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▶ 0:19:46the subcommittee on National Security elicit finance and international finan institutions will come to order without objection the chairman is authorized to declare a recess of the committee at any time the hearing is entitled following the money to tools and techniques to combat fraud without objection all members will have five legislative days within which to submit extraneous materials to the chairman for inclusion in the record I now recognize myself for five minutes for an opening statement I want to welcome our Witnesses thank you for participating
▶ 0:20:16in our hearing today um it's devoted to analyzing investment fraud in the United States and reassessing the effectiveness of tools used to combat fraud in our financial system earlier this month the federal earlier this month the Federal Trade Commission reported that us consumers lost $5.7 billion to investment scams in 2024 criminals are increasingly finding ways to bypass us Financial regulations in order to scam Americans into draining their life savings
▶ 0:20:46for the sake of the criminals illicit gain this type of organized fraud transcends both state lines and political divides these scammers pray on everyday Americans often our most vulnerable senior citizens the United States is supposed to have the world's most capable Financial intelligence capabilities uh we are focused in this committee on National Security issues we also need to use these resources and capabilities we have more effectively to protect our own citizens safety and soundness are essential to preserving
▶ 0:21:17our own Financial well-being beyond our own population America's capital markets are home to more than half of the world's invested capital and the US dollar is the world's Reserve currency since its enactment in 1970 the bank secrecy act has served as the Cornerstone for us an money laundering care terrorism uh financing and know your customer compliance measures for us financial institutions the bank secrecy acts regulatory framework is intended to defend and secure
▶ 0:21:47our financial system from crime however considering the everchanging landscape of technology and financial crime we must continually assess the effectiveness of the tools and techniques traditionally used to secure the financial system today we'll take time to learn more about investment fraud and how financial institutions including blockchain analytics firms contribute to combating this P pervasive issue investment fraud uh as as these losses grow in United States it's important to
▶ 0:22:17consider changes that can be made to enhance uh the effectiveness of our reporting suspicious activity reports or SARS and currency transaction reports ttrs are tools used by financial institutions to flag transactions um over certain monetary value that could be related to elicit activities these reports are filed by financial institutions and maintained by finsen the financial crimes enforcement Network and used by law enforcement agencies over the course of their investigations a sar
▶ 0:22:47is filed when a financial institution uh has a transaction over $5,000 and a CTR is filed on cash transactions involving more than $10,000 based on uh CPI inflation $10,000 in 1970 would be more than $81,000 today these numbers uh in the reporting requirements have never been adjusted for inflation so the reporting burden keeps growing with no obvious Improvement on the effectiveness of the reports
▶ 0:23:18finson estimated that an average total of 12,600 SARS in 57,000 ctrs were filed each day this is 2020 three data according to uh a December 2024 uh GAO Report law enforcement agencies accessed only 5.4% of those ctrs filed between 2014 and 2013 or 20123 so you got a 10-year period there with data
▶ 0:23:48and only 5.4% that's not very efficient was long overdue for Congress to consider uh these clearly outdated thresholds and Frameworks uh so that we can protect protect our people and our financial institutions uh even as we update old laws it's important to consider other updates thankfully the Trump Administration has muted the disastrous and unconstitutional corporate transparency act requiring businesses uh to report The Beneficial ownership to finson presumably
▶ 0:24:19um by the laws framework operating a business or even a homeowners association means you're engaged in elicit Finance uh but our constitution says that when the government wants to know private information they need probable cause at least Reasonable Suspicion to get a warrant or a subena surely we can minimize the financial harm suffered by Americans exploited by scammers without infringing on their civil liberties or adding ways to make ordinary citizens criminals as we consider legislative solutions
▶ 0:24:49to maximize the effectiveness of our financial intelligence architecture I'm hopeful that we will increase uh and improve Nationwide education on investment cams uh and we will I'm also hopeful that we'll equip law enforcement agencies with better tools to go after criminals uh that are continually operating unseen I look forward to the insights gained on these issues from today's hearing and I yield back chairman now recognizes the ranking member of the committee Miss batty for four minutes for an opening
▶ 0:25:20statement thank you Mr chairman and ranking uh member uh good morning and thank you to our Witnesses who are here today today and for holding this hearing uh I want to um make sure that we understand today that we really need to have this discussion to combat financial fraud and it is no secret we've heard comments from our chair that fraud schemes are on the rise and the Bad actors are now finding new and creative ways to defraud
▶ 0:25:50consumers for example the F Federal Trade Commission data showed us that in 2024 American consumers lost more than 12.5 million uh billion dollars to fraud a 25% increase from the previous year our constituents in red and blue districts alike are being robbed of their hard-earned savings and I'm eager to work with my Republican colleagues to develop sharper tools to
▶ 0:26:20deter fraud folks and protect American consumers starting with today's hearing although I appreciate the bipartisan approach to tackling this matter we cannot ignore the STK contradictions between the gold of today's hearing and the Trump's Administration rollback of key financial crime measures that would help us detect and deter fraud the president along with Elon Musk Department of government
▶ 0:26:50efficiency is trying to unlawfully eliminate the Consumer Financial Protection Bureau the agency as you know that's responsible for protecting Americans from Fraud and Abuse the president announced that the United States will no longer enforce Foreign Corrupt policy Practices Act the Foreign Corrupt Practices Act which prohibits Americans from bribing foreign officials and the treasury secretary
▶ 0:27:21Scott bent unilaterally announced that the department will not be enforcing the by partisan corporate transparency act which president Trump signed into law during his first term against us persons exempting over 99% of the companies Congress intended the law to cover gutting the CTA elim eliminates a critical tool for law enforcement to detect and deter fraud
▶ 0:27:51cases that involve Anonymous shell companies effectively making the United States a Haven for money launderers traffickers and frauders let me just give you an example in 2022 six individuals were charged with scamming over 20,000 victims by tricking them into paying for tech repair services victims paid more than $10 million I'm GNA say that again victims paid more than 10
▶ 0:28:22million doll to bank accounts tied to a network of shell companies while I join uh my colleagues on the other side in calling out the need for key beneficial ownership reforms the administration repeatedly chooses to gut the law entirely instead of working in a bipartisan manner to ease small business compliance B burdens in just two months president Trump has made it easier for financial
