Spotlight on Canada

James Booth Hello, everybody. Welcome to Silent Eight Talks. It's James Booth, Global Head of AML, Counterterrorism and Sanctions at Silent Eight. Here for the next episode. So whether you are a new financial crime professional and you're looking to learn about the topic or you're an AML nerd like I am, this is all about talking about unfiltered some of the challenges that we face as compliance professionals around the world. Please don't forget to subscribe. I'm in downtown Toronto. So, Suzanne, I asked you this a moment ago, but we're in King Edward Hotel in downtown Toronto. Is that right?

Suzanne Creighton We are. We're in the King Edward Hotel, just in the heart of the financial district in downtown Toronto.

James Booth And probably minus about 50 by the feel of the breeze coming in from the outside.

Suzanne Creighton Well, you know, for us, Connects, this is where we're almost at summer.

James Booth So, OK, it's bloody cold is what we say. So I should probably introduce you, Suzanne. So Suzanne Creighton, you're a senior compliance consultant in Connects. You're in Canada and I know that you operate globally, but I'm probably not going to do your introduction any justice. So would you just tell our listeners who you are?

Suzanne Creighton Yeah, thank you. So, you know, I'm a seasoned AML professional. I also do regulatory. I sort of came up from the legal compliance side of the banking world. And I morphed over to the AML side quite a while ago. Yeah. And, you know, I really felt that pull and push. I think just before we started this, you and I talked a little bit about 9-11, which is so long ago. But really, that was always ever present in my mind. And it was really the impetus, I guess, for change. And I've just been working in AML, doing different things, FIU, always the compliance, like second line challenge. And I think that's really my sweet spot. And then, of course, going into consulting and helping people.

James Booth And we met, didn't we, in downtown Toronto at the Saturday AML Leaders Symposium, didn't we? Excellent, yes. And here is your $5 for saying that like a podcast. But we're hoping to do more of those. And if people see us posting those on LinkedIn, we try and bring like-minded professionals together to debate these issues. And then hopefully it spring balls into things like this, where people now on Spotify and Apple, as of this morning, will get to listen to what I hope is our unfiltered but respectable views. Some of the issues, and I think we're going to focus on Canada today, so we spend a bit of time here. Now for those that have subscribed and listened to this podcast, know that I'd like to start off on a bit of a light-hearted note, just to get to know each other a little bit. And this isn't The James Show, by the way, so feel free to fire back. I'll warn you though, I'm quick at responses. So we are going to talk about a couple of things, so the primary focus is going to be AML enforcement in Canada. It's changing from a regulatory perspective. Culture would be a great thing to maybe touch upon. I know that you're quite passionate on OSINT as well, so we'll touch on that, but then the conversation will take us wherever it takes us. I like it. Okay. Do we need to add an explicit listener warning or no?

Suzanne Creighton I won't use any naughty words. Okay, I might, so I'm going to add an explicit. I might. I'm going to try. I'll try.

James Booth Okay, good. So let's lower Susie a little bit. I'm trying to, this is always the bit where how far can you push it? So we'll start with something gentle. What was the last thing you watched on Netflix?

Suzanne Creighton Hmm. You know what?

James Booth You've got to say some juicy financial crime, sure. But you're going to say something like Married at First Sight, aren't you?

Suzanne Creighton No. So I don't like Married at First Sight. I'm like, it's so fake. It would have been something with my sister, who is an infamous, like, flicker through things. I'm just trying to think. Like, she actually -- I get a bit dazzled, because we'll look at 900 things. I'm like, just pick anything.

James Booth It sounds like you're adding a disclaimer for something highly embarrassing that you're going to blame on your host.

Suzanne Creighton I know. It was probably -- like, we probably watched, like, 900 things, but only, like, five minutes of it. So, yeah, maybe, like, a Stranger Things, and then maybe, like, a couple different things, because she literally can't land on something. She's like -- it was a second. She's also on her phone. She's like, "I don't want to watch it." And then we go on to something else. So it was -- it's traumatic for me.

James Booth -Five minutes of 900 things is the next one, too. I've watched the Louis Theroux documentary. Have you seen the new one? -No. How is it? -Well, there's not much I can say on here. -Okay. But you've watched the entire thing? -I've watched the entire thing. And I think it just adds an incredible perspective on the toxic masculinity, which I found incredible. And I love watching stuff that have got a psychological element, because I'm fascinated by how people think and believe, like the ideologies, which obviously links to what we talk about. It's definitely worth a watch. -Okay. I'll watch it on my own. -Louis came out of it on top. I mean, he absolutely, rightly destroyed some of the opinions and behaviors of these people. But I won't spoil it. -Okay. -And it's a very interesting, thorny issue, and I don't want to get canceled on the first day of Apple.

Suzanne Creighton -Yeah. Was there one scene in particular that you were like, "Okay. This is the moment maker here"? -Yeah. -Yeah?

James Booth -Well, yes. -Can you say it or no? -All I will say is it's just toxic masculinity and insecure people, and I think we can read into that.

Suzanne Creighton -Yeah. There's a lot, right? -Yeah.

