Acting Assistant Attorney General Matthew R. Galeotti Delivers Remarks at Association of Certified Anti-Money Laundering Specialists (ACAMS) Conference in Las Vegas

It is great to speak with you today at ACAMS' Assembly.

The Assembly brings together the largest group of anti-financial crime and anti-money laundering professionals to learn about critical issues facing the U.S. and global financial systems. Today, I'd like to share our perspective on the key threats to the United States that are most relevant to you all, and how all of us - at the Department of Justice and in the business community - can work to mitigate these threats.

Our work has led us to identify myriad threats to our nation. Most relevant to the financial services industry, these include cartels and transnational criminal organizations, particularly those operating in Mexico and the Western Hemisphere; Chinese money laundering organizations; and rogue nation-states like North Korea and Iran.

What is the Department doing to counter these threats?

Since February, the Department has taken custody of more than 50 cartel bosses and high-level targets who will, at long last, have to account for their crimes in U.S. courts. Collectively, this constitutes one of the greatest takedowns in law enforcement history. We have brought material support for terrorism and other charges against cartel leaders. And we are holding these criminals to account - as one noteworthy example, the co-founder of the Sinaloa Cartel, Ismael Zambada Garcia, also known as "El Mayo," recently pleaded guilty to charges that carry a mandatory minimum life sentence.

While we will continue our relentless pursuit of cartel members, we have to tackle this threat from all angles. The cartels cannot survive without the networks of financial facilitators that move their illicit proceeds, and we are committed to dismantling these networks too.

For instance, Chinese money laundering organizations, or CMLOs, are critical to cartel profitability. CMLOs facilitate the cartels' repatriation of funds back into Mexico and other Latin American countries and the purchase of precursor chemicals from China. They do so at a low cost using every money laundering technique in the book, including cash pickups, shell accounts, and trade-based money laundering.

This year, my division alone has charged or convicted thirty individuals for laundering money for drug trafficking organizations, including foreign officials, third-party money launderers, and corrupt bankers. Across all of these drug trafficking-related money laundering schemes, we see money laundered through financial institutions that are right here in this room.

We have in particular targeted CMLOs, arresting their members across the United States and overseas. As one example, in May, three members of a prolific CMLO that laundered over $92 million in illicit funds pleaded guilty to money laundering charges. One of the defendants traveled throughout the United States to collect drug trafficking proceeds and deposited those illicit funds, using both real and fake identities, into shell company bank accounts.

Beyond these illicit organizations, we are also holding companies accountable when they enable laundering of illicit narcotics proceeds. Last year, the Criminal Division's Money Laundering and Asset Recovery Section and the District of New Jersey brought the ground-breaking prosecution of TD Bank for facilitating money laundering for drug traffickers. We continue to prosecute individuals for their involvement in this scheme. And this work - prosecuting companies, including financial institutions, and individuals that knowingly facilitate criminal conduct such as narcotics trafficking - remains a core part of our practice.

We are also targeting the money laundering networks that enable other criminals, such as fraudsters, sanctions evaders, and hackers too. A key component of our work is taking the profit out of crime and recovering victims' funds. Earlier this year, with our partners in the U.S. Attorney's Office for the District of Columbia, we filed a forfeiture complaint against over $225 million in cryptocurrency connected to cryptocurrency investment scams that targeted everyday Americans. And we are continuing to target overseas scam centers, and their money laundering networks, that prey on victims.

Sanctions evasion committed by, or on behalf of, our foreign adversaries poses a critical threat to our national security. In June, with our partners in the U.S. Attorney's Office for the District of Columbia and the National Security Division, we filed an action to forfeit over $7.74 million worth of cryptocurrency being laundered on behalf of the North Korean government in connection with North Korean IT worker schemes. Such schemes, in which North Koreans misrepresent their identities to obtain jobs with U.S. companies and other organizations, have been used to fund North Korea's weapons development program.

That brings me to an ever-present threat: Iran. Iran's continued support for terrorism has endangered the United States for far too long. Iran carries out its terror campaign in myriad ways, from terror attacks to developing its nuclear program to human rights abuses. To finance and facilitate these criminal acts, Iran seeks access to the U.S. financial system.

With the partnership of U.S. financial institutions, we have driven Iran out of the traditional financial sector, but Iran and its proxies still seek to exploit the U.S. dollar and abuse our economy, using shadow banking, front companies, layered transactions, and complex financial networks. We are attuned to these developments and are actively working to stop this conduct and hold bad actors accountable.

I am proud that the Criminal Division continues to support these efforts across the Department. Not only by bringing our own prosecutions and seizure actions, but by offering our expertise in support of the Department's priorities.

These threat actors exploit the U.S. financial system for one reason: we have the safest and most dynamic financial system in the world, and criminals are determined to access our financial networks to further their crimes.

Having reviewed the threats and some of what the Department is doing to combat them, let me take a minute to discuss how we view the private sector's role.

So, first and foremost, we want you to work cooperatively with us.

Many of you in this room are the first line of defense. You see the suspicious transactions, you know when red flags are raised. When that happens, I encourage your institutions to contact us. The faster we can move, the faster we can stop the flow of funds and choke off the funding that allows these illicit networks to prosper.

In May, I revised the Criminal Division's Corporate Enforcement Policy to provide a clear path to companies and institutions that timely self-report potential misconduct, cooperate, and remediate. When companies self-report, they will receive the most favorable resolution we can offer. They will have to disgorge illicit proceeds, but companies can avoid charges, avoid a monitor, and avoid additional penalties. Self-reporting also allows us to focus our resources on the individuals that commit crimes, holding them accountable and dismantling the schemes they facilitate.

This is about even-handed justice. It is about putting the right incentive structures in place. We do this to encourage entities to identify wrongdoing, work cooperatively with the government to prevent crime, and ensure that we can hold individuals accountable.

And, if you work at a company that is not interested in cooperating with the government to counter these threats, we still want to hear from you. We have expanded our whistleblower program and are focused on reports relating to our priorities, many of which I covered here today.

Since I announced the expansion of the program in May, we have received credible whistleblower tips across the spectrum of white-collar violations. In those four months, we have received 313 whistleblower tips and found 120 of them to warrant further investigation, including a number of tips relating to our priority areas - procurement fraud, trade fraud, and sanctions evasion. The program is working.

Our hope is that this is another incentive for companies to address the problems identified by their compliance personnel. Make no mistake, though. Where companies do not come forward, do not cooperate, or do not remediate, they will face consequences. White-collar enforcement remains a priority for the Criminal Division, and I have directed our prosecutors to aggressively investigate and prosecute bad actors.

The best case for all Americans is to avoid these issues or address them before they ripen. You all are here to put compliance first and stop threats before they become problems for your institution. You are here to safeguard our economy and the American people. We share those goals and look forward to working with you.

Thank you.

*These remarks were delivered on Tuesday, Sept. 16.