▶ 0:28:52fraud to devastate hardworking families particularly older adults by unlawfully dismantling the pillars of our financial crime regulatory regime while I again appreciate this hearing I hope to discuss I hope the discussion only underscores the vital significance of this regime and the need to preserve it if we were truly truly to prevent fraud and protect our constituents and once again to our Witnesses
▶ 0:29:23I hope that you can shed some light on this and I you back I than the gentlewoman uh I now recognize the ranking member of the full committee Miss waters for one minute thank you chairman Davidson and ranking member batty for convening this hearing on fraud us fraud losses were estimated at nearly 13 billion in 2023 but many think the actual amount is much higher especially
▶ 0:29:53for the 100 million Americans over age 50 fraud is a serious threat to their Secure Retirement and well-being Congress must take Financial crime seriously it must stand up for the tools it enacted like the bank secrecy act and corporate transy act to detect fraud and hold Fosters accountable Congress must stand up for the bank examiners investigators prosecutors
▶ 0:30:24agencies and consumers that are under attack by the Trump regime and his billionaire cabinet and we must end Trump's own schemes to defraud the American public using its Mimi coin and stable coin I thank you and I Y back thank the ranking member uh today we welcome the testimony of U Mr Darren mclin he's the Executive Vice President and chief BSA AML and sanctions officer for Flagstar
▶ 0:30:54Bank in Michigan and he's testifying on behalf of the American Bankers Association Miss Jacqueline Burns koven uh is the head of cyber threat intelligence at chain alysis Mr Jeff bravent is the vice president for federal government relations at the national Federation of Independent businesses and Miss Kathy Stokes is the director of fraud prevention for the AARP we thank each of you for taking time to be here each of you will be recognized for 5 minutes to give an oral
▶ 0:31:24presentation of your testimony without objection your written statements will be made part of the record Mr mclin you are now recognized for 5 minutes for your oral statement thank you sir and thank you chairman Davidson ranking member batty ranking member Waters and members of the subcommittee thank you for the opportunity to testify um my name is Darren mclocklin and I am the EVP and chief BSA Amo officer for Flagstar base based in New York uh I am
▶ 0:31:54testifying today on behalf of the American Bakers these views are my own and do not necessarily reflect the views of my employer criminal Enterprises are targeting all Americans one in three adults have experienced a financial fraud or a scam in just the last 12 months while nearly two in five have experienced a financial loss Bad actors have leveraged cuttingedge technology social media and Telecommunications to Target
▶ 0:32:24American life savings through increasing increasingly sophisticated techniques Bad actors make false promises of huge financial Returns on F fictitious investment opportunities I represent the thousands of talented BSA and anti frud professionals across the country have dedicated their entire careers to protecting their customers and the US Financial system but our customers are still under attack to succeed we need a more
▶ 0:32:55strategic approach that includes the government the banking industry and other Industries across the uh economy it is critical that the banking industry receives transparent and actional actionable feedback from the government and important regulatory reforms to let us focus on the real threats I would like to emphasize three things today first banks are doing important work to combat fraud including leveraging technology continuously
▶ 0:33:25improving anti-fraud operations and investing in customer anti-fraud education but a whole of government approach is needed financial institutions across the country have implemented rigorous risk-based AML compliance and anti-fraud programs that alert us to signs customers have started to send money in unfortunately these customers sometimes fall victims to those overseas characters
▶ 0:33:55we can share heartbreaking stories across the industry about in innocent customers who have lost their lifetime savings to investment schames as hard as we try sometimes we cannot convince our customers that they are the victim of a scam in progress although we file suspicious activity reports with treasuries financial crimes enforcement Network by the time law enforcement receives the report it is often too late a major part of this threat comes from overseas and these Bad actors are using new generative
▶ 0:34:26AI tools to increase increase the sophistication and effectiveness of their Outreach there must be a better approach to tackling this grave problem greater involvement by and coordination with the government is essential second Banks need timely actionable and feedback from actionable data and feedback from the government on priority threats the federal government has a database bursting with threat information which should be shared with the private
▶ 0:34:56sector although thousands of SARS are filed they may not actually reflect criminal or other illicit acts it would help Banks to see analysis of these reports and other information that government may have about this elicit activity finally we mean meaningful reform in the B we need meaningful reforms in the BSA rules including creating a true risk-based approach to BSA AML compliance provide transparent government
▶ 0:35:26feedback to Banks regarding ing priority threats reform of outdated currency transaction reporting streamline and update the suspicious activity and other reporting forms that we must complete and increase collaboration between Bank regulators and the banks in conclusion banks are working hard to combat fraud but it is clear our customers are still under attack to fight back and succeed we need a whole of government approach that includes
▶ 0:35:56greater transparen Arcy and actionable feedback from the government we need other sectors to do their part and we need important regulatory reforms to let us focus on the real threats chairman Davis ranking member batty and ranking member Waters and members of the subcommittee we are grateful for your leadership in holding this hearing to highlight the extraordinary and growing financial fraud problem that is plaguing our country we look forward to working with you and your colleagues to explore what Congress the regulatory
▶ 0:36:27agent and the federal government can do to help thank you once again for the opportunity to testify and I look forward to answering your questions thank you Mr mclin Miss Burns Coen you are now recognized for five minutes for your oral statement chairman Davidson ranking member batty ranking member Waters and distinguished members of the subcommittee thank you for inviting me to testify before you today on the pre pressing issue of fraud targeting Americans my name is Jacqueline Burns koven and I'm the head of cyber threat intelligence for the blockchain
▶ 0:36:57data platform to analysis where we help make blockchain safer and more secure so that financial institutions businesses and governments can engage cryptocurrency with confidence leveraging the blockchain's inherent transparency we track cryptocurrency activity by elicit actors such as those engaged in scams and provide data on their financial activity to private and public sector customers today's hearing shines an important Spotlight on scams facing the American people as a matter of National Security most notably so-called Pig butchering