James Booth -Yeah. -Okay. Next question. -Yeah. -Favorite financial crime-related book. Had one in my bag this morning. I've taken it out, but I'll reveal it in a moment.

Suzanne Creighton -So, you know, I'm going to tell you right now. So I haven't been reading, like, a financial crime book. You know what? I should really say the one that is by Chris Mathers, the guy that I do work for. -Yeah. -You know, I've read his. It's good. -What's it called? -Let me just get this for you, because I have been spending a lot of time reading my own stuff, because I am in school. -Yeah. -I'm studying cybercrime.

James Booth -Education is a big passion of mine as well. We'll talk about that. -Right.

Suzanne Creighton But there's so many things out there. So I will be very frank with you. The things that I've been reading in the last, I'm going to say, two years... -Yeah. -...really are focused on computer and programming. To be quite frank with you, that's my big stuff, because I'm getting ready to write, like, my SANS test and my, you know, stuff. So it's really -- it's hard for just that. So I haven't really been spending a lot of time doing good things, but let me just tell you, because I have read his book, and it's -- -I'm sure he will forgive you for not reading it. -I'm sure he will forgive you for not remembering. -I know. It's so awful. Let me just tell you the name of this book. It is "Crime School: Money Laundering. True Crime Meets the World of Business." And it was very good. Oh, and "Business and Finance." It's good. He's, like, an RCMP guy who actually worked, like, in, you know, like, anti-money laundering, like, the beginning of, like, when, you know, it's all coming about, and he just gives his life story. So it was kind of interesting. He's got a funny sense of humor, and you can really get that from the book. So that was, like, my last book that I read. You tell me what yours is.

James Booth - There's a book, and it only launched, ooh, no more than three or four weeks ago, and it's called "How to Launder Money."

Suzanne Creighton - Oh, is it a how-to?

James Booth - Well, part of it is, actually. But look, it's not really difficult to launder money, is it? It's just really if you can launder enough that the risk is worth the reward. I know that... Many people that have been listening to this have attended a lot of the seminars and workshops I've delivered. And we do a section on... I am the money launderer, I call it. And as a team, I deploy each team and give them a set amount of money and say, "Come up with a policy that you're gonna launder money and present it back." And then we all become enforcement, if you like, or investigators, and we try and undo it. And what's fascinating is how quickly financial crime professionals will adapt to try and evade the controls and they get defensive about it. But this book, I think it's George Cotterell and Lawrence Burke, it's set up in a way that they start off by saying how organized crime groups actually launder the money. But then they'll take those learning outcomes and they'll turn it-- well, they turn it into practical guidance for law enforcement, policymakers, and regulators. Right. It's a bit of a double-edged-- Yeah. It's just come out, and I'm about three-quarters of the way through it at the moment. I have to take the cover off these books when I'm flying because people look at me thinking, what the hell-- That's it. --is James doing? OK. Last question, I think. OK. Oh, no. In fact, I'm going to ask two more. OK. What would be a death row meal? Sorry? Death row meal.

Suzanne Creighton Oh, I'll tell you right now. Pizza. Pizza all day long. Like, good pizza, not crappy pizza. Which topping? I like vegetarian pizza. So just any veg. Yeah. Yeah. That's good. It's nice and simple, straightforward. That's right.

James Booth And that surprises me. Does it? Yeah, you've got opinions and views. And I thought it was going to be some hot honey-glazed pepperoni with stuffed crust on there.

Suzanne Creighton Yeah, just really good veg pizza is my number one. Yeah.

James Booth Yeah. I hope we're not on the same death penalty, Ro.

Suzanne Creighton Which yours?

James Booth Ooh, now you're asking. I like jerk chicken.

Suzanne Creighton Oh, do you? Yeah, that's good, too.

James Booth I like jerk chicken. Yeah. And then at least when they fry me in the electric chair, it'll smell-- You're like-- It'll smell nice.

Suzanne Creighton --mad at me. Exactly.

James Booth OK, last question, I promise. You could have any three guests at a dinner party. Who would they be? And they don't have to be famous. They can be-- Somebody that's close to you or--

Suzanne Creighton Let's see. So certainly, probably it would be this crew. I enjoy speaking. I really do thrive in this industry, so I'm always fascinated. There's a fellow that I chat with. He's a former CIA. He's just interesting, and he writes a lot. He does post. He's super interesting. He always has a post called The Laundromat. His name is Matthew. He would definitely be there. The Laundromat's a book as well, by the way. Yeah, is it? Yeah. I mean, it's a famous concept, right? Like, what do we do? I just really like the way that he writes, and so he's quite-- he's engaging. He just knows things, and he does it in a really informative, kind of fascinating way that's engaging, right? It really draws you into the story.

James Booth We've got a CIA.

Suzanne Creighton Yeah, yeah, CIA. I would definitely have this-- another person who's a closer friend, kind of colleague, former RCMP, Rob, really soulful. Again, same industry, but just tell-- everyone's got their own unique perspective and the things that they're interested in. You know, like, he's very-- kind of forward-focused, but really broad stream. So like-- and also very artistic, right? A great photographer. And then I think I should sort of mix up-- you know, I have a friend, I'm just going to pick people I know, who is like an economist and a scientist. And she's really interesting as well. Her name's Danielle, just super smart, but also has a really different set of-- that comes from a different point of view and is fascinating. So I picked those three people, very, very different in their own ways. I'm sorry I didn't pick you, but-- It's fine.

