on my desk,” FBI officials have testified under oath that no such comprehensive list was found. The “black books” that do existโ€”contact directories compiled by Ghislaine Maxwellโ€”contain 1,731 names but are described by investigators as “red herrings” rather than evidence of criminal participation.

4. Who else was financed by Black’s $170 million?
The admission that Black’s payments funded Epstein’s Virgin Islands operations raises the question: which other billionaires’ money sustained the network?

5. Why is Treasury Secretary Bessent refusing to release records?
Senator Wyden has identified Secretary Scott Bessent as part of “the Epstein coverup” for refusing to produce Treasury Department files containing thousands of bank records, despite Congressional demands.

๐Ÿ” EXCLUSIVE INTELLIGENCE

This public analysis represents only a fraction of the financial documentation available. For subscribers to Patreon.com/berndpulch, the following deep-dive materials are available:

  • Complete JPMorgan email archive between Epstein and Jes Staley (redacted portions)
  • Deutsche Bank internal compliance memos showing executive override of SAR filings
  • Leon Black payment schedules and correspondence with Epstein regarding “tax planning”
  • Offshore entity structures mapped through Paradise Papers connections
  • Updated victim settlement documents and non-prosecution agreements
  • Congressional hearing transcripts with FBI Director Patel and Treasury officials

Note: Due to recent hack/sabotage attacks targeting our previous Patreon infrastructure, we are also launching Patron’s Vaultโ€”an ultra-secure, independent membership platform directly integrated into berndpulch.org. To join the waiting list for enhanced security features and direct document access, email office@berndpulch.org with subject line “Patron’s Vault Waiting List.”

CONCLUSION: The Architecture of Impunity

The Epstein financial network reveals a disturbing truth about modern capitalism: that the infrastructure of global finance can be hijacked to sustain criminal enterprises, and that institutional safeguards designed to prevent exactly this outcome can be neutralized by the promise of fees from billionaires.

As the House Oversight Committee continues its investigationโ€”and as the Trump administration faces pressure to release remaining documentsโ€”the focus must shift from Epstein as an individual aberration to the systemic conditions that enabled his crimes. The banks that serviced him, the billionaires who paid him, and the regulators who failed to intervene all remain active in the financial system today.

The $1.5 billion is accounted for. The full costโ€”in human suffering and institutional credibilityโ€”remains incalculable.

DOCUMENTATION SOURCES:

  • Senate Finance Committee Democratic Staff Memorandum (November 2025)
  • House Judiciary Committee Letter to Bank of America (October 2025)
  • U.S. Virgin Islands v. JPMorgan Chase & Co. settlement documents
  • Dechert LLP investigation into Leon Black (Apollo Global Management)
  • Paradise Papers / ICIJ offshore finance documents
  • FBI interview summaries and financial ledgers (Data Sets 9โ€“11, Epstein Files Release)

Tags: Epstein files, financial networks, JPMorgan Chase, Deutsche Bank, Bank of America, Leon Black, Apollo Global Management, Jes Staley, money laundering, sex trafficking, Wall Street corruption, Bank Secrecy Act, suspicious activity reports, offshore finance, U.S. Virgin Islands, Ghislaine Maxwell, compliance failure

Bernd Pulch (M.A.) is a forensic expert, founder of Aristotle AI, entrepreneur, political commentator, satirist, and investigative journalist covering lawfare, media control, investment, real estate, and geopolitics. His work examines how legal systems are weaponized, how capital flows shape policy, how artificial intelligence concentrates power, and what democracy loses when courts and markets become battlefields.

Full bio โ†’

Support the investigation โ†’

The International Consortium of Investigative Journalists: OECDโ€™s plan to end bank secrecy

Become a Patron!
True Information is the most valuable resource and we ask you to give back.

By Hamish Boland-Rudder

Despite coming with news that more than โ‚ฌ37 billion worth of hidden wealth has been revealed in transparency drives, the announcement of a new financial information exchange scheme was greeted with skepticism by activist groups this week.

The Organization for Economic Cooperation and Development (OECD) published full details of its global Standard for Automatic Exchange of Financial Account Information in Tax Matters on Monday, which has been under development for months as part of an international drive for more transparency in the banking sector.

The standard provides a framework for governments to obtain detailed account information from their financial institutions and share it annually with other jurisdictions.

