From the Front Lines: A Former Anti-Terrorism Instructor on Fighting Financial Crime

Topics: Financial Crime, Fraud & Anti-Money Laundering (AML) Blogs, Government, Leadership, Legal Innovation

financial crime

Rick Wells is no stranger to capturing terrorists, thwarting criminal enterprises, and fighting to keep drug dealers from harming the public. He’s interrogated them, he’s arrested them, and he’s brought them to justice out on the battlefield.

What makes Wells an expert? As Bank of America’s current Director of the Global Financial Crimes Compliance group, he is responsible for financial crimes investigations, focusing on anti-money laundering (AML) for Bank of America’s customers. Prior to joining Bank of America, Wells was a Violent Crimes Investigator for the Charlotte-Mecklenburg Police Department where he worked for eight years, concentrating on gang violence, drug violence and serious weapons offenses. Wells was also a U.S. Marine and certified Anti-Terrorism Instructor sent abroad to train military and Department of Defense Security Forces in the History of Terrorism, Terrorism Operations (including how they structure and finance their cells and operations), Hostage Survival and other basic and self-defense tactics to detect and thwart terrorists.

Wells couldn’t do his various jobs as well without critical information-sharing between the public and private sectors. We recently spoke to Wells about stopping the flow of money to fund terrorism and the importance of public-private partnerships in fighting financial crime.

Legal Executive Institute: Drawing from your combined 26 years of military, law enforcement and banking experience, is there a difference between money laundering and terrorist financing?

Rick Wells: The key difference between money laundering and terrorist financing, is that money laundering can typically be captured because of the more overt patterns in those transactions, primarily due to the volume and rapidity of money-movement needs. Terrorist financing on the other hand can be as large or as small as one could imagine, and it does not necessarily need to move the money with speed because of terrorists’ slow, deliberate planning and the utmost necessity of operating covertly. You or my legitimate paycheck could be used to support a one-time need of a condo purchase to park a sleeper cell or a onetime purchase of a van for the surveillance operation. Terrorist financing includes funding goods such as food, fuel, rental property — such as apartments, homes, and cars — munitions, first aid, etc.

Terrorist financing’s transactional flow may not trip automated radars and is typically picked up through strong and trusted public-private partnerships.

financial crime

Rick Wells, Bank of America’s Director of the Global Financial Crimes Compliance group

Legal Executive Institute: What are some of the best ways to analyze high-risk customers?

Rick Wells: I like the idiom “boots on the ground” — high-risk customer analysis should involve all sources available, but most importantly, include actual site visits by client teams and compliance teams.

Holding face-to-face interactions, analyzing record-keeping processes, and observing who, when and what their customers are using the financial institution for are important. Without the intelligence from folks on the ground, we can miss key clues; and often only that soft data can help complete the picture during the trust-building phase of the relationship. It’s the component that’s based on actions and reactions from site visits and questions.

In addition, intelligence gathered from reputable sources in the region are key and analyzing that information with the data (including non-transactional data) provided by the customer helps with deductions.

Let’s say I’m a starting up a cryptocurrency operation. I enter the U.S. and open U.S.-based accounts that indicate I’m in the computer services industry. A few weeks later, all of my online access is from Russia even before I start moving money. It could be that I’m visiting the country, but then we find cash deposits going into the account from all over the country and being transferred around online before ultimately being sent to a cryptocurrency dealer. That could be a red flag.

Legal Executive Institute: What tools do you currently use in your role to combat financial fraud crimes?

Rick Wells: Our front-line units own the monitoring of fraud-related activities in place across the varying channels Bank of America has for its products and service offerings as a first-line of defense. Secondarily, we have dedicated fraud investigation teams that specialize in the varying front-line units and their specific channels, such as products or services that are offered or used. The investigations team uses a tool chest full of both internally built systems and vendor systems, as well as a robust cyber-intelligence unit that meets regularly.

Legal Executive Institute: What current trends are you seeing in money laundering, terrorist financing, or financial crimes?

Rick Wells: I am seeing more startups entering the financial system by misleading the bankers, whether for cryptocurrency purposes or marijuana-related businesses.

Also, we’ve lately seen an uptick in Ponzi or pyramid-type schemes where cryptocurrency “alleged” startups are attracting investors; however, we also see large payouts to the founders of the so-called new cryptocurrency. With the rapid movement of funds flowing through this type of process, you can imagine how quickly someone can get access to a lot of virtual currency.

Legal Executive Institute: As digital technologies have improved and diversified, so have the threats facing organizations. How can banks best fight against the threat posed by bad actors in the blockchain or cryptocurrency space?

Rick Wells: Banks can help fight financial crime by being involved in every part of the conversation and process. We will need to learn and adapt, even shift skill sets needed to identify the risks in the technology.

Further, financial institutions should encourage their respective governments to broaden the information-sharing laws to allow for more transparency between institutions across borders.

Blockchain and cryptocurrency are not going away, and this is due to consumers wanting other options to traditional banking. Blockchain is designed to be more transparent, and I interpret this to mean that public consumers are wanting more transparency. Financial institutions need to work with each other and their governments to get real-time information to each other in a collaborative way to tackle the illicit activity which reduces institutions’ exposure to compliance risk over the long run.


Want to hear this live? ACAMS and Thomson Reuters are coming to Charlotte on April 24 and to Washington, D.C., on April 26 in a series of events that will focus on how the partnerships between law enforcement and the financial industry are critical to combating financing of criminal activity and terrorism. Register now!