James Booth It's fine. I was hoping you wouldn't. Anyway, it's fine. I'm busy that day. I'm busy that day, especially for having vegetarian pizza. I'm not interested.

Suzanne Creighton You're like, there is no real pizza, no jerk chicken. Exactly. I'm not coming. So I don't want to be at your damn table anyway. I'm not even in the same restaurant, to be honest, but-- Like, I'm someplace different, and it's better. I want to be on your island.

James Booth I have a-- I'm fascinated by politics. Yeah. And we're not going to pass any-- I just want to declare my will, and we're not going to pass any political allegiances of you on anything. Right. I would love to just get inside Barack Obama's brain.

Suzanne Creighton I'm going to be very upfront with you. I really liked him. I don't-- like, it just seemed there was such a nice calmness. Yeah. I will tell you, I lost my voice at a certain period of time. And he was the person that they used to help me get my voice back. And his intonation and the way that he speaks apparently is the perfect, I guess, way that-- you know, how he breathes and how he uses sentence formation is the perfect way that he structures his voice.

James Booth I wouldn't-- I mean, I would obviously be fascinated in all the things that you can't tell the public and all the secrets, like, where are the UFOs parked, and all this kind of stuff. But I would actually just-- There is everything. Yeah. I keep this unpolitical, and I would just love to learn how he communicates and learn from him first hand on how he would do it. Second, I am in downtown Toronto right now. I'm going to have to say Drake. So I am a big fan.

Suzanne Creighton Drake, yes. You know what, look. I like Drake an awful lot until they post the thing where he's blocking lanes of traffic. And then I'm like, hey, you lost me, Drake. Come on. You know what traffic's like down here. Don't be that guy, Drake.

James Booth Because he's on his way to someone's dinner party. I know, he's boring.

Suzanne Creighton And he's like, we're getting jerk chicken, and we're getting pizza with everything on it. Exactly. He's a vegetarian.

James Booth He drives around presidential, so maybe Barack Obama. And I think the third one would-- this is going to sound so cliche, isn't it? But I'm going to say my partner, because she's so funny. She's the only person that keeps me on my toes. I don't really get nervous. I'm pretty happy to speak. I'm happy to be wrong. But she will remind me I'm wrong quite quickly if I'm wrong. But she's already really, really funny. So I would probably have her. Although she's very good looking, so I worry about Drake and Barack Obama, because they're very handsome people. They're both very handsome, right? - Right. - So maybe I'll have to change that third one, but I'll come back to that one. Right, I think maybe we should talk financial crime, don't you? - Okay, let's do it. - So we had a bit of a discussion this morning about what the big issues were. And I also remember at the symposium, we had a conversation about this enforcement world that we're in at the moment, whether we think it's really making a difference.

Suzanne Creighton - Insert my growl here.

James Booth - Well, it's tricky, isn't it? - It's tricky. - Because how can you really revoke change? The best way you hit an organization, we're not gonna bank bash, so we're not gonna pick on any banks. But we might use case studies just to demonstrate our points. Fines are becoming, maybe they're expiring on the value. So I guess the question is, are boards and executives actually losing sleep over AML and sanctions fines right now? Or is it sort of quietly being managed a few floors below them?

Suzanne Creighton - You know, so here's the thing.

James Booth - Let's have a Canadian flavor to it as well. Let's narrow the conversation to here.

Suzanne Creighton - Yeah, I mean, look, there is no way that the imminent threat of these very large fines has not made its way into the CEO and the CRO suite. There's just absolutely no way. I think that somebody is doing a risk calculation and saying, is it really going to happen to us? And then the next conversation that happens is where the people in charge of AM Alkermann, and they're like, don't worry about it. We've got it covered. I think that that's the disconnect, right? Because the business tells the head of the bank, we've got this, and here's what we're doing to mitigate it. I think that the trust factor -- you have to have trust in your business line until you're proven that they're not telling you the right thing. But when you're -- you know, your business is saying, we've got this, how can a CEO go, no, it's the head of your AML that's saying, yes. If that person proves to be wrong, it's a very big mistake. I think where, personally, where there needs to be the real shift in large financial banks is you need one person in between. You can -- the check and verify, right? If that -- now with the sizable risk, I think there should be an independent person who can say with safety to the board and to the CEO, you know what, I've gone and I've done the review, like almost like the audit overseer of the AML program and compliance and look at it and go, actually it needs this tweaking here or it's sound. But when you have people who are vested in what they have built, I think that they may not see it clearly. And I think that is the primary risk where you're used to doing something as you've always done it. And I don't know that they're as crisp about seeing that risk.