It would include sharing information about who owns the account, and the amount of money in the account, to help governments fight tax fraud and evasion.

โ€œ[This] launch moves us closer to a world in which tax cheats have nowhere left to hide,โ€ said OECD Secretary-General Angel Gurria in a statement.

The OECD said more than 65 countries and jurisdictions, including Switzerland, Luxembourg and Singapore, have already publicly committed to implementation of the new standard, with many looking to have structures in place by 2017. But other financial centers, such as Dubai and Panama have indicated they will resist any global push for greater transparency.

And the response so far from transparency activist groups has been mixed at best, as a number questioned the OECDโ€™s commitment to including developing nations in the framework.

While Global Financial Integrityโ€™s Heather Lowe welcomed the plan as a โ€œsuccessful and important step forwardโ€ she said the โ€œreal test will be whether the standards create a functioning and effective system โ€ฆ and whether that system is truly global, with low income countries permitted and willing to participate.โ€

The Tax Justice Network went a step further in their criticism of the OECDโ€™s standard, and accused the organization of missing a โ€œgolden opportunity to make a real dent in the fight against corruption and tax evasion.โ€

โ€œYet again, the OECD has flunked an opportunity to rid the world of the curse of tax havenry,โ€ said Tax Justice Networkโ€™s Markus Meinzer in a statement.

One of their primary criticisms is that developing countries will be forced to collect and provide information โ€“ a process that can be prohibitively costly and difficult โ€“ in order to take part in the scheme.

Tax havens, on the other hand, will have to provide information but can elect not to receive any in return.

โ€œThis does not reflect well on an organization whose membership includes so many of the world-leading tax havens,โ€ Meinzer said.

The Financial Transparency Coalition was scathing in its analysis, attacking not only a perceived disregard of developing countries, but also the very publication and cost of the OECDโ€™s report itself.

โ€œAccessing the document is a perfect illustration of why this process needs to include low income countries from the start; it costs $73 to download the documentโ€”not an insignificant sum for a cash-strapped government, and a prohibitive amount for a citizen watchdog group,โ€ said Porter McConnell, Manager of the Financial Transparency Coalition.

โ€œItโ€™s hardly a convincing sign that the automatic exchange standard is โ€˜ready for implementationโ€™ or open to everyone.โ€

British aid organization Christian Aid was similarly unimpressed, and said the standard as it currently reads not only opened a number of loopholes for tax havens to exploit (including unequal standards for how information is shared), but also neglected to include mechanisms that would make the process easier to implement in developing nations.

โ€œSince the move to automatic information exchange began we have heard rumors that some offshore centers are focusing their attentions on developing countries, knowing that they will be/can be excluded from such developments, and so provide a source of continued business profiting from tax evasion,โ€ said Christian Aidโ€™s economic adviser Joseph Stead.

As part of the publication of the standard, OECD released analysis which found more than 500,000 taxpayers from around the world have voluntarily disclosed hidden income and wealth to their relevant national tax authority since 2009, often taking advantage of reduced penalties to taxpayers who admitted having overseas accounts. The OECD said voluntary disclosure schemes have helped countries identify more than โ‚ฌ37 billion in assets hidden overseas.

The information exchange standard has been released with a call for public comment to be submitted to the OECD by September 12. The standard will then be presented to the G20 Finance Ministers meeting in Australia in late September ahead of the full G20 Summit in November.

Subscribe to The ICIJ Global Muckraker by email or get the RSS feed

Despite coming with news that more than โ‚ฌ37 billion worth of hidden wealth has been revealed in transparency drives, the announcement of a new financial information exchange scheme was greeted with skepticism by activist groups this week.

The Organization for Economic Cooperation and Development (OECD) published full details of its global Standard for Automatic Exchange of Financial Account Information in Tax Matters on Monday, which has been under development for months as part of an international drive for more transparency in the banking sector.

The standard provides a framework for governments to obtain detailed account information from their financial institutions and share it annually with other jurisdictions.

It would include sharing information about who owns the account, and the amount of money in the account, to help governments fight tax fraud and evasion.

โ€œ[This] launch moves us closer to a world in which tax cheats have nowhere left to hide,โ€ said OECD Secretary-General Angel Gurria in a statement.

