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Daniel P. Stipano quoted in American Banker article, “Did banks’ KYC controls fail in Russian efforts to swing election?”

American Banker

Daniel P. Stipano

Daniel P. Stipano was quoted on February 20, 2018 in an American Banker article, “Did banks’ KYC controls fail in Russian efforts to swing election?” which discussed the alleged use of fraudulent financial accounts by Russians, showing another failure by banks to know their customers. The article stated, “The indictments announced Friday in the Russia special counsel's investigation illustrate how banks can be exploited by bad actors, but once again the key questions are: What did banks know, and how could they have stopped it? Russian operatives through an entity called the Internet Research Agency and other affiliated companies used stolen identities to buy social media ads via PayPal, according to media reports and the indictments. A separate indictment named Richard Pinedo, a 28-year-old California computer science major who authorities say sold bank accounts opened in his name — or purchased from people online — for profit. According to reports, that included selling accounts to Russians trying to influence the election. The case casts yet another light on ‘know-your-customer’ regulations, which generally require banks to take steps to validate the true person behind an account in order to detect money-laundering or an account being used to fund illicit criminal activity.”

Stiapno added, “The indictments present ‘a fundamental Know-Your-Customer-type issue.’ Banks are expected and required at the outset of any customer relationship to know the nature and purpose of the account they are opening and they are supposed to collect information so they know who they are doing business with and how the account is being used and I don’t think this is any different.”

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