James Booth So, I mean, the board have got so much to oversee in an organization, credential risk, credit risk, regulatory risk, as well as financial crime risk as well. So there's an argument, well, this comes back to the debate of who's accountable and who's responsible, right? So you're going to create some responsibility for a nominated officer, whether in the world, that's an MLRO, MLCO, nominated officer, whatever the law company wants it is. Is the right thing to hand that accountability off to that person?

Suzanne Creighton - So, I mean, I think if you have, you know, I also, because I do this sort of, I sit in an audit position, you know, I'll go in and I'll review. And I think having the ability to test sample and audit programs, and here's what I always see. I go in and everybody says, everything is great. And I will have the heads of corporations say, no need to worry, everything's great. The CEO will be sitting in the same room and they're like, the head of my program says everything's perfect. I'm like, that's great. I'm just here to check and verify. And, you know, we'll look at everything. No need to worry. As I go through it, I'm like, wow, everything is so not great. And, and that.

James Booth - Sorry to interrupt Susan. - Yeah. - So just to be clear, when we say check and verify, we're not talking a quality assurance. We're talking an audit of the entire framework.

Suzanne Creighton - Of the entire program. And that's required under the PCML TFA. And so, you know, the large firms, like let's say the big five banks, they'll tend to go to like the really big audit houses who bring in a lot of people. And, you know, and they're also struggling because there've been some kind of sizable findings with those audit firms, but they wanna keep the business. And so they'll, you know, they'll have their findings, but they present it in a way that is very palatable. And here's my take. I will tell you exactly what's wrong. I'll also help create the way to green. My job is not as a salesperson. I don't see my role as a salesperson. I see my role as telling you exactly what's wrong and then also pointing to the regulations and saying, here's where you're not compliant. I think if you were to do this, this and this, or if you need technology, I will write that down and evidence it for you. But in no way do I believe that I should be bringing in 30 more people to help create a business plan, which I think a lot of the larger firms do and it's people and nothing gets solved. It's hard to hear sometimes. Yes, it's very hard to hear, but that's what saves you from FinTracker OSPI or the OSC coming in and having a real problem with the work that you've got. Because again, when you're in the trenches and you're just working with your clients, a lot of the times, if you're a mid-sized firm, you know your clients, but the regulator doesn't care if you yourself really know them. They want to see on paper that you have evidenced it, if you're a larger entity, they want to see that you're doing everything that the regulations say that you're required to do. And I think most times that's not being done. So if it's KYC, you're doing your KYC refreshes. If there's any change or maybe there's something that doesn't look right, I go right in and I pull transactions, I look at activity. If it's an investment firm, I'm like, give me your pink sheets. I want to see everything. I want to look at trades, I look at all the client files, I look at everything, all of the formation documents. The vast majority is missing, they don't know who the beneficial owners are, they don't have real documents, or a lot of places will create what they call, you know, they'll create a document that they believe is one of the documents required under law, like a formation document. I'm like, this isn't it, you need the ones that are all registered, so we can see who the parties are. And if, you know, you've got an actual trading authorization, but it's actually got to be registered. It's not something that you hand right out and you've created and it's one of the company documents. So I think it's that rigor that you have to sort of get comfortable with. And also honest with yourself and say, you know, we just didn't do it, but that's hard to do. Of course, you know, it's also hard to do when you're like, you know, I have Suzanne who works for me, I trust her. And she's always been kind of a good worker. So why am I going to say that she's not doing her job now? When you have that comfort and familiarity and you're just not enforcing that rigor, that becomes a challenging, overt problem.

James Booth So this is going to link onto a point around enforcement fines themselves, but there has been a significant rise in AMP fines in the last couple of years. Looking at the notes, I think in '21, I know we're talking here about COVID and things, but Fintrack issued apparently eight anti-money laundering penalties. In last year. I've gone up to 30.

Suzanne Creighton Right.

James Booth Also, I remember we spoke about this at the symposium that Fintrack had also lifted the ceiling on the amount of fines as well. So, so we've moved from an environment where Fintrack, a respectable regulator, just to be candid, they moved from a point where they were showing the teeth. Yes. And now they're having a bite. Yes.

Suzanne Creighton It's, it's a pretty good bite, right? Yeah.

James Booth And I think the, again, I just want to speak overseas, but the, the, um, I think the record enforcement fine was issued in 20, in October. And then it was broken again in November. I think 176 million. Yes.

Suzanne Creighton Which nobody, I mean, everybody's going, here's the thing. It's a great precedent to set. It's a precedent that likely will never be paid because I think they're just, they've closed up shop. Yeah. But here's the thing. It was, it was done. And even though we know that they're never going to pay, it was a firm that is just, you know, they were fly by night. They were doing illicit activity. Contracts still issued it. And so I think the message that is loud and clear is we're prepared to issue another one of these fines. Yeah. And if you have this activity, you know, it's there. I think what I would hope to see is where we have these real estate companies, because you, you probably know that we've had real estate firms being hit. Yeah. Money service business as well in the cross. Money service business, right? That was the big sweep that we just had. And you'll see where there's some very illicit activity. I think that, you know, similarly to that very large fine, the activity was horrifying. I think that we need to see higher, you know, fines. I think the one that we just had, the one that was linked to, you know, a sanction party, you know, zero KYC and then human trafficking. I think that fine probably should have been much, much higher. It's in the $100,000 range. Would have been nice to see that at least at the half million mark. One thing that you've said,

James Booth and I must be candid, I'm in a bit of shock. And I'm sure that people listening to this are going to be shocked as well. I mean, I'd like to elaborate where you can. You said that this firm that received the record from track fine are not going to pay it. That's going to be a shock. Can you elaborate? What do you mean?