The OECD said more than 65 countries and jurisdictions, including Switzerland, Luxembourg and Singapore, have already publicly committed to implementation of the new standard, with many looking to have structures in place by 2017. But other financial centers, such as Dubai and Panama have indicated they will resist any global push for greater transparency.

And the response so far from transparency activist groups has been mixed at best, as a number questioned the OECDโ€™s commitment to including developing nations in the framework.

While Global Financial Integrityโ€™s Heather Lowe welcomed the plan as a โ€œsuccessful and important step forwardโ€ she said the โ€œreal test will be whether the standards create a functioning and effective system โ€ฆ and whether that system is truly global, with low income countries permitted and willing to participate.โ€

The Tax Justice Network went a step further in their criticism of the OECDโ€™s standard, and accused the organization of missing a โ€œgolden opportunity to make a real dent in the fight against corruption and tax evasion.โ€

โ€œYet again, the OECD has flunked an opportunity to rid the world of the curse of tax havenry,โ€ said Tax Justice Networkโ€™s Markus Meinzer in a statement.

One of their primary criticisms is that developing countries will be forced to collect and provide information โ€“ a process that can be prohibitively costly and difficult โ€“ in order to take part in the scheme.

Tax havens, on the other hand, will have to provide information but can elect not to receive any in return.

โ€œThis does not reflect well on an organization whose membership includes so many of the world-leading tax havens,โ€ Meinzer said.

The Financial Transparency Coalition was scathing in its analysis, attacking not only a perceived disregard of developing countries, but also the very publication and cost of the OECDโ€™s report itself.

โ€œAccessing the document is a perfect illustration of why this process needs to include low income countries from the start; it costs $73 to download the documentโ€”not an insignificant sum for a cash-strapped government, and a prohibitive amount for a citizen watchdog group,โ€ said Porter McConnell, Manager of the Financial Transparency Coalition.

โ€œItโ€™s hardly a convincing sign that the automatic exchange standard is โ€˜ready for implementationโ€™ or open to everyone.โ€

British aid organization Christian Aid was similarly unimpressed, and said the standard as it currently reads not only opened a number of loopholes for tax havens to exploit (including unequal standards for how information is shared), but also neglected to include mechanisms that would make the process easier to implement in developing nations.

โ€œSince the move to automatic information exchange began we have heard rumors that some offshore centers are focusing their attentions on developing countries, knowing that they will be/can be excluded from such developments, and so provide a source of continued business profiting from tax evasion,โ€ said Christian Aidโ€™s economic adviser Joseph Stead.

As part of the publication of the standard, OECD released analysis which found more than 500,000 taxpayers from around the world have voluntarily disclosed hidden income and wealth to their relevant national tax authority since 2009, often taking advantage of reduced penalties to taxpayers who admitted having overseas accounts. The OECD said voluntary disclosure schemes have helped countries identify more than โ‚ฌ37 billion in assets hidden overseas.

The information exchange standard has been released with a call for public comment to be submitted to the OECD by September 12. The standard will then be presented to the G20 Finance Ministers meeting in Australia in late September ahead of the full G20 Summit in November.

Subscribe to The ICIJ Global Muckraker by email or get the RSS feed

TOP-SECRET – Electronic Filing of Bank Secrecy Act Reports

[Federal Register Volume 76, Number 180 (Friday, September 16, 2011)]
[Notices]
[Pages 57799-57801]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23841]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

Agency Information Collection Activities; Proposal That
Electronic Filing of Bank Secrecy Act (BSA) Reports Be Required;
Comment Request

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Notice and request for comments.

-----------------------------------------------------------------------

SUMMARY: FinCEN is proposing to require electronic filing of certain
Bank Secrecy Act (BSA) reports not later than June 30, 2012. This
requirement will significantly enhance the quality of our electronic
data, improve our analytic capabilities in supporting law enforcement
requirements and result in significant reduction in real costs to the
United States Government and ultimately to U.S. taxpayers.
Specifically, we propose mandatory electronic submission of all BSA
reports excluding the Report of International Transportation of
Currency or Monetary Instruments (CMIR).\1\
---------------------------------------------------------------------------

    \1\ All CMIRs are filed with the Department of Homeland
Security's Customs and Border Protection (CBP) at the port of entry/
exit or mailed to the Commissioner of Customs in Washington, DC.
There are no electronic filing capabilities at the ports. A CBP
contractor keys the data on the completed form into a data tape that
is electronically uploaded to the BSA database. FinCEN receives no
paper filed CMIRs.

