Dawn of a New Age of Global Crime: Duncan Levin of Tucker Levin Assesses the Battlefield
Duncan Levin is an expert in criminal law, Anti-Money Laundering (AML), internal investigations and anti-fraud. He recently joined Rebellion Research’s advisory board. Over his career, he has investigated a multitude of crimes including corruption, white-collar fraud, identity theft, organized crime, terrorist financing and narcotics. After obtaining his law degree from Yale Law School, Duncan began his career as a prosecutor for the Manhattan DA. His career spanned both State and Federal Law Enforcement, focusing on AML and Asset Forfeiture.
Nowadays, Duncan is the Managing Director of Tucker Levin PLLC, where his company consults on a variety of challenges across criminal and regulatory investigations as well as anti-fraud policy and processes. His background and experience are very unique, so we decided to take this opportunity to learn a bit more about how he has become a valuable collaborator and reliable media analyst.
RR: We know that you’re a recognized expert at both a State and Federal Level. Can you begin by telling us a bit about your experience in financial crime investigations which led to you being recognized as an expert?
DL: I spent a large part of my career focused on financial crimes. Financial crimes is a broad subject obviously. It includes white collar crime, which is largely non-violent crime where the main motivator is money, and these are usually paperwork intensive crimes, but it also includes anti-money laundering (AML) violations by financial institutions and lack of controls around their sanctions programs.
What led me to these types of cases first as a prosecutor was their complexity. I enjoyed, and still enjoy, cases where the subject matter of an investigation is complicated enough that it takes really delving into it to understand. Now that I am on the client services side of it, I really enjoy helping individuals and financial institutions set up their lives and businesses in a way where they can continue to make money and not run afoul of any laws. When it comes to financial institutions in particular they have to be very careful to set up their programs in a way that there are controls around money flow and they are not doing business with customers who may be sanctioned. They need to ensure they know who their customers are and they are properly screening customers and transactions so that they don’t violate any regulatory schemes.
RR: So are you helping with the Know Your Customer (KYC) and Customer Due Diligence (CDD) or do you do you design the processes for these companies to meet their requirements?
DL: We are more focused on the design and implementation of systems for AML and compliance screening, but we do have an investigation function as well. In certain circumstances we will perform provide Enhanced Due Diligence (EDD). CDD is usually a lower level of screening. When there is something suspicious about a client’s customer that requires additional investigation, it is called EDD. EDD typically requires a little more sophistication and that is when we will get involved in some real-time transaction monitoring and customer screening.
RR: Looking back at your career and your wide variety of experience, what have you found personally rewarding?
DL: I have really loved building out this law firm. I loved the challenges of being in the government and the sense of doing justice, but the biggest challenge for me has been the entrepreneurship of building out a law firm. Building a terrific staff and the capacity to handle complex problems that clients bring to us. I love helping people and companies in their time of need and being able to be responsive to them. For me, that has been the greatest and most exciting challenge I’ve ever had. It’s hard to point to one case and say that case was particularly rewarding. I really enjoy complicated cases. So, I would say the more complicated a case is the more I personally enjoyed it. I love being able to take a new case and develop it out and to help my client out.
RR: Growing a company can be a steep learning curve, what do you think was you biggest take away from that?
DL: The joy of what I do is that every new client matter is an opportunity to learn a new industry or learn a new skill. I am routinely interacting with the C-suite of companies who need help in the regulatory area or individuals who may need some assistance with complicated legal matters. So every case I get is an opportunity for learning and growth, and from that it allows me to bring this expanding skill sets to new clients and cases.
RR: Over the course of your career do you feel there has been a shift in the perception of white-collar crime?
DL: Yes, I think the penalties have grown larger over time, and I think there is a certain amount of anger towards financial institutions after the stock market crash and the financial issues in 2008. I think you see a lot more animus towards financial institutions and whether it’s warranted or not, I think financial institutions are dealing with this. There is always a shifting sand of regulatory requirements and legislation, so it’s not always clear to financial institutions how to deal with the regulatory regime that exists. It’s always a problem when laws are not clear. Here in the US in regard to AML and financial crime regulations, laws are shifting around so quickly that it is very hard to keep up. That is why it is important for companies to keep counsel and staff that are familiar with these changes as they are happening.
RR: Actually, on that topic, do you see that dealing with major multi-national companies to be very different to just dealing with US based companies because these regulations vary from country to country?