Suzanne Creighton Yeah, I mean, I think that's just what everybody in the industry is saying, right? Like they have no plans. They've already filed. They immediately filed in the federal court. They're entitled to. Everybody who gets a fine is entitled to. And, you know, the sense is, is that they're just going to close up shop here. And I believe they've already started their closing up shop procedures, where they're just winding down. They'll walk out. Those fines are not enforceable. So you can leave, but what's the remedy? And I think that's it, right? In the United States, it's a criminal penalty. I think that's what we're missing. You must change the nature of what that fine is. This is like a monetary civil penalty. Make that the same as the United States, where you don't pay, well, then you go to prison.

James Booth Yeah, it's a FinCEN approach or an OFAC approach, but really, they don't just have teeth, they take chunks out. That's right.

Suzanne Creighton And so either you're going to give us the money and settle your fine, or you're going to enjoy jail for X amount of time.

James Booth Well, it's the FATF mutual evaluation this year, so can you see that having an impact on this lack of criminal penalty?

Suzanne Creighton You know, I really hope so. So I've heard that they've already come in, but for the preliminary meetings, not a lot of people are talking about what else is happening. So everyone's being very hush-hush about it. It's like our big secret.

James Booth Surprising, because it's the whole day behind a mutual evaluation is collaboration and reporting is publicly issued.

Suzanne Creighton Right. And so one of the things that I heard initially was that everybody had been focused on one thing, and that the preliminary, they thought it was very focused on what are firms doing, and everybody thought that they would be focused more on enforcement. So everybody got prepared for the enforcement piece, and were not focused on what are you doing in terms of...

James Booth That's why A&P fines have gone up, and the regulator focused on MSBs.

Suzanne Creighton So I think this is, it also showed that you have to focus on how are you operating, because that's really ultimately what gets you these big fines, right? Yeah. Don't worry about it. Don't worry about what the regulator is going to do. They're going to do their, their business, no matter what. Yeah. Just, you need to keep your house clean.

James Booth So how, how then, how can FinTrack really get a hold of this? Because surely if an institution starts to see that, well, we're only going to be subject to a civil penalty that we can potentially wriggle out of or tie ourselves up in courts for years, what should the direction of travel be?

Suzanne Creighton So I do believe that criminal penalty is important. Yeah. I mean, let's be honest. Will it happen? Will it happen? You know, I don't know. You know, this is where we have to buckle down and really decide how serious are we about money laundering? We are one of the most prolific money laundering countries in the world, and yet our regulations say we don't take it seriously. Yeah. You know, we will talk and say, but we do, and we're definitely trying. Human trafficking is a significant

James Booth issue here as well.

Suzanne Creighton It's very significant, right? It's horrifying. And, you know, it happens domestically, and we also have foreign human trafficking. We have it for labor, and also, of course, sex trafficking. We have CSAM. It's just, it's a nightmare. And so, and our fraud is through the roof, right? Even with the new agency that they're going to be instituting, it's a little too late. It also doesn't focus on AML. It focuses on fraud, so it's duplicative, but we need more.

James Booth It's super expensive to fight, though, and obviously banks tend to be the ones that have to reimburse customers.

Suzanne Creighton So, I mean, you know, and then banks are, banks, their hands are a little tied, and so you can't just always say to a bank, well, you have to just deal with the AML issue. It's always up to you, because banks are also going to take care of their own business, but then the STR machine, like, if you look at the numbers of what goes in... Yeah. ...in terms of dollar value and cases that go into FinTrack, and look, I'm not going to slide FinTrack, but the numbers are vast in terms versus what comes back out, and, you know, when you have teams, they'll always say, it's just a bottomless pit. We hear nothing back, and what really happens, right? And it's hard to really, you know, I think people are working, and they're sort of, like, not getting anything back from the regulator. Very little comes back. There might be a project here and there, and it's not enough back. I think Australia is way ahead of the game. You know, they have better engagement with their entities, and just they're more informed. They keep people more informed. There's better engagement. I think it should be set up like that. I think if we did something more a little bit like Australia, we had criminal penalties. I think that we're, look, I think it's great that we're doing the 40 times. However, you can still fight it and there's no real consequence. I also think you have to be prepared to do perp walks with people who are, you know, letting things happen. Until people are genuinely afraid, and this is the real thing, until people who are higher up are definitely terrified that they will potentially be arrested, nothing will change. And I can tell you, back in, you know, back maybe 10 or 12 years ago, you know, we used to have things like where the OSC or the OPP would come in, they would park their vehicles right down on Bay Street and they would do it because they wanted everybody to know that this bank was being investigated. And they would do it and they would put their jackets on and they would, it was all theater. Very, very showy. And what it said was, you do your job and guess who's here? The everyone would be like, oh my gosh, so-and-so has the police there. And it would fly through all of the banks. But it was, there used to be an amount of embarrassment by that. And, you know, when I would do large Ponzi scheme cases, we would talk and they would say, what we're going to do is we're all putting on our jackets. We're going to come down Bay Street with 15 trolleys and then parade back and forth. So we send a message that's like, don't do it because we are going to embarrass you. And I'm like, great. Who cares? But now, nothing happens. There's absolutely nothing.