---------------------------------------------------------------------------
DATES: Comments should be submitted on or before November 15, 2011.

ADDRESSES: Written comments should be submitted to: Regulatory Policy
and Programs Division, Financial Crimes Enforcement Network, Department
of the Treasury, P.O. Box 39, Vienna, Virginia 22183, Attention: PRA
Comments--BSA Required Electronic Filing. BSA Required Electronic
Filing comments also may be submitted by electronic mail to the
following Internet address: regcomments@fincen.gov, with the caption,
``Attention: BSA Required Electronic Filing,'' in the body of the text.
    Inspection of comments. Comments may be inspected, between 10 a.m.
and 4 p.m., in the FinCEN reading room in Vienna, VA. Persons wishing
to inspect the comments submitted must request an appointment with the
Disclosure Officer by telephoning (703) 905-5034 (not a toll free
call).

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Helpline at 800-
949-2732, select option 7.

SUPPLEMENTARY INFORMATION:
    Title: Bank Secrecy Act, Reporting Forms, (31 CFR chapter X).
    Abstract: The statute generally referred to as the ``Bank Secrecy
Act,'' Titles I and II of Public Law 91-508, as amended, codified at 12
U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5332, authorizes
the Secretary of the Treasury (Secretary), inter alia, to require
financial institutions to file reports that are determined to have a
high degree of usefulness in criminal, tax, and regulatory matters, or
in the conduct of intelligence or counter-intelligence activities to
protect against international terrorism, and to implement counter-money
laundering programs and compliance procedures.\2\ Regulations
implementing Title II of the BSA appear at 31 CFR Chapter X. The
authority of the Secretary to administer the BSA has been delegated to
the Director of FinCEN.
---------------------------------------------------------------------------

    \2\ Language expanding the scope of the BSA to intelligence or
counter-intelligence activities to protect against international
terrorism was added by Section 358 of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the USA PATRIOT Act), Public Law
107-56.
---------------------------------------------------------------------------

    The Secretary was granted authority with the enactment of Title 31
U.S.C., to require financial institutions and other persons to file
various BSA reports. The information collected on the reports is
required to be provided pursuant to Title 31 U.S.C., as implemented by
FinCEN regulations found throughout 31 CFR chapter X. The information
collected pursuant to this authority is made available to appropriate
agencies and organizations as disclosed in FinCEN's Privacy Act System
of Records Notice.\3\
---------------------------------------------------------------------------

    \3\ Treasury Department bureaus such as FinCEN renew their
System of Records Notices every three years unless there is cause to
amend them more frequently. FinCEN's System of Records Notice was
most recently published at 73 FR 42405, 42407-9 (July 21, 2008).
---------------------------------------------------------------------------

    Current Action: In support of Treasury's paperless initiative and
efforts to make the government operations more efficient, FinCEN has
chosen to mandate electronic filing of certain BSA reports effective
June 30, 2012.
    This requirement will significantly enhance the quality of our
electronic data, improve our analytic capabilities in supporting law
enforcement requirements, and result in a significant reduction in real
costs to the U.S. government and ultimately to U.S. taxpayers.
Specifically, we propose to make mandatory the electronic submission of
all BSA reports excluding the CMIR.\4\
---------------------------------------------------------------------------

    \4\ See supra note 1.
---------------------------------------------------------------------------

    Background: Since October 2002, FinCEN has provided financial
institutions with the capability of electronically filing BSA reports
through its system called BSA E-Filing. Effective August 2011, the
system was expanded to support individuals filing the Report of Foreign
Bank and Financial Accounts (FBAR) report. BSA E-Filing is a secure,
Web-based electronic filing system. It is a flexible solution for
financial institutions or individuals, whether they file one BSA report
or thousands. BSA E-Filing is an accessible service that filers can
access by using their existing internet connections regardless of
connection speed. In addition, it is designed to minimize filing errors
and provide enhanced feedback to filing institutions or individuals,
thereby providing a significant improvement in data quality.
    BSA E-Filing, which is provided free of charge, features
streamlined BSA information submission; faster routing of information
to law enforcement; greater data security and privacy compared with
paper forms; long-term

