FinCEN and Data Analytics in Preventing Criminal Activities

The assignment discusses the importance of data analytics in detecting and preventing criminal activities. It highlights two instances where financial institutions were penalized by FinCEN for violating anti-money laundering laws: Merchants Bank of California was fined $110 million, while BTC-e Virtual Currency Exchange was also fined $110 million for facilitating ransomware and dark net drug sales. The text emphasizes the role of data analytics in identifying patterns and relations to prevent criminal activities before they occur.

Running head: IT INFRASTRUCTURE MANAGEMENT PG
IT Infrastructure Management PG
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Answer 4....................................................................................................................................2
Answer 5....................................................................................................................................3
References..................................................................................................................................6

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Answer 4
 The growth in the business of Liberty Wines has put considerable pressure on the IT
department of the organisation. The personnel recruited in the IT department had to
process more business data that they could possible handle. Besides, the systems in
the organization were old and outdated, due to which the systems slowed down
gradually and required better grade of maintenance, which proved expensive for the
organisation. Last but not the least; the company recruited a large amount of
employees with the target to improve productivity of the company. However, this
action of Liberty Wines had proved fatal as instead of increasing, the productivity of
the employees decreased. The core business processes, inventory management
functions as well as the order processing operations were adversely affected by the
sudden growth of employees within the organisation ("Liberty Wines (UK)", 2017).
 Liberty Wines used an improved backup system to enhance its stability and
flexibility. It reduced its expenses that were devoted for replacing hardware, power
and air conditioning, and speeding up of business operations by enabling apps to
perform quickly ("Liberty Wines named IWC Merchant of the Year / News / News,
Reviews & Blog / libertywines.ie", 2017). Such actions of the organisation enabled its
employees to provide better productivity as well as give its customers an excellent
experience in marketing. In doing so, the growth of the business became easier and
quicker to achieve. This is the method by which Liberty Wines’ IT infrastructure gave
competitive advantage to the same by providing enhanced service, minimised
expenditure and prospect for growing in future ("News / News, Reviews & Blog /
libertywines.co.uk", 2017)

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 The organisation minimised the cost of maintenance of air condition and power
supply by around 60 percent by reducing the quantity of server from 10 to 4, one
being the backup server of the organisation. The company with better utilisation of
applications achieves improved customer service and management of inventory that
has ensured enhanced performance within the same. The replacement of hardware
components required lesser expense and saved the company 69,500 dollar in the
initiative. The servers could be implemented with better ease and efficiency than their
hardware predecessors whenever required by the company ("Liberty Wine Merchants
- News", 2017).
Answer 5
 The financial institutions provided reports with inconsistency data, which lacked
validity and standard. The organisation only utilised simple routines and small data
sets while performing analysis of data. FinCEN lacked the capacity to perform
analysis on large datasets and could not analyse proactively or predict trends. FinCEN
availed various offline systems for sending data reports to different agencies. The
reasons cited in the statement above are the foundation stones for the limitation of
FinCEN’s abilities to fight financial crimes (“FinCEN.gov”, 2017).
 To achieve its objectives FinCEN must improve its IT framework, ability of analysis
and database. An improved and sophisticated analytical system will ensure collection
and analysis of data with enhanced efficiency from different sources and provide the
federal, local and state law enforcement and regulatory authorities with such
information. The data analysts of the bureau should be more skilled to provide better
analysis and examination reports of the collected datasets. FinCEN upgraded its
database from its old legacy systems to its new and advanced System of Record. The