▶ 0:37:28scams also referred to as investment or confidence scams that Target and build relationships with individuals convincing them to invest in fraudulent opportunities scam syndicates are well resourced according to chanys data for each of the past four years scam operators received over 10 billion dollar in cryptocurrency payments with 2024 estimated as a record year it has never been easier for scammers to access tools to make the con more convincing and scalable the peer-to-peer Market Marketplace hwan
▶ 0:37:58guarantee for example has become a One-Stop shop for the scam supply chain as we highlighted in our annual crypto crime report hue1 has processed more than $70 billion dollar in crypto transactions and its infrastructure facilitates laundering Services as well as the sale of contct information for outreach to potential scam Victims web hosting Services social media accounts and AI software fraudsters can always be counted on to abuse novel Technologies for their aims but the utilization of crypto CTO currency should
▶ 0:38:28fundamentally Place scammers at a disadvantage cryptocurrency transactions are inherently public and the data from those transactions is preserved on a transparent immutable Ledger in fact stable coins in particular are freezable Midstream which has led to spectacular seizures of scammed funds blockchain intelligence provides insight into the entire scam supply chain laundering patterns and even the scale at a level unparalleled in traditional Finance indeed a single cryptocurrency payment to a scam can
▶ 0:38:59often lead to identifying hundreds of other victim payments of a multi-million dollar fraud scheme allowing for a more effective disruption and restitution efforts rather than just one-off criminal investigations however the current reality is that scammers are exploiting the siloed nature of how the public and private sector identify and respond to these schemes scammer syndicates are organized and agile and they are capitalizing on our visibility gaps today scam victims have multiple
▶ 0:39:29State local and federal agencies they can report to yet there's no easy mechanism for these agencies to share with each other let alone with the private sector best positioned to prevent additional victims in financial institutions reporting on scams have no visibility into the scams reported by their peers leaving them unable to protect their customers from scams known to the government or to the financial institution next door at the same time private sector entities outside of financial institution on the front line of scams lack the structures
▶ 0:39:59to comprehensively share and receive information from public sector about scam activity that would allow them to take more proactive measures it is essential to modernize and streamline bidirectional scam reporting and response between public and private sectors to facilitate restitution and the prevention of additional victims furthermore too often scam victims are turned away from local authorities who are IL equipped to properly assist crypto cases we must ensure law enforcement's access to blockchain analysis and training and invest
▶ 0:40:29in Tech driven efficiency to swiftly action intelligence and seize funds over the past 10 years CH analysis has supported hundreds of cases involving the freezing of Assets in partnership with government agencies worldwide helping to secure at least 12.6 billion doar worth of illicit crypto it is imperative that we develop strategies to prevent Americans from falling pre to scams altogether genalysis acquired alteria which utilizes artificial intelligence to identify by early stage scam activities enabling
▶ 0:40:59financial institutions large scale Upstream detection we further support a regulatory framework that clearly delineates responsibility for oversight of businesses offering stable coins and trading Services finally we need to close gaps in AML CFT standards implementation and in the absence of cooperation more pressure is needed to disrupt Financial networks defying laws and Regulatory Norms thank you again for the opportunity to provide testimony on this important topic I'm encouraged by the subcommittee's interest and to that end
▶ 0:41:30we invite congress's continued engagement on this topic to combat scams and better prect Americans I look forward to your questions thank you for that um Mr braan you are now recognized for five minutes for your oral statement chairman Davidson ranking member batty ranking member Waters uh and the members of the House committee on Financial Services thank you for allowing me to testify before the committee today my name is Jeff Brent and I am the vice president of federal government relations for the national Federation of Independent Business nfib is
▶ 0:42:00the voice of small business and Washington DC all 50 state capitals in the nation's courts we represent about 300,000 small business owners with the average nfib member employing about seven to eight people data privacy is a significant concern for small business owners a prime example of this is the corporate transparency act under the CTA small businesses with fewer than 20 employees and 5 million in Revenue are required to report their beneficial ownership information to the financial crimes
▶ 0:42:31Network this includes a scan copi of a driver's license or passport of every beneficial owner federal state local and international law enforcement and intelligence agencies can access this information without a subpoena or warrant small businesses fear their information will be targeted by criminals politically motivated individuals or subject to cyber attacks by our nation's adversaries that could expose their personal information to actual criminals and nefarious actors some small businesses
▶ 0:43:01have fallen victim to companies which may be scam operators offering to file Boi data a recent search of CTA Boi filing on Google demonstrates this problem three sponsored Boi companies appear before the official finsen result one of these companies in particular b.org even uses an imitation government seal with an eagle on it to appear like an official seal the US government would use recently
▶ 0:43:31an Indiana farmer contacted nfib regarding one of these scam companies this farmer had begun the process to file through a scam company but did not complete the filing still this farmer had $249 charged to his credit card now the farmer is searching for a refund but likely won't get one small businesses overwhelmingly oppose the CTA thankfully president Trump recognized the absur abity of beneficial ownership information reporting requirements he called the law invasive
▶ 0:44:02outrageous and an economic Menace he could not be more right the ultimate irony is that a law that supporters claim is for National Security has likely open the US economy American citizens and small business owners to more data and privacy risk the federal database will be breached it will be hacked and private information leak this is why Congress and treasury must immediately and permanently delete the records of the millions of
▶ 0:44:32us small business owners who already filed their Boi with finen this is non-negotiable it has to be destroyed let me be clear the CTA is unconstitutional and should be overturned by the courts absent intervention from the courts Congress can clean this mess up by passing chairman Davidson's repealing big brother over reject this legislation would repeal the CTA so a future Administration couldn't not revive or expand the statute Congress could also exempt law-abiding us small businesses from the CTA
▶ 0:45:03as the Trump Administration has proposed before I close I would like to draw attention to the issue of Ip and identity theft by fraudulent as well as legitimate Chinese businesses such as teimo nfib members have shared stories of how their popular American-made products are being stolen and ripped off by Chinese companies one of the more egregious examples is of the Illinois based and americanmade power planter power PL is a garden augur manufacturer that works in standard cordless drills this small business has been the target of non-stop