DL: Yes, I routinely deal with multi-national companies, some of which are not even based in the US but are doing business in the ubiquitous US dollar. Everybody clears in the US dollar, so there is really no way of avoiding doing business without touching the United States in some way. The US has a very broad view of its extra-territorial jurisdiction over financial crimes. So I have a lot of companies that buy and sell products that have no presence in the US and yet they still find themselves ensnared in US regulatory problems. I think there is a certain level of incredulity within international companies when they become entangled with US regulators when frankly they have nothing to do with the United States, but the fact of the matter is that when you do business in the US dollar you are subjecting yourself to US jurisdiction.
RR: Given the global nature of financial crime, do you think that we have the tools to handle it domestically or are we becoming more reliant on our international partners and international organizations?
DL: I think the United States has to work closely with other countries in order to truly combat financial crime. Financial crime is often international, and it is very difficult to find people who are committing crimes from an internet café from Belarus, for example, without working with the government there. Even when you do, multi-national law enforcement has a number of challenges including being able to identify someone who is sitting on the other side of the globe, seizing assets etc. Even when they go well, these can be very slow and clunky processes. I don’t know that there is a good solution to that except to say that international law enforcement cooperation is essential to being able to reduce financial crime.
RR: What do you see as the role of technology and innovation in the fight against financial crime?
DL: Technologies are getting so much better at doing real-time transaction monitoring, both to flag suspicious transactions and to perform real-time due diligence. There is just so much more information available out there now. It used to be that financial institutions would see if one of the parties to a transaction was on a sanctions list somewhere. Nowadays we can take into account adverse media, corporate reports and online data. A lot of it can be automated with these new technologies. There are a lot more opportunities for financial institutions to flag and identify suspicious transactions.
RR: What are your views on cryptocurrency as mode of money laundering?
DL: A lot of these cryptocurrencies are still largely used by criminal enterprises and individuals engaged in criminal activity. It is still pretty hard to go to your local deli to buy a sandwich with Bitcoin.
I think there is definitely going to be a real role for cryptocurrencies in the future, and I can see a lot of applications for the next generation to use it. I think that the next generation’s comfort with technology will mean that they will be much more comfortable with rejecting the more traditional fiat-based currency. I am very excited about blockchain. I think blockchain can be revolutionary and will just completely change how a lot of companies will control and manage their information. I’m just not sure that cryptocurrency has the controls in place yet to ensure that it won’t remain a primary tool for money launders.
RR: Looking into the future, where do you see the biggest financial crimes threat?
DL: I think that as we march towards more globalization with financial transactions. Part and parcel of that is the increased opportunity for financial crime because of the challenges of enforcing laws and regulations across international borders. But I still think that the areas that we are seeing problems in today will stay problems tomorrow. We need to remain vigilant in coming up with controls to stop that. I think that we will continue to see problems around the area of cryptocurrencies, with controls around money movement, and the more complex criminals will use technology to outpace law enforcement. However, a lot of white collar and financial crime remains pretty straight forward. It’s people who are in the United States committing relatively simple crimes like insider trading, or theft followed by financial transactions designed to conceal the theft. More sophisticated criminals are taking assets and moving them abroad. Moving them to shell companies and off-shore accounts but a lot of financial crime remains the same as it has been and probably always will be.
RR: Where do you feel you can have the biggest impact in the future?
DL: I think there are thousands of compliance officers across hundreds of financial institutions that are really on the front lines of combating financial crime. Some people don’t realize how important that role is. The banks are the institutions that are seeing all the transactions. They are in the most uniquely qualified position to combat financial crime. I think the next-generation challenge is having the other financial institutions like hedge funds, private equity firms, even merchants doing transactions, understand that they too play a pivotal role in combatting financial crime. Not only does having an effective AML/Bank Secrecy Act (BSA) program keep your institution out of harm’s way with the regulators but it also is the way to give back to society by ensuring that dirty money doesn’t flow through the system. So the challenge that I see is for smaller institutions, not mega-banks, but private equity firms, hedge funds, and merchants and others to take a critical look at their BSA and AML programs and make sure that they know their customers. They know who they are dealing with and they are not allowing any transactions to flow through their company that could be part of financial criminal activity.
RR: Are there any particular projects your working on that you’re excited about that you want to share with us?
DL: I have to say that I wake up excited to go to work in the morning, and I know that there are not a lot of people that can say that. I feel blessed to have stumbled into something I enjoy. We are representing a lot of great companies, for example, that are doing exactly what they should be doing by taking a critical look at their companies and making sure that they are not being used by financial criminals. I am excited to keep growing that and to encourage companies to take that critical look, not just to protect themselves but to do the right thing.
Written by Paul Marrinan & Edited by Alexander Fleiss