The misleading claim that bank reports show Hunter Biden ‘committed serious crimes’

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“Hunter Biden committed serious crimes, as you mentioned, 150 suspicious activity reports. Those are the most serious banking offenses. That’s when the bank notifies the feds that we’re convinced that our client has committed a crime. He asked several banks to file 150 suspicious activity reports, saying that we believe that each case was another criminal act. But yet the FBI did nothing about it .

— Rep. James Comer (R-Ky.), in an interview with Fox News’ Maria BartiromoOctober 16

If Republicans win the House in the November election, Comer is on track to chair the House Oversight Committee. In his interview with Fox News, Comer signaled that the business dealings of President Biden’s son, Hunter, and his brother James with countries such as China, Russia and Ukraine will come under scrutiny. at a GOP-led convention.

“Clearly the FBI must be held accountable. Congress needs to start considering meaningful reforms,” Comer tweeted with an excerpt from his interview. “For too long, the Biden family has peddled access to the highest levels of government and the FBI has been slow to act.”

For the purposes of this fact-check, we’ll be looking at his claim that Suspicious Activity Reports (SARs) mean a bank is “fairly confident” that a crime has been committed. Comer, in fact, said every filing of an SAR meant “another foul play.” Is this really the case?

As part of the government’s efforts to combat money laundering and terrorist activity, financial institutions are required to file SARs with the Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department. A SAR is supposed to be triggered by a minimum transfer amount (usually at least $5,000, or $2,000 for money services businesses) and a suspicion that the transfer involves funds derived from illegal activity.

The Treasury also requires that all cash transfers over $10,000 be reported separately. A SAR can also result from cash transfers that appear structured to avoid triggering such a report, such as repeated payments to the same person or entity of $9,500.

After the September 11, 2001 attacks, banks dramatically escalated SAR reporting after learning that terrorists had financed their attacks using the US financial system, but no SAR had been deposited on their transactions. The Patriot Act, passed after the attacks, had added new reporting requirements.

As a result, FinCEN expects to receive nearly SAR 3.7 million in fiscal year 2023, according to a Treasury report submitted to Congress.

By Comer’s logic, this would suggest that banks would report 3.7 million crimes. But that’s not right.

“A financial institution only had to say ‘something is wrong about it’ using FinCEN guidelines,” said James E. Johnson, Treasury Undersecretary for Enforcement at the end of the 1990s, which oversaw FinCEN. “It’s way below, ‘I think a crime has been committed.’ ”

Another former Treasury official, who spoke on condition of anonymity due to the political nature of Comer’s comments, described the SAR reports as merely a “hint”. He noted that the threshold for filing an SAR is not particularly high and many banks file the reports just to be on the safe side. “There is an incentive that, when in doubt, to file a report,” he said.

The Bank Policy Institute (BPI), an advocacy group for big banks, says banks receive computer-generated alerts about potentially suspicious transactions, and then a compliance officer decides whether or not to file an SAR. “Because banks are subject to enforcement action if they fail to file SAR when they should, but face no penalties if they file unnecessary SAR, the general presumption is to file the SAR,” indicates the group.

The filing of a SAR in itself does not necessarily trigger an investigation. Each SAR is filed in a massive database that law enforcement officers can later access when investigating a person or entity, providing further investigative leads.

For example, a New York bank had filed an SAR after New York Governor Eliot Spitzer (D), in 2007, allegedly wired more than $10,000 from a Manhattan bank account, but sought to halt payment. in an apparent effort to avoid triggering a currency transaction report. But that report went unnoticed until another bank later filed a report on two shell companies that had raised hundreds of thousands of dollars with no apparent source of revenue. This investigation eventually led Internal Revenue Service agents to uncover the SAR previously filed on Spitzer, according to The New York Times. Spitzer quit after investigators linked his wire transfers to a company that supplied high-end sex workers to wealthy clients.