▶ 0:45:34IP and identity theft by Chinese scammer companies these companies will copy and pl paste power Planters copywritten images verbiage and advertising imagery including their made in America claim and sell from China at a lower cost the Chinese product is of inferior quality and when it breaks consumers don't even realize it is from China and often complain directly to power planter even leaving negative comments on their social media Pages power planter has dedicated significant resources to trying to stop these scammers but it's a full-time job
▶ 0:46:05in fact this small business has been forced to retain Council whose job is to track ripoff companies on sites like Amazon Alibaba and eBay and report them to the appropriate company for removal there have been instances where power planter Council has removed several thousand such imposters in a single month the process of getting the scam company taken down often takes several attempts and even then there's often a remedial process where they allowed where they allowed to begin selling again or another company pops right back up and is an endless
▶ 0:46:35game of whacka Mall these fraudulent companies are taking money out of the pockets of American businesses and workers thank you for the opportunity to discuss the impact of scams and fraud on small business and I look forward to your questions thank you Mr bran u m Stokes you're now recognized for five minutes for your oral statement thank you and good morning my name is Kathy Stokes and I'm the director of fraud prevention programs for a ARP thanks for inviting me to testify on behalf of ARP at this important hearing this morning I'm going to shed light on the true
▶ 0:47:05impact of fraud its potential to victimize anyone and its significant threat to National Security through the fraud watch Network AARP educates older adults on the risk that fraud poses to their Financial Security meeting them where they are we have hundreds of volunteers that work with our State offices and community ities all over the country to help older Americans avoid fraud we share information online through newsletters and a podcast and we cover
▶ 0:47:35fraud in most editions of our Publications that tens of millions of Americans receive our victim support program including a helpline receiving 500 calls daily and support groups that address Fraud's emotional impact helps people like Dave who lost family and friends and contemplated suicide after having his home and his his business stolen from him through a romance scam the recent growth in fraud has been meteoric but the FTC
▶ 0:48:06estimates Under reporting suggesting real fraud losses 2023 were not the reported 10.4 billion billion and criminals do not discriminate on who they target but when older adults are victimize the financial impact can be catastrophic these people are financially ruined they experience emotional and health impacts
▶ 0:48:36often their families are torn apart and many once financially secure Americans who did the right thing and saved for a comfortable retirement are left to rely on government safety nets in my written testimony I describe how the sophistication and scale of today's transnational crime rings have led to them becoming a national security threat these Enterprises leverage a vast array of tools to commit their crimes including all methods of communication in forms of payment
▶ 0:49:07complex impersonation schemes Anonymous shell companies human trafficking and more take the halisco new generation cartel in Mexico it's using scams to fund things like sending meth and Fentanyl across our Southern border or take the massive explosion of financial grooming schemes the origins of which are Chinese organized crime in Southeast Asia their goal to the US economy the reason scams succeed Beyond sophistication
▶ 0:49:37and scale relies on how our brains work criminals know that they can force our brains to bypass logic by getting targets into a heightened emotional state criminals call it getting targets Under The Ether and academics have shed light on the actual science behind it Linda a Prof Professor uh shared her story with a about the day her life was turned upside down when a tech support scam that started with a fear inducing computer popup message led to
▶ 0:50:07a 4 and a half month nightmare that forced her retirement and saw her buying gold bars and putting them into a stranger's car when she realized the crime she said it was like the walls of her house blew down now there's no single solution to the Frog crisis it will take a whole of society approach for individual ual it's things like um better protecting ourselves freezing our credit using password managers multiactor authentication for educators it's focusing on the red flags that are important
▶ 0:50:37but so is training on how most scams come at us and what to do when they do for industry financial institutions must continue to innovate on fraud mitigation tech companies must build Safety and Security into product design and Manufacturing Telos must find a way for stopping the scams over the networks from reaching Americans and Industry and law enforcement must work together AARP is a founder of a new public private partnership called the national Elder fraud coordination Center
▶ 0:51:08and we will enhance the ability for Private Industry and the public uh space to work together to begin to solve Elder fraud crimes at AARP we are looking forward to working with policy makers to address fraud by supporting resources for state and local law enforcement to hire and train staff and secure tool tools that combat the fraud crimes improved fraud reporting system so law enforcement can prioritize cases reinstating the casualty and theft loss deduction to address address uh address the
▶ 0:51:38taxation of stolen assets legislation to damage uh limit the damage of crypto ATMs and supporting the national Elder fraud coordination Center you can learn more about that at fight Elder fraud.org thank you thank you I really appreciate all of our Witnesses we learned the lot just from your opening statements and wow what a challenge uh we'll now turn to member questions uh I now recognize myself for five minutes for questioning Mr mclin based
▶ 0:52:08on your 27 years of experience um have you seen an expansion of the efforts to stop fraud thank you for your question chairman uh over 27 years yes there's been a huge huge emphasis on protecting our customers um in the industry uh we have tackled this via uh enhancing our education programs via working uh workshops in our branches um educational material
▶ 0:52:39posted on our websites so your own efforts in the industry but also you've seen more uh regulatory pressure to disclose uh and Report correct correct yes we the the increase the increased uh significance or pressure placed on financial institutions to identify and report suspicious activity and fraud has grown over the course of the last 207 so as as the as the as the uh number of fraud cases and the size and scope of the fraud uh also
▶ 0:53:10increased yes sir yeah so in a way it's like well in spite of our effort we haven't really stopped it we haven't necessarily shrunk it either and some would say well gosh imagine how bad it would be if we hadn't been doing these things but on the other hand um maybe the way we're going about it isn't working so could you highlight what you think works and what maybe could be done more effectively from your experience thank you again um I from my experience what has been working is the increased investment