[[Page 57800]]

cost savings to institutions, individuals, and the government; and
insures compatibility with future versions of BSA reports.
    In addition, BSA E-Filing offers the following features not
available on paper:
     Electronic notification of submissions, receipt of
submission, and errors, warnings, and alerts;
     Batch validation;
     Acknowledgement that a currency transaction report (CTR)
and or suspicious activity report (SAR) was filed;
     Feedback reports to filers;
     Faster receipt for money services businesses of
registration acknowledgement letter;
     Ability to send and receive secure messages;
     Use of Adobe forms that allows users to create templates,
reducing data entry but still providing for printing paper copies if
the filer wants to use a paper copy for its internal review and
approval processes;
     Ability for supervisory users to assign system roles to
their staff; and
     Availability of helpful training materials.
    In 2010, we initiated a complete redesign and rebuilding of a new
system-of-record that significantly enhances FinCEN's current technical
capabilities to receive, process, share, and store BSA data. A
significant part of this upgrade was the implementation of state-of-
the-art electronic reporting or information collection tools. As of
July 1, 2011, over 84% of BSA reports are filed electronically with
FinCEN.\5\ FinCEN annually measures customer satisfaction with BSA E-
Filing and has a performance goal of at least 90% satisfaction; in
Fiscal Year 2010, 96% of customers were satisfied with BSA E-Filing.\6\
To enroll with BSA E-Filing financial institutions or individuals go to
http://bsaefiling.fincen.treas.gov/main.html and follow four easy
steps.
---------------------------------------------------------------------------

    \5\ As of July 2011, there are over 12,000 registered e-filers.
Of the 1250 major filers, 659 are currently e-filing. FinCEN
anticipates that many current paper filers will convert to e-file
when the new BSA E-Filing system becomes available.
    \6\ See FinCEN's 2010 Annual Report, available at
http://www.fincen.gov/news_room/rp/files/annual_report_fy2010.pdf.
---------------------------------------------------------------------------

    As a result of the 2010 initiative, FinCEN is in the process of
fielding a new BSA Collection, Processing, and Analytic system. The new
system, which includes significant e-filing improvements, is designed
to support the most efficient state-of-the-art electronic filing. The
database will accept XML-based dynamic reports as well as certain other
file formats. The various file formats \7\ will be provided to permit
integration into in-house systems or for use by service providers.
---------------------------------------------------------------------------

    \7\ The XML Schema, ACSII, and the electronic file
specifications will be provided at no cost to filers.
---------------------------------------------------------------------------

    All filings (batch, computer-to-computer, and discrete) will be
initiated through the BSA E-Filing system \8\ using current
registration and log-in procedures. Although batch and computer-to-
computer filing processes will remain unchanged, the file format will
change to match the database. Batch and computer-to-computer filers
will file reports, which are based on an electronic file specification
that will be provided free of charge. Discrete filings (the replacement
for submitting a single paper report) will be based on Adobe LiveCycle
Designer ES dynamic forms. The discrete function is available for all
small business report filers (as well as individuals). The discrete
filing function will be accessed by logging into the BSA E-Filing
System and entering a pre-approved user ID and password. During log-in
to the discrete filing option, filers will be prompted through a series
of questions.\9\
---------------------------------------------------------------------------

    \8\ BSA E-Filing is a free Web-based service provided by FinCEN.
More information on the filing methods may be accessed at
http://bsaefiling.fincen.treas.gov/main.html.
    \9\ A series of predetermined questions designed to establish
the type of institution and filing in much the same manner as used
in widely accepted income tax filing software.
---------------------------------------------------------------------------