In a 2018 report, BPI said an investigation found that only about 4% of SARs filed in 2017 led to an enforcement investigation — an estimate the former Treasury official said seemed exact. “A small subset of these results result in an arrest and ultimately a conviction,” the group states. If a bank concludes that an SAR reflects actual criminal behavior, as opposed to suspicion, “someone at the bank will call law enforcement directly to report the SAR.”

In other words, we have established that filing an SAR does not mean that a bank believes a customer has committed a crime, as Comer asserted. In fact, Comer should know that. He posted on the committee’s minority website a Sept. 2 letter from a Treasury official that clearly states that the SARs are “preliminary and unverified information about possible violations of the law.”

When we presented our findings to Jessica Collins, communications director for the House Oversight Committee’s minority staff, she responded with a statement that circumvented Comer’s error.

“Hunter and James Biden have accumulated at least 150 suspicious activity reports for their business dealings,” she said. “SARs are used to identify possible illegal activities like money laundering or tax evasion. The number of transactions reported in this case is highly unusual and may indicate serious criminal activity or a threat to national security. »

While Comer often speaks of 150 SAR filings as an established fact, his source is a vague media report. Collins said the source of the figure was a CBS report in April that said, “150 financial transactions involving the global business affairs of Hunter or James Biden have been flagged as concerns by U.S. banks for further review.” But, unlike Comer, that same report correctly noted that “such bank reviews could reveal deeper issues – or they could turn out to be harmless.”

In a July letter to a financial adviser to Hunter Biden, Comer suggested that an exchange of text found on a copy of the laptop hard drive Hunter Biden allegedly left for repair at a Delaware store in April 2019 said the president’s son “knew about these SARs and took steps to avoid discovery in his financial dealings. Experts working with the Washington Post checked thousands of emails contained on the hard drive , but no SMS.

A lawyer for Hunter Biden declined to comment. A representative for James Biden said, “We have no information regarding any SARs that may have been filed about James Biden.”

In the statement, Collins also said the Biden administration had sought to restrict congressional access to SARs.

“Under the Biden administration, the Treasury Department changed its long-standing policy to restrict congressional access to these reports,” she said. “We need access to these reports to determine whether the Biden family’s business schemes threaten national security or have compromised President Biden. Instead of defending Hunter Biden’s SARs, it would be better to investigate why Biden’s Treasury Department is trying to hide them.

His complaint enjoys bipartisan support. In July, by a vote of 349 to 70, the House passed a bill sponsored by Rep. Maxine Waters (D-California) that would require the Treasury to provide SAR reports to a committee or subcommittee of Congress. within 30 days. Waters said in a report that the action was necessary because the Treasury had imposed requirements that hindered congressional investigations, such as “requiring congressional staff to review all documents in a Treasury reading room, prohibiting the copying documents for purposes of prominence, continued reference, or margin notation, and limiting information gathering to note-taking.” The suit is still pending in the Senate.

It’s unclear if the new Treasury rules are related to Hunter Biden. The Trump administration has also been accused of slow Congressional requests for SAR information and argued, in a legal opinion, to limit Congressional access. Trump’s Treasury Department, however, provided SARs linked to Hunter Biden to Republican Senate investigators, who relied on the raw data to make dubious claims about his business practices.

Treasury spokesman Mike Gwin dismissed Collins’ statement. “Treasury provides SARs to Congress in a way that allows for robust oversight and is consistent with how other sensitive law enforcement information is often produced,” he said. “This is not a political process. Since the beginning of this administration, the Treasury has made SARs available in response to authorized requests from the committee and continues to engage in the process with all individual members seeking information.

Comer could soon be in a position of significant power. But he must clarify the facts. Even though as many as 150 SAR reports have been filed relating to Hunter Biden’s business dealings — a number yet to be confirmed — that doesn’t mean he committed ‘serious crimes’ or that the banks were ‘fairly confident’ that he did. a serious crime has been committed. Instead, these reports are just hints that something may be suspicious — raw intelligence that has yet to be verified, confirmed, and possibly investigated.

Comer wins Three Pinocchios.

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