▶ 0:53:40within the within the the public sector on education on Advanced Technologies to catch the fraud at the front door as we call it before they're able to transact with the institutions also advancements in the models and scenarios for which we monitor customer Behavior Uh once that account is established um what we could be doing better I would say is establishing that that relationship that public private um relationship where there's a
▶ 0:54:10flow of information back and forth between the government and the the regulated financial institutions that I represent um the the government sits on a mountain of data um from the hundreds of thousands of SARS that are filed and ctrs that are filed as well as the prosecutions that law enforcement do they normally get back to you I mean here's a here's a case working on weaponization committee last Congress um One Bank was asked by the FBI to report on
▶ 0:54:40their customers and the bank said we need a warrant or subpoena then the FBI came back and said well why don't you generate a suspicious activity report where none had previously existed is that kind of interaction with law normal yes uh finan the financial services and finan institutions that I've had the honor of working for do have good relationships with uh law enforcement however to protect the laws and the regulations that the financial institutions uh fall under we do often after conversations with law enforcement
▶ 0:55:10request the subpoena uh to turn over information now um it's unusual to receive that type of conversation where a sar wasn't filed but usually once the SAR is filed Outreach begins and and conversations and flow of data starts happening well thank you for that and I look forward to working with with you all and colleagues to make our our system more effective and I just want to highlight you know Mr Brent uh I appreciate your testimony because not only are individuals being scammed but businesses are and especially
▶ 0:55:40small businesses um you referenced a bill the repealing Big Brother overreach act it's got 133 house co-sponsors and identical legislation sponsored by senator teville in the Senate um you know in in the change that you referenced that uh the Trump administration's done by focusing uh beneficial ownership reporting requirements on forn entities is that an improvement for American citizens I think absolutely an improvement for American citizens an improvement for American
▶ 0:56:11small businesses when you're looking at 32.6 million reports finam is expecting in year one that is not a risk based approach that is a needle and a Hy stack approach and when you refine it down to a smaller U more risk based approach it should be a win yeah I appreciate you also referencing uh what we need to do with the existing data so thank you for that and look um you Mr Stokes I really appreciate your emphasis on seniors and the great work you've done to educate seniors uh working with our County Prosecutors do you have a way to
▶ 0:56:41roll that to toolkit out uh through member offices so we make sure that our County Prosecutors are on the front lines they often feel unsupported by federal resources so in your experience you know what you're seeing are these like lone actors trying to scam people or is it sort of an organized crime effort that's hitting you know individuals and businesses thank you for that question representative you know uh for a long time we've all held this assumption that the uh the fraudster is some guy in his mom's basement making phone calls and lurking on
▶ 0:57:11social media and I'm sure those guys are still out there but they're not the ones that are causing the majority of the problem this is trans you I wish I had longer but I my time has expired and I hope you can respond in writing sorry I didn't leave you enough time there uh my time is expired and I now recognize the ranking member of the subcommittee Miss batty for 5 minutes for questions thank you Mr chairman um I'll continue with Miss stes uh I think we all touched on this earlier but I I'd like to go a little uh deeper into it the bipartisan
▶ 0:57:42corporate transparency act as you know was created to prevent Bad actors from hiding behind Anonymous shell companies and can you clearly lay out for us how this relates to fraud prevention and how the CT in the beneficial ownership database would be a critical fraud prevention uh tool thank you representative batty for that question I think that um you know I have a lot of uh opportunity to interact with law enforcement Financial crimes
▶ 0:58:12investigators and I understand from them how critical information is um that will help them get to the bottom of the cases uh and anything that takes away from that would would be a challenge and you know the tools that criminals use are vast they you know complex impersonation schemes and fed fake websites shell companies um human trafficking there's so many crimes within this crime okay maybe you can um answer
▶ 0:58:42this as a followup can you address how treasury's recent decision to exempt more than 99% of the companies that Congress intended to cover uh will weaken uh our fraud efforts thank you representative I can say that anything that is going to reduce information that can be actionable by law enforcement from our perspective when it comes to fraud that is um you know it's a crisis is very problematic
▶ 0:59:13okay uh Mr mcclaflin let me ask you uh this uh it's been mentioned several times already this morning that fraud is rapidly on the rise from you from uh my colleagues uh each year American consumers as we know are reporting significantly greater Financial losses uh to scams and we clearly need to take I believe a whole of government approach to tackling this problem and I understand that there are several
▶ 0:59:43federal and state and local organizations that play various roles in addressing fraud and but there is currently no one central location uh for fraud victims to seek help can you you shed some light on or explain the current disjointed framework uh and any suggestions you would have for us in Congress that we can instate a streamlined userfriendly uh process for fraud victims to report these crimes to U thank you for
▶ 1:00:13your question ranking member um So currently in in the industry we work with several you know non for-profits that focus on this including ARP and other uh well EST estblished uh fraud anti frud groups um at the local and state and federal law enforcement level um we also interact um because we all believe that this is something that's growing that we need to tackle so there are working groups that are established there are uh conferences
▶ 1:00:43that are held where the idea sharing occurs um there's also a a greater need for transparency in the actual anti-fraud movement um when when financial institutions in the public sector file suspicious activity reports or um uh file with the Adult Protective Services when it when it comes to Elder uh exploitation there was very little time to we get feedback on the information that we provided
▶ 1:01:13to see if it was actionable for for those agencies so the the sharing of knowledge back and forth would allow us to actually Target specific threats to to the our our customers and our population so centralizing a a fraud group within a law enforcement or a regulatory agency would give our customers a a central point of contact but also allow the financial institutions
▶ 1:01:43as well to have a central point of contact to continuously build upon the programs that we have okay uh I might have enough time for either one of you uh to give us any insight on how fraud rers are using social media platforms to lure victims in Miss Stokes Mr M anything on that thank you for that question yes social media is one of the biggest vectors for fraud um and we see so much harm coming from them yet