    After log-in, a financial institution filing a report through the
discrete function will answer another set of questions that will
establish a subset of the data fields appropriate to the filer's
specific type of filing institution.
    Today's proposal requiring filers to submit certain BSA reports
electronically using the free FinCEN BSA E-Filing system will provide a
range of benefits. Electronic filing will also facilitate the rapid
dissemination of financial and suspicious activity information in
connection with BSA filings, making information contained in these
filings more readily available to--and more easily searchable by--law
enforcement, the financial regulatory community, and other users of BSA
data. Additionally, the proposal to require certain BSA reports to be
filed electronically will result in a significant reduction in the use
of paper, producing a positive environmental impact. Further, the
implementation of the proposal has the potential to save the government
a few million dollars per year through the reduction of expenditures
associated with current paper processing, in particular the physical
intake and sorting of incoming reports, and the electronic keying of
reported information into the database.
    Security: Mandatory electronic filing will provide increased
security not available with paper filings. At the present time, all
paper reports are mailed to the IRS Enterprise Computing Center--
Detroit (ECC-D) as unclassified mail with no special handling via the
U.S. Postal Service system. On occasion, mailed paper reports have been
delayed, and in some cases damaged beyond readability. A financial
institution may not discover that a report was not received by ECC-D
until many months after the report was due.\10\ For example, problems
with delivery of reports may not be discovered until the financial
institution is examined by its regulator, and the regulator compares a
list of the reports that are posted to the database against the
institution's official files. The BSA E-Filing System is a secure 128-
bit single socket layer protected Web-based filing system. Reports
received are acknowledged and any noted errors are reported back to the
filer. This process provides the filer with a record that the required
filing was received, as well as suggestions on how to improve the
accuracy of their future reports. Reports originated by the filer are
posted securely directly to the database, thereby significantly
reducing or eliminating possibility of data compromise.
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    \10\ The missing report becomes more critical if it was
reporting suspicious activity--especially when relating to terrorist
financing.
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Filer Impact Assessment

    a. Depository institutions: Based on information available we
believe this change in filing procedures will have minimal impact on
depository institutions. All depository institutions are currently
required to file quarterly call or thrift financial reports with their
regulator electronically through a Web-based portal provided by the
appropriate federal regulator. This same electronic connectivity may be
used to file BSA reports with FinCEN by logging in to the BSA E-Filing
System Web-based portal.
    b. Broker-Dealers, Future-Commission Merchants (FCMs), Introducing
Brokers in Commodities (IB-Cs), and Mutual Funds: \11\ Based on
information available we believe this change in filing procedures will
have minimal impact on these filing institutions. This group is highly
automated and enjoys robust electronic buying and selling systems with
sophisticated processing

[[Page 57801]]

and reporting systems.\12\ Currently the Securities and Exchange
Commission (SEC) mandates electronic filing,\13\ as does the Commodity
Futures Trading Commission (CFTC).\14\
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    \11\ FinCEN is considering adding a SAR reporting requirement to
Investment Adviser's (IA's) registered with the SEC. Mandatory e-
filing will have minimum impact on this group.
    \12\ Currently both the SEC and the CFTC require electronic
reporting, The SEC through the EDGAR system and the CFTC through the
NFC Windjammer and Easy File systems.
    \13\ See http://www.sec.gov/info/edgar/regoverview.htm.
    \14\ For financial institutions subject to CFTC oversight See
NFA Electronic Filings at
http://www.nfa.futures.org/NFA-electronic-filings/index.HTML.
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    c. Insurance companies: Based on information available we believe
this change in filing procedures will have minimal impact on these
institutions. This group is highly automated.\15\
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    \15\ See the National Insurance Producer Registry (NIPR) at
http://www.nipr.com/. NIPR is a unique public-private partnership
that supports the work of the states and the National Association of
Insurance Commissioners (NAIC) in making the producer-licensing
process more cost-effective, streamlined and uniform for the benefit
of regulators, the insurance industry and the consumers they protect
and serve.
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    d. Casinos and Card Clubs: \16\ Based on information available we
believe this change in filing procedures will have minimal impact on
these institutions.
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    \16\ Casinos and Card Clubs with gross annual gaming revenues in
excess of $1 million (see 31 CFR1010.100 (t)(5)(ii) and (6)(ii)).
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    e. Money Services Businesses (MSBs): Information gained from a
review of the MSB filings of the currency transaction report (CTR),
SAR, and Registration of Money Services Business (RMSB) forms indicates
that some impact to this group can be expected. Information in trade
journals and other publications, along with informal comments from the
Internal Revenue Service Small Business/Self Employed, indicate that
most filers have Internet connectivity. MSBs routinely accept and
process credit card transactions requiring automated communications
with the approving card center. They also routinely place orders for
goods and services through the Internet and electronically access bill
paying services. Additionally, basic Internet access can be obtained
through a simple inexpensive dial-up connection or at professional
external Internet facilities such as service providers for those MSBs
without Internet connectivity. Lastly, FinCEN has included provisions
for requesting a hardship exception in this notice in case unforeseen
situations arise.\17\
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    \17\ See Filer impact paragraph ``g.''
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    f. Service Providers: There is a network of third-party service
providers with which financial institutions may contract to provide
electronic filing services to the BSA E-Filing System. FinCEN believes
this group to be highly automated and many are already using the BSA E-
Filing System. We do not anticipate that this proposal will have an
impact on this group.
    g. Small businesses: \18\ In support of small businesses, FinCEN's
Office of Compliance will provide a temporary hardship exemption
capability. A small business may request, and may be granted, an
emergency extension of up to one year if it can document a sufficiently
serious problem that prevents compliance with the new filing
requirements. The approved extension will be effective for one year
from the effective date of this notice.\19\ A hardship request based
solely on a lack of Internet connectivity or a business decision to
restrict Internet connectivity will not be considered adequate
justification for an extension.
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    \18\ See the Small Business Administration's (SBA) Web site
http://www.sba.gov/content/what-sbas-definition-small-business-concern
for SBA's definition of a small business concern.
    \19\ Request for emergency extension will be mailed to:
Department of the Treasury, Financial Crimes Enforcement Network,
Attention RPP-CP, PO Box 39, Vienna, VA 22183 or may be e-mailed to:
regcomments@fincen.gov.
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    h. Individual filers: Effective August 2011, FinCEN expanded its
support of electronic filing to individuals.\20\ The capability to file
the Report of Foreign Bank and Financial Accounts (FBAR Form TD F 90-
22.1) became available and individuals worldwide can sign up to file
their individual FBAR's by accessing the FinCEN E-Filing Web site.
Based on new applications to date, there is no indication of any issues
with individuals using this new capability.
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    \20\ See page 3 Background.
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Paperwork Reduction Act (PRA)