James Booth There's a couple of things to unpick there. So I've just been trying to look in the background, Susie, about the number of STRs and not actually published data, but there was some published data a few years ago and through process of elimination, it's estimated between 500 and 600,000 a year in FinTracker Road. So that's just a little under the UK. So it's looking at six, 7,000 a day. Now, there's a few things, again, one or two bits I want to challenge you on. There are not 6,000 incidents of financial crime happening in Canadian banks every single day. So the mentality generally, because now AML is this big noise, we've seen AMP fines get issued, people see a situation, base it on a decision on a piece of data that's probably out of date, isolate a transaction, overwhelmed with volume, like false positives, and that's where we took, you know, in previous episodes, we spoke about how AI is really good at clearing up 90 plus percent of this. So we can't be pointing the finger at enforcement, because simply we're, the private sector, we're bombarding them with a load of shit to be candid.

Suzanne Creighton Yeah, I mean, look, I think the people who are doing defensive filing, because there are entities who, as soon as they heard the AMPs were going up, they started to do their defensive filing. It's just junk. And I mean, if you filed an STR, it's lengthy, you're attaching a lot of spreadsheets, you've got a network usually attached to it, even if it's one person, right? Normally it's one person who links to other parties, but let's just say you have your one party, you have got a very lengthy story, but if you're just doing defensive filing, it's going to be very brief because you're just quickly doing it and you're not going to have a ton of stuff.

James Booth Probably linked to a bit of a cultural issue though about, I don't want to be on the next Netflix special, or I don't want to be there.

Suzanne Creighton Yeah, they don't want to get hit for RGS because all the banks have gotten hit for RGS. But my thing with Fintrack is the same way that they should know that they've got people using front companies for all their addresses, they should be able to clear out and say, sorry, XYZ Bank or XYZ MSB, you've been sending us this percentage of clearly defensive filing. We're going to fine you for that because that's a waste of our resources and now we can't get to the good stuff. So I think that there should be... That's really

James Booth dangerous precedent though, Susie, because then what you're trying to challenge people and saying, well, you look at a decision let's just use a very simple example $15,000 hits an account in cash and you look at the KYC, it's a low-risk customer so it's four years old, it's not any expected activity, you can't get hold of the customer, you're going to file it and I'm saying that we could potentially because that would scare the living daylights out of me as an investigator

Suzanne Creighton I think that's, you know, and here's my thing, I think that this is where we need to be very crisp would I file for reasonable grounds to suspect? No. I mean, is that something, you know, to do? What gives you that

James Booth being in your shoes as an investigator before what gives you that confidence to say no, I'm not going to do that because I always think the risk sits where you don't report as opposed

Suzanne Creighton to what you do. And that's it, right? So you really have to start having very, like, and this is my thing, I'm always like, don't put, I don't want people just sitting in a seat who can't think, right? So what is the risk? What is the risk? So if somebody, are they creating activity? Is there activity in their account? Look, a lot of people, like, if they're older, if that comes in and it's, like, a 17-year-old person who has no job, or if it is an odd transfer, like, let's just say the person is domiciled here at the King Edward Hotel, and the money comes in from...

James Booth It's a very nice hotel. We must say, we're not being paid to be here. No, we're not.

Suzanne Creighton I know, it's really nice. It's always nice to just come and have a coffee here. And it smells really lovely. It is nice coffee, isn't it? Yeah. And let's just say they're very young, and then you saw the money come from a very unusual destination. And then you're thinking, like, why? Why would it show up at this address? And, you know, and I'll be honest, there's also a condo here, but it, you know, and they didn't put down a condo address with it, but they were just like, it's just this address, and then you couldn't find anything else. No job, no student, like, it was just a weird transfer. Yeah, sure, feel free to fall, but if they were...

James Booth It doesn't feel like true financial crime, though, does it? It just feels like panic, but I understand the issue.