▶ 1:02:13we don't see a concerted effort to take down the um social media profiles that are there and are known to be related to scams and a lot more needs to be done um by that industry to my time is how much up yes or no is that something that Congress should be looking into you believe yes okay thank you thank you uh the gentleman from Oklahoma uh also the chairman of the task force on monetary policy Mr Lucas is now recognized
▶ 1:02:44for five minutes thank you for holding this hearing Mr chairman and thank you to our Witnesses for today in my regular meetings with Bankers across my home state the issue fraud is one that often comes up they're on the ground they're seeing the people in their Community being taken advantage of it's unfortunate then that often times federal agencies Place reporting burdens on our financial institutions rather than trying to get it through to the problem Mr mclin how does it affect
▶ 1:03:14your communities our communities I should say when our credit providers have to spend all their time complying with uh what some might Define as burdensome reporing so we we have finite resources available to us within the the the public uh financial institution sector so when when increased burden is placed on us we have to make certain risk-based decisions as to where to deploy those resources uh where to spend money on our investments in technology
▶ 1:03:44and and other uh operational uh efficiencies that we can Garner to continuously focus on the mission of catching as many bad guys as we possibly can um so when when we get more B more burden in terms of more checkbox exercises um that just means we have to expend more resources to tackle the job if I could follow up on that question often times our credit providers are the first to notice when something goes wrong and I recently met with Bankers
▶ 1:04:14again in my district that told me countless stories of how they were able to identify fraudin activities and protect their customers Bankers are allies in detecting fraud but but they're not responsible for enforcing the law and they shouldn't be asked to do so by the federal government so Mr ml could you expand on how could we support our financial institutions that are targeted by these crimes um I'm going to go back to you and thank you for your question I'm going to go back to the the transparency
▶ 1:04:45between local state federal law enforcement Regulatory Agencies and um finsen um the access to data um and allowing the the smart individuals that we have working for us and data scientists across all all sectors allowing us to analyze the data to focus on the threat at hand instead of having us focus on check the box exercises that many financial institutions face today would be a huge step forward turning to you
▶ 1:05:15Mr ravent I've heard again from a number of my small businesses across Oklahoma that are worried about the increased administrative burden that many reporting requirements place on them small businesses by definition have fewer resources to devote to these lengthy and elaborate reporting regimes can you talk about the harms of overly broad reporting mechanisms how to do rule makings like the previous administration's rule on beneficial ownership actually hurt our efforts to stop fraud
▶ 1:05:45yeah when something's overly broad it it's extremely challenging for example you have the substantial control prong in the definition which is essentially defined as substantial control the the previous administration to finded so broadly to be senior staff so if you're a uh restaurant manager uh and you have no ownership stake you probably have substantial control one of the challenges in when you're a small business owner is well what senior staff do I have to put in finsen doesn't clearly Define this so you're worried about going to jail for T
▶ 1:06:15years because you might not have put enough senior staffers in and it's it's a real Challenge and then you have to ask yourself how pertinent is this information that's being reported uh that has sometimes just staff out there with no ownership control at all Miss Burns koven you've worked in this industry from various Vantage points and have seen the es and flows of the financial crime operators what trends are you seeing today in financial fraud and how can we perhaps try to get ahead of this industry
▶ 1:06:46so to speak thank you for that question I think we've seen broadly that elicit actors of all Stripes whether that be fraudsters drug traffickers are using jurisdictions with weak AML CFT standards they're looking for those Paths of lease resistance so enclosing those gaps in capacity building or even applying pressures to jurisdictions willingly being blind to the use of their platforms for laundering we can better uh identify and prevent these elicit
▶ 1:07:16actors from reaping the rewards of their activities Mr chairman let me simply say in closing consumers are feeling it financial institutions are feeling frauds ERS do not discriminate when it comes to who they steal from and we need to focus on that problem and give our law enforcement tools what it needs to stop these criminals rather than just more paperwork thank you Mr chairman you back I thank the gentleman uh the general woman from California also the ranking member of the full committee Miss Waters is
▶ 1:07:46now recognized for five minutes uh thank you very much chair Mr chairman and members I'm about to ask the question um about a particular situation in this country uh that is hardly believable but I'm pleased that we're here talking about follow the money tools and techniques to combat fraud here's some money I want us to follow Miss Stokes days before Donald Trump
▶ 1:08:16took office he introduced to meme coin dedicated of course to himself while the entities behind his Trump coin earned nearly $100 million in trading fees in less than two weeks hundreds of thousands of small Traders suffered $2 billion in losses over the same time frame days after he released his coin Melania Trump issued
▶ 1:08:46her own coin the many concerns about this aren't only that the Trump family profits of how this venture has become the biggest component of the president's personal wealth more than even the real estate for which he's known it raises questions about the use of cryptocurrency including meme coins to entice to fleece to defraud people out of their hard-earned savings further
▶ 1:09:17at the same time that Donald Trump is offering his meme coin and other cryptocurrency products to enrich himself his regime is considering the rules that will Define how cryptocurrency is regulated they're in charge it also comes at a time when Trump and Republicans are working hard to low even to remove barriers to fraud and financial crime as an expert
▶ 1:09:47in fraud prevention how do criminals use cryptocurrency to commit fraud especially that which targets older Americans why is cryptocurrency so attractive to the bad guys and how do the perpetrators such as transnational criminal organizations make crypto appealing to the victim and by the way not only is the president created this coin Mimi coin he's also uh
▶ 1:10:17involved with the company on stable coins because we're negotiating stable coins right now in the middle of our negotiations he's creating his own company on stable coin what's going on well thank you for that question representative Waters um I do know that when cryptocurrency is in the news the criminals follow so this does create tremendous opportunity because um general you know everyday Americans
▶ 1:10:47don't really understand what crypto is they don't understand that its value is simply based on supply and demand so the Investments can seem really attractive we're seeing two ways that crypto is showing up in the fraud space one is crypto investment schemes where people are uh being having everything stolen from them that is the goal of the criminals to steal every peny from every victim and the other is the use of crypto hm machines you probably see 12,000 of them
