Notes on a non-profit indicted for bank fraud
The financial industry understands itself to be an arm of the government. We were inducted into this service other-than-willingly through the ordinary operation of law and regulation. This is uncontroversial and unsurprising to insiders. A claim which will be more surprising: some regulated financial institutions have delegated authority for account- and transaction-level decisioning to a non-profit. Another: that non-profit includes a private intelligence agency, which runs covert assets, publishes intelligence estimates, develops target lists, and communicates them to decisionmakers. Still another: the non-profit organized a coalition of the willing as an outgrowth of its intelligence agency. The willing non-profits, that is. The coalition engaged in a years-long campaign to coerce financial infrastructure and other firms to give them the ability to direct accounts to be closed. The infrastructure built to do this against domestic terrorists was applied to an American politician’s fundraising efforts, and no one seemed to think that was odd. Last week, the DOJ unsealed an indictment against the organizing non-profit for bank fraud. This was based, in part, on how it paid the intelligence agency’s covert assets. They likely developed evidence for that indictment using the Bank Secrecy Act (BSA) mandatory reporting regime. We begin, as always, with the bank fraud. The strategic logic of bank fraud charges in white collar indictments White collar prosecutions are structurally difficult because they frequently depend on intent. It is difficult to prove intent beyond a reasonable doubt, as it frequently depends on subjective mental states which we cannot directly observe. This problem is discussed in the literature including in book-length treatments. There exist ways to…