BSA data serves key role in investigating financial crimes


Date: January 18, 2023


WASHINGTON — IRS Criminal Investigation (IRS-CI) released investigative statistics Wednesday on how the agency uses Bank Secrecy Act (BSA) data in its financial crime investigations. Over the past three fiscal years, more than 83% of IRS-CI criminal investigations recommended for prosecution had a primary subject with a related BSA filing. Convictions in those cases resulted in average prison sentences of 38 months, $7.7 billion in asset seizures, $256 million in restitution, and $225 million in asset forfeitures.

Under the BSA, financial institutions must notify the federal government when they encounter instances of potential money laundering or tax evasion. This data is used by federal agencies to investigate money laundering and related financial crimes.

"The Bank Secrecy Act exists to prevent financial institutions from being used as a vehicle by criminals to conceal or launder their ill-gotten gains. It also serves as a safety net for crime victims," said IRS-CI Chief Jim Lee. "Hundreds of millions of dollars in restitution have been awarded to crime victims because our agents were able to use BSA data to prove a crime was committed."

BSA data helped identify unusual financial patterns tied to Rubbin Sarpong, of Millville, New Jersey. He was sentenced in May 2022 to 14 years in prison for conspiring to commit wire fraud, money laundering and tax evasion resulting from a romance fraud scheme. He and his co-conspirators established online romantic relationships with victims and then requested money from those victims, often posed as U.S. military members stationed in Syria. They claimed they were awarded gold bars, but needed assistance shipping the gold bars back to the U.S. The victims sent money to the scheme perpetrators, which was transferred to other bank accounts, withdrawn or wired to co-conspirators in Ghana. At sentencing, Sarpong was ordered to pay restitution of $3.08 million to 36 victims, along with nearly $400,00 to government agencies.

BSA data was also instrumental in the prosecution of serial tax fraudster Michael Dexter Little. Little was sentenced in January 2022 to 19 years, six months in prison for conspiracy to commit wire fraud, conspiracy to commit money laundering, and aggravated identity theft. Little filed a series of false tax returns claiming massive, bogus fuel tax credits. He filed the false returns in his own name and in the names of co-conspirators and identity theft victims. As a result of this scheme, Little and his co-conspirators obtained at least $12.3 million in fraudulent tax refunds and attempted to obtain at least $27 million more. Little and his co-conspirators also conspired to launder the funds and purchase real estate and other assets. Little was previously convicted of tax fraud twice, in 1999 and 2003. BSA data provided locations of crimes, identified suspects, was used to seize fraudulent proceeds and identified past criminal activity to demonstrate a pattern of behavior. Little was ordered to forfeit at least $12.3 million traced to his crimes.

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI is the only federal law enforcement agency with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.