Suzanne Creighton There's reasons, right? You have to have a reason. If it made sense, and let's just say it was, like, a 50-year-old person, and they just had, you know, money rolling in their account, and maybe we couldn't get in touch with them, maybe they're getting their hip done. I don't, you know, and they just didn't get back, and we'll send, keep marking it to have it sent out, do an email, see if we can get them to go into the branch. But, like, I think there's different panic levels, but I think that, you know, there's so many things that get bypassed. Like, look, we have a lot that goes into triage in a bank, and a triage for me is where they're putting junior people. Triage is really where it's your first touch point. That should be senior people. Pay them more because they're closing cases. And for me, that's where your reasonable grounds to suspect is really taking the hit. So I would just switch things up. If I was to go in and redesign a program, like if they said, design a program that you think is going to mitigate our risk, I'd be like, sure, I'm flipping it right on its head. Yeah. Well, this

James Booth is another priority of FinTrack. It's now about firms adopting technology. Wow. With the decision-making process. I mean, this is not a sales pitch, but it's a silent A. And I mean, I posted on LinkedIn a few days ago, look, I've been on both sides of the fence. I've seen it from fighting financial crime, and I've seen it from adoption of technology. Right. This is a perfect example where you can deploy technology and agents to be able to triage those, put them where they need to be, resolve the problem, and you're leaving the human beings to actually make the really risky stuff. That's the stuff that will get you in prison. It'll take you down. We could talk about this enforcement issue. I guess the headline is then, where can it go? Because if you get too enforcement thirsty, all that will happen is, why would I, as the next head of AML, want to take that role knowing that my head is on the block based on a load of historical issues? Why would I do that? You couldn't pay me enough money in the world to do that.

Suzanne Creighton Here's the thing. It should be a high-risk job. That's what it is. It's a very high-risk job. I think it

James Booth is, but it's whether the competencies of the people that, and I think especially in banks, the heads of sanctions and heads of AML are very seasoned people, and we know a few in the city, very, very well experienced and knowledgeable. My worry is this emerging fintech world where you see an advert on, say, LinkedIn, and it says two years of AML experience. What the bloody hell is two years of AML

Suzanne Creighton experience? Nothing. So I always look at this. Two years or I'll see people who progress very fast, and now they're a director with four years. I'm like, well, I think that there has to be hard and fast rules even with the certification. I was talking to a friend of mine, and she's like, I feel like, and she doesn't even work in AML, but she listens to me kvetch about this enough. And I think it should almost be like a journeyman's license because too many people don't have enough time. And people will be like, oh, I don't think I need it. You do because you have to learn, and it's just, it's a tiny thing. To see enough and really get the experience, because when you're working, and you work in different things like, do risk, do FIU, do compliance, do the tech side, go into the data side, do it all because then you have the whole picture.

James Booth So that's a bit of experience, isn't it? So let me flip this around then, because people can have all the experience in the world and still be incompetent. What competencies and skills do you think then that these decision makers, should have, should possess, and maybe need to evolve with the FinTrack priorities of things like adoption of technology with new enforcement? What would your advice be?

Suzanne Creighton Good. That's such a good question. So obviously be risk-averse. Maybe the people who like to jump off of buildings and believe that that's the same thing in business, not the business area. And just it's not that you're paralyzed by looking at business, it's just that you really are thinking about how do we mitigate risk, understand governance, because that's a big part of this, and be interested in the legislation and regulatory.

James Booth Actually, I will add to complement your view, to take that legislation and to almost be the translator, to translate it to the firm at a policy level and messaging level. That's a skill right there, isn't it?

Suzanne Creighton I did that for the PCMLTFA, amendments, because it is very challenging for a lot of people to really understand, right? They're like, I don't really understand what that means, especially for the tech side where we had an entire project stalled because the tech group, and rightfully so, was like, this means zero to me. And also, it was interesting to see, so when they were like, data lake, what does this large body of regulations mean to data lake? I'm like, okay, you know, great, great question. So we went through all the tech pieces and then had the conversation and you're right, it's translation. And it's like that for every single group. So I was so thankful that I got to do that. I was actually, like, we were you know, under the wire. We had to drop it on a certain date. I was like, what a great opportunity to do that translation piece. And you're right, that has to be in every business and most businesses don't have that. Yeah. Yeah. So

James Booth I mean, that's, excuse me, that sounds like a perfect workflow consultant, doesn't it, to be able to interpret those skills. But there's something to be had though about this blend of experience and blend of knowledge and those skills to transfer into those leadership roles. I feel like we could talk about this issue forever, but in the interest of time, I want to roll the conversation on slightly because we've focused a lot at a regulatory level and a senior management level a lot of people that will be listening or watching webinars or listening to podcasts are younger people that have got real passion or people that are trying to break it in the industry. As I'm sure my LinkedIn inbox sometimes melts with people asking, I want to get into AML, what do I advise? And it's a really heavily loaded question. So let's think about investigators. So we know predominantly what the role of that is, but this new world of OSINT and HAL is that sort of a game changer in the world of an investigator or is it a bit more of a shiny object? It's a real buzzword. So the industry genuinely feels like the OSINT is powerful in investigations. So does it truly have access to all the information or is it just making people feel like they do? What value can it add?

Suzanne Creighton So look, I think it's one of the tools that you must have in your toolkit. And I think this is the one thing I will tell everybody. You will need to be adaptable and you will need to be prepared to use many different tools to get the information and to solidify it before part of your adjudication. So OSINT definitely is one of them. You know, a long time ago when I worked at BMO as a legal analyst and the wonderful head of litigation hired me said, everybody here is all the same, but you just had the ability to think out of a paper which is another skill, right? It's a skill.