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development in the IT framework will ensure the organisation to gather, analyse and
store all of its data digitally ("FinCEN Updates", 2017).
 Financial intelligence depends highly on the quality of data analysis. An efficient and
intelligent analysis of data can recognise common patterns and relations in data much
effectively, which helps in disrupting criminal activities ("FinCEN Compliance -
Federal Regulatons | CSI", 2017).
 The ability to identify patterns and relations in a data is critical to national security as
it helps in finding possible links of individuals with terrorists or criminals in terms of
illegal financing or money laundering, which in turn will help in the disruption of
criminal activities before it is carried out (“FinCEN.gov”, 2017).
 Provided below are some of the recently detected criminal activities that has been
disrupted by FinCEN:
FinCEN has charged Canton Business Corporation (BTC-e) with deliberately
breaking US law for anti-money laundering (AML) on July 27, 2017 (Coleman et al., 2017).
FinCEN ordered the organisation to pay a fine amounting to 110 million dollars for providing
illegal financial support to the ransomware Dark Net Drug Sales ("FinCEN Fines BTC-e
Virtual Currency Exchange $110 Million for Facilitating Ransomware, Dark Net Drug Sales |
FinCEN.gov", 2017).
The Merchants Bank of California was penalised by FinCEN for deliberately breaking
various laws of the Bank Secrecy Act (BSA). The verdict was announced on February 27,
2017 ("FinCEN Penalizes California Bank for Egregious Violations of Anti-Money
Laundering Laws | FinCEN.gov", 2017).
Data Analytics is an important role player in detection and prevention of criminal
activities. A collected data is analysed thoroughly for possible common factors in patterns

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and relations (McCue, 2014). The analysed report is then matched with other older reports for
possible matches in patterns and relations. In case any match is found with any other report of
criminal activity; it becomes easier to prevent criminal activities before it even occurs
(Cardenas, Manadhata & Rajan, 2013).

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References
Cardenas, A. A., Manadhata, P. K., & Rajan, S. P. (2013). Big data analytics for security.
IEEE Security & Privacy, 11(6), 74-76.
Coleman, L., Coleman, L., Madore, P., Sardesai, N., Smart, E., & (@DrewjCordell), D. et al.
(2017). fincen Archives - CryptoCoinsNews. CryptoCoinsNews. Retrieved 6
September 2017, from https://www.cryptocoinsnews.com/tag/fincen/
FinCEN Compliance - Federal Regulatons | CSI. (2017). Csiweb.com. Retrieved 6 September
2017, from
http://www.csiweb.com/industries-we-serve/financial-institutions/regulatory-
compliance/federal-regulations/fincen
FinCEN Fines BTC-e Virtual Currency Exchange $110 Million for Facilitating Ransomware,
Dark Net Drug Sales | FinCEN.gov. (2017). Fincen.gov. Retrieved 3 September 2017,
from https://www.fincen.gov/news/news-releases/fincen-fines-btc-e-virtual-currency-
exchange-110-million-facilitating-ransomware
FinCEN Penalizes California Bank for Egregious Violations of Anti-Money Laundering
Laws | FinCEN.gov. (2017). Fincen.gov. Retrieved 3 September 2017, from
https://www.fincen.gov/news/news-releases/fincen-penalizes-california-bank-
egregious-violations-anti-money-laundering-laws
FinCEN Updates. (2017). Service.govdelivery.com. Retrieved 6 September 2017, from
https://service.govdelivery.com/accounts/USFINCEN/subscriber/new

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Liberty Wine Merchants - News. (2017). Libertywinemerchants.com. Retrieved 6 September
2017, from http://libertywinemerchants.com/pages/posts/red-tag-sale-happening-this-
month-at-all-liberty-locations10.php
Liberty Wines (UK). (2017). Libertywines.co.uk. Retrieved 3 September 2017, from
http://www.libertywines.co.uk/
Liberty Wines named IWC Merchant of the Year / News / News, Reviews & Blog /
libertywines.ie. (2017). Libertywines.ie. Retrieved 6 September 2017, from
http://www.libertywines.ie/news-reviews-blog/news/liberty-wines-named-iwc-
merchant-of-the-year/
McCue, C. (2014). Data mining and predictive analysis: Intelligence gathering and crime
analysis. Butterworth-Heinemann.
News / News, Reviews & Blog / libertywines.co.uk. (2017). Libertywines.co.uk. Retrieved 6
September 2017, from http://www.libertywines.co.uk/news-reviews-blog/news/
United States Department of the Treasury Financial Crimes Enforcement Network |
FinCEN.gov. (2017). Fincen.gov. Retrieved 3 September 2017, from
https://www.fincen.gov/