CRA Forensic Services professionals conducted an independent review of a national retail pharmacy chain’s anti-money laundering (AML) compliance program, with a specific focus on its role as an agent for a money services business (MSB) and its management of various gift cards. Given the company’s status as a publicly traded entity, it faces significant legal and regulatory risks, underscoring the necessity of a robust AML compliance framework to safeguard the value of this niche in the business.
Our comprehensive assessment was designed to rigorously evaluate the effectiveness of the company’s policies, procedures, processes, and controls in ensuring compliance with the Bank Secrecy Act (BSA), as amended by the USA PATRIOT Act.
Key components of our review included:
- AML risk assessment methodology: Analyzing the company’s approach to identifying and mitigating AML risks.
- AML team effectiveness and training program: Assessing the capability and preparedness of the AML team.
- Customer monitoring procedures: Evaluating the systems in place for ongoing customer due diligence.
- Suspicious Activity Reporting (SARs) and Currency Transaction Reports (CTRs): Reviewing the accuracy and timeliness of required filings.
- MSB interdiction processes: Ensuring robust mechanisms for identifying and blocking illicit activities.
- Governance and reporting: Examining the effectiveness of reporting lines to the Board of Directors (BOD) and executive leadership.
- Investigations review: Conducting a probe sample of investigations undertaken by the company’s team.
Our analysis focused on high-risk areas relevant to the industry, including:
- High-volume transactions across multiple locations: The risk of structuring and other illicit activities, particularly if customer activity is not monitored on a consolidated basis.
- Prescription fraud and diversion schemes: These can intersect with money laundering activities, compounding such risks.
- High Intensity Financial Crime Areas (HIFCA): Operating in these areas requires enhanced due diligence and monitoring due to elevated money laundering risks.
Finally, we developed actionable recommendations to enhance the efficacy of the overall AML compliance program. The company leveraged our findings and recommendations to bolster transparency and build stronger trust with its regulators, ultimately fortifying its compliance posture.
The team was led by Kristofer Swanson, Vice President and Forensic Services Practice Leader and Patricia Peláez, Principal. Both are licensed private investigators, holding Permanent Employee Registration Cards issued by the Illinois Department of Financial and Professional Regulation, as required to furnish certain investigative services.
CRA’s Forensic Services Practice assists in the prevention, detection, and correction of a broad range of risks and potential misconduct, reaffirming companies’ commitment to integrity and exemplary corporate governance. Recent assignments at public companies have included investigating and assessing allegations of financial statement irregularities, fraud, FCPA non-compliance, #MeToo issues, theft of trade secrets, ineffectiveness of SOX controls, and cybercrime. Our independent experts advise companies as they navigate complex challenges, helping to ensure robust compliance and effective risk management frameworks.