▶ 1:11:18around the country they're in Vape uh Vape businesses and grocery stores and uh these uh the criminals are convincing the victim of an urgent matter that they have to address and they have to go to the bank they take out wads of cash and then they walk over to these crypto ATM machines and they put $100 at a time into these machines taking sometimes hours which is risking and of itself um and then they send the money to who they think is going to help them and it goes into the wallet of a
▶ 1:11:48criminal wow well thank you let me move on we know that Anonymous shell companies are common tool used by frosters to facilitate their crimes and to launder the proceeds of their bad act for example two Chinese Nationals were arrested for allegedly leading a scheme to launder 73 million in proceeds from cryptocurrency investment scams the victims transferred millions of dollars to US bank accounts open in the names of over 70 US shell companies whose
▶ 1:12:18apparent purpose was to launder the proceeds of the fraud similarly the leader of a large scale time share resale scam was sentenced to prison for defrauding more than 1,000 victims many of them elderly out of their Millions using a network of fake front companies in cities across the country this examples abound and I would like to submit for the record a fact sheet from the Transparency International us that describes how these corporate entities registered
▶ 1:12:49in the United States or abused for uh a range of fraudulent purposes the Trump regime with the help of my colleagues across the aisle are trying to make such fraud schemes Easier by gutting the corporate transaction transparency act which helps the government Mass who truly owns controls these shell companies enough enough enough and I know without objection I'll I'll accept the gentlewoman's uh submission without objection the gentleman from Texas
▶ 1:13:19Mr sessions is now recognized for five minutes Mr chairman thank you very much uh before we go too far I want to a knowledge the gentleman uh The Honorable Jack Fields former member of our Texas delegation who is the ranking member of Energy and Commerce when he retired in 1996 is with us today and Mr Fields I want to thank you uh you've been a guardian of moving America forward for a long time and I think as you watch what's going on and half since you've left you've seen where
▶ 1:13:49the things that got developed also have a downside to them and underbelly that we're speaking today uh I want to uh if I can go to anybody in the panel I I've heard I've I've read the testimony and also the things which we have prepared Mr Davidson's great staff about the overview and increasingly what comes out today is we have a problem and I think we have seen and heard this uh what
▶ 1:14:19has federal law enforcement done to mirror up to try and stop this I know there are working groups we heard there's a national Elder fraud a task force you're trying to gather together as an industry who is what agency is the lead that you would anybody I I'll take a First Step at that and thank you for your question
▶ 1:14:50sir um from a financial institution standpoint we would inter interact with local or federal agencies within the state that were we found the fraud can you name that so in other words I know that the the SEC or Fen has jurisdiction over looking at transactions and data and information when you had something that you consider to be a crime who do you look for who is the agency
▶ 1:15:20again thank you for your question it depends on the the fraud that we're seeing so if we're seeing check or or financial fraud um we would contact the Secret Service in some cases because they sit within the Department of Treasury and and have that exposure uh we're talking elder abuse Financial exploitation uh we would we would reach out to uh APS Andor the FBI or within the the city or state that uh the crimes taken place have we as
▶ 1:15:51members of Congress through the law made it clear to not just consumers but really the industry about who have we streamlined that do you know who to go to in a given circumstance thank you for the question I think more can be done to streamline reporting and modernize it so that we can connect the dots from a one-off investigation to understanding that entire scheme so that we can actually increase recovery
▶ 1:16:21and restitution and make more victims whole um we've had spectacular seizures by US government of cryptocurrency assets which analysis has worked with governments around the world seizing over 12.6 billion dollar with elicit crypto but more needs to be done to upskill and train at the state and local level to ensure those uh departments that are the first line of response often time for victims are well equipped to understand and act quickly to uh pursue these cases and seize
▶ 1:16:51those funds well I'm well aware that many US attor and other agencies within law enforcement want to look at minimums it's not big enough for them until it gets to a certain stature and I I've heard testimony which I believe is true unless you go and plug a circumstance and challenge someone they're going to continue these things and I I think that it's important that what the chairman is doing here that we do
▶ 1:17:21pass this piece of legislation that I got on yesterday but we also have to have the that translate to the Department of Justice to law enforcement that actually we honor them and and ask them to please understand more about this I think as they look at the crime they also see what might be called MOS me method of operations of how people do this that then the feedback comes to you which was talked about we fell out
▶ 1:17:52these reports and we don't hear anything back we're not sure whether what we're providing is enough information whether it was specific information and I think some success stories would go a long way to do that um I think that I'd love to have this subcommittee delve into that angle of what we need to do better to inent law enforcement to want to do that whether it's us paying attention or gathering things together
▶ 1:18:22I want to thank you Warren for doing this hearing I think it's most INSP instructive about our job as members of Congress to warn people in particular seniors I yield back my time chairman I thank the gentleman and gentleman from California who's also the ranking member of the task force on monetary policy Mr Vargas is now recognized for five minutes thank you very much Mr chairman and thank you for holding this hearing and I also thank the ranking member um and I
▶ 1:18:52also thank the witnesses thank you for being here today I think it's and very very informative I do have to call out though right at the beginning when a lot of my colleagues on the other side like to talk about unconstitutionality or illegal acts it's funny that none of them seem to call out the executive orders of President Trump in fact interestingly a republican appointed judge judge John kaufner said this that one of the orders is blatantly unconstitutional
▶ 1:19:23because I have a understanding how a member of the bar could State unequivocally that this is a constitutional order it boggles the mind and again I I think it's important to call that out because I know we've heard time and time again since I've been here of the cfpb is and illegal Bureau it went all the way to the Supreme Court and certainly the Supreme Court didn't agree with my colleagues and so I think that has to be called out so I call it out I do want to ask this there seems to be a contradiction
▶ 1:19:53in what some of you have been saying today it's interesting if you if you listen to what some of you said say the government has a whole bunch of information and they ought to give it to us and sometimes in real time so we can help them solve this fraud problem and then I hear from somebody else saying the government has too much information and this information in fact could be hacked and then that would be very detrimental to us I mean it seems that that's what I heard did I not hear