James Booth To try and fix the same problem with the same

Suzanne Creighton solution. Yeah, right, and this is what I will say, you must be able to solve problems and so do everything, it's not just about like Googling stuff it's about going into, you know normally when you're in AML you're given a protective area we don't go into the dark web, this is not where we go because it's included, but you can search many different things and I challenge people to look very differently at things because you will find things about people, it may just be do you have to change one initial, one letter just look at things slightly differently you cannot be in a tunnel and look at something, you have to just slightly step back and think, okay, am I investigating one person could it be something else, how well should I approach this, and really think about things very uniquely when you're trying to solve a problem, but it cannot be through this one very narrow lens and go, oh, it's Steve it's Steve in Florida, or Steve in North Bay, you're just trying to figure out, like, is Steve somebody who's trafficking human beings, or is he clear, and could there be a problem with his date of birth or can we get it validated is this real ID, and sometimes that comes down to, I look at you know, I always used to have this rule people could only use blue ink because when we scanned it up, I could see if it was original or not and so we didn't use black ink just because of our scanning, the world is evolving but check signatures check them and check them and check them and get multiple documents we'll post everything, like now the best thing is, people post their entire lives all over the place go and look at it, and when somebody says, like if it's a transaction and it was like $10,000 go and look on their social media and see if it lines

James Booth up, do you know that, the only difficulty I have with this is that, do you know what I think has caused this problem I'm about to talk about is the term negative news the moment you say negative, you look for something bad, and a prime example of this one, we were doing a little workshop around this, and my job title has anti-money laundering and somebody in the room said, yeah but that means you know how to launder money, so their default was that I know how to do a bad thing, instead of actually looking at it holistically and saying what's that, and that's the biggest piece of advice I give to people that work in that space well there's two things actually, the first one is try and look at everything with a balanced approach try not to be drawn into terms like negative, or looking for suspicion, I think the real thing that people need to be able to do is how to interpret, how to interpret the story using technology so how can technology support that and I know I'm talking a lot about it today but it really does it really is changing the game because there are things that can be drawn out on the deep web which is probably more of interest to us because of behind paywalls and credentials and things like that

Suzanne Creighton there's so much tech available I think in every AML business you are given so many tools to look up information that's not readily available to the public use all of that and then use it as a jumping board and then go run with it and sometimes you'll ask for additional information I will say this I won't go into the whole case but we did have one it looked a bit off it did end up being a very large human trafficking case of small children but we did ask for emails between the client and the entity and what was revealed and they had completely overlooked it what was revealed was just in their communication and then we did the deep dives and ran in everybody's name in the technology but then we went out and did everything OSINT was used, everything and what we did find was absolutely horrifying but it's again, you use technology and you continue sort of that web and you spread out and use everything that's possibly available and then you have to also revert to you have to start thinking, you know, where we were like okay, this doesn't look normal but go back and in this case it was international so you look and say what are the international rules on adoption okay, it didn't meet it and then you start really adding more facts in and create your case

James Booth Feels like sometimes we can feel overwhelming in this fight against financial crime doesn't it but look, I know we've been we've pulled the line a little bit sometimes with the regulator review but this is a very different regulator to what it was five years ago and now they've got those teeth and they're using them a little bit more and this is probably going to happen if a major fine now lands on a Canadian institution in the next year and again being candid I think it might based on how the FATF mutual evaluation we spoke about this evolution of enforcement increasing significantly what would the post-mortem say?

Suzanne Creighton So right now we've got two entities one is under review right now one we're waiting to find out what happened so potentially we could have two in like a 12-month period which would be unbelievable depending what happens I think everybody's in the same boat let me be honest the others that have been fine they're no different than anybody else so it's ostensibly the other two are in the same boat I think what it says is that sleepy Canada because we're really we're the polite country needs to sort itself out like we've had some we've had some very big issues here but I think that everybody you know believes that because we're kind and we say please and you know we're I guess we're amenable we just haven't sorted it out I think that what it's going to point to globally is that maybe we're riskier than people have thought that we were and if we don't fix this then we're going to have problems on an international level certainly with our good friends to the south I think that they may take even more issues with us which I think is concerning we've always had this open line with them, it's been very very easy that might change because of it which would be I think very devastating to Canada I think going into the EU or even broader like to Asia the Manor region we don't want any problems but I think if people start seeing us as a risk I think that really would have a very negative impact that could happen

James Booth and of course we've got an FATF presidency change this year so it depends on what the priorities of them are and it's going to be the UK as their next presidency so look I think we've covered a lot of ground but would it be a fair assessment to say that the future is brighter than it's been in a long long time with AML enforcement, regulation and just generally

Suzanne Creighton I think it's ever present on people's the tip of their tongue so that is a good thing I will say this I think that we need to have change that hasn't happened yet so we're hopeful for the future that change will come and I think it's still the room to grow is always optimistic

James Booth Thank you, well first I just want to say thank you for coming we've ended it on a nice note which is nice maybe we could meet after the FATF evaluation to see what the outcome of it is and maybe we could have a chat again about that

Suzanne Creighton We'll have to either have a very harsh drink or a bottle of champagne and then do the podcast

James Booth Yeah, I like it Susie, thank you so much for joining us again, I appreciate it So good