    Type of Review: Review of a new proposal to mandate the electronic
filing of BSA reports.
    Affected Public: Businesses or other for-profit and non-profit
institutions.
    Frequency: As required.
    Estimated Burden: Effective with the FinCEN IT Modernization, BSA
reporting will be supported by seven BSA reports.\21\ The burden for
electronic filing and recordkeeping of each BSA report is reflected in
the OMB approved burden \22\ for each of these reports. The non-
reporting recordkeeping burden is reflected separately.\23\
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    \21\ BSA-SAR, BSA-CTR, Designation Of Exempt Person, CMIR, RMSB,
Foreign Bank Account Report, and the Report of Cash Over $10,000
Received in a Trade or Business (Form 8300).
    \22\ See OMB Control Numbers 1506-0065, 1506-0064, 1506-0009,
1506-0013, 1506-0014, 1506-0018.
    \23\ See OMB Control Numbers 1506-0051 through 1506-0059.
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    Estimated number of respondents for all reports = 74,900.\24\
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    \24\ All filers subject to BSA reporting requirements excluding
CMIR. See supra note 1.
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    Estimated Total Annual Responses for all reports = 16,172,770.
    Estimated Total Annual Burden Hours = 20,874,761.\25\
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    \25\ Includes all reporting and recordkeeping burden associated
with filing BSA reports.
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    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid OMB control number. Records required to be
retained pursuant to the BSA must be retained for five years.

Request for Comments

    Comments submitted in response to this notice will be summarized
and/or included in the request for OMB approval. All comments will
become a matter of public record. Comments are invited on: (a) Whether
the collection of information only by electronic means is necessary for
the proper performance of the functions of the agency, including
whether the information shall have practical utility; (b) the accuracy
of the agency's estimate of the burden of the collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; (d) ways to minimize the burden of the
collection of information on respondents (filers), including through
the use of automated collection techniques or other forms of
information technology; (e) the practicality of utilizing external
Internet facilities or service providers to occasionally file BSA
reports, (f) estimates of capital or start-up costs and costs of
operation, maintenance, or purchase of services to provide information
by filers that currently do not have Internet access, and (g) the
enhanced security of sensitive information and significant cost savings
of electronic filing.

    Dated: September 13, 2011.
James H. Freis, Jr.,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2011-23841 Filed 9-15-11; 8:45 am]
BILLING CODE 4810-02-P