▶ 1:20:24that I mean let me let me go first to uh Mr uh rent I mean it sounded to me like you were saying you're not confident with some of the information the holds yeah absolutely if if the beneficial ownership information database on Ford have 32 uh over 32 million uh driver's licensed photo copies of small business owners which would make it a hacker's dream to get that information from an identity theft perspective
▶ 1:20:54right in in fact we see right now a lot of the complaints that we're getting about does they're trying to get into people's private information that no one knows why they need it and then it seems and not for a negative purpose you guys want to stop fraud but it seems like you're saying the federal government has a whole bunch of information and we'd like to have it in real time so we can stop this fraud well it seems like potentially could be a massive invasion of privacy how do you reconcile that yes uh thank you thank you for the question you know
▶ 1:21:24the the folks that I represent the thousands of dedicated anti-money laundering and fraud professionals care for our customers Dage just as much as everybody else in the industry however we have a responsibility to our customers to collect data and collect illicit threats on our customers to do things like transaction monitoring well well no one no one disagrees with that but I and I and I have to tell you I I come from the perspective that I think banks try to do the right thing with this information I don't think they want their clients be defrauded
▶ 1:21:55I I don't believe that at all I think you guys are trying hard but I also I'm not one of these guys that thinks the government are the bad people either I think the government attempts to do the right things too sometimes it falters like anybody else but it does seem like you're asking for a lot of information private information that a lot of people would have a problem with you having F in in fact I'm kind of surprised some my colleagues on the other side didn't call that out they're usually pretty good about this privacy stuff but um I mean it seems like you're saying Hey give us a whole whole bunch of this information
▶ 1:22:25back I mean isn't there a conflict there again thank you for for the question it's not a conflict from from the financial crimes perspective um we as financial institutions collect a lot of sensitive information on our customers already to establish a reasonable belief in that customer's identity um the information I'm looking to and my folks in my industry are looking to partner with is a secure transmission of of in information
▶ 1:22:56that has been used in a financial crime outside of the institution that we are employed by uh no I I get that I get that the government has a lot of information you'd like some of that too and I I don't know it seems to me that could be a massive invasion of privacy I'm surprised that my colleagues on the other side haven't called that out I do want to say one thing though you talked about the financial fraud with the farmer the cfpb was still in order we could still go after that in fact right now when they're calling about fraud no one answers the damn phone so we have elderly people we have people in the military
▶ 1:23:26veterans in San Diego that call the cfpb and there's nobody on the other side of the line and that's a problem with that I yield back I thank the gentleman uh the gentleman from Texas also the chairman of the small business committee Mr Williams is now recognized for five minutes thank you Mr chairman thanks to the witnesses for being here uh Miss Burns Co and we are seeing an evolution of how fraud is being committed and concealed particularly through the use of emerging Technologies like decentralized exchanges and and
▶ 1:23:56cryptocurrencies these tools are not only being exploited by traditional scammers behind investment funds and pig butchering schemes but increasingly by sophisticated transnational criminal organizations including Mexican drug cartels that are adapting their T tactics to evade the detection in many cases these groups are bleeding fraud proceeds with other elicit revenue streams and using crypto infrastructure to obscure the origin and flow of funds now from your advance AG what trends are you seeing in
▶ 1:24:27how frauders both individual and organized are using these Technologies to evade AML controls and how is your organization working with the private sector and law enforcement to stay ahead of these evolving threats and ensuring we can continue to track down these criminals effectively thank you for the question and we're able to track these cartels purchasing F CH fenel precursors from Chinese dealers who are primarily operating in cryptocurrency we're seeing elicit actors adopt current cryptocurrency
▶ 1:24:57for the same reason it's being used for legitimate purposes because it's stable it's liquid it's fast um any technology we can count on fraud stirs to abuse um and luckily we've been able to track some of these fenel dealers and Mexican cartels um but they're early stage in cryptocurrency and they are not expert launderers which provides excellent opportunity for intervention I want to highlight the eastern district of Wisconsin for forfeiting $5.5 million
▶ 1:25:28in cryptocurrency associated with cartels and Chinese F uh fenel precursor dealers so there's a number of cases um where we we see this over and over at the federal and state and local level and we need to make sure that state and local investigators are equipped to be able to identify and track these payments okay thank you one particular area of concern of mine is how government related reporting requirements such as finsen beneficial ownership information rule may be putting small businesses at and their owners at risk the
▶ 1:25:58roll out of Boi reporting under the corporate transparency act has required millions of small businesses to navigate a complex new federal compliance system often for the first time unfortunately Bad actors using their requirements of the rule to exploit business owners through uh fising emails fraudulent websites and scam calls impersonating offence in I applaud the Trump Administration for scaling back its harmful requirement recognizing disapate burden and security risk that rule that this rule has placed
▶ 1:26:28on small businesses but there are still bad actors we must protect small businesses and entrepreneurs from so Mr brayan how has fen's Boi reporting requirements opened up small businesses to the threat of Fraud and scams and how can Congress better protect small business owners from Boi related fraud uh thank you Congressman uh the first one I discussed earlier is uh filing scams themselves when you do a Google search the first several results uh are not going to be from finsen
▶ 1:26:58they're going to be from uh boir r.org who has a what looks to be a government seal with an eagle in it and these some these sites are charging $400 to file and then me uh small business owners have no idea if their information's uh actually being filed uh and then of course there is the question of uh when you have your a copy of your driver's license in a database uh and there's tens of millions of driver's license in there uh it's only a matter of time until that information is leaked or hacked and that opens
▶ 1:27:28up significant identity theft risks thank you I've got limited time but Mr mofin could you elaborate on how the current filing burden of SARS and ctrs are affecting Community Banks and how can Congress provide financial institutions some relief from these burdens while still giving law enforcement the information and tools that they need thank you for your question I I think the burden um needs to be shifted to a a risk based approach that's an alignment between Regulatory Agencies law enforcement and the financial
▶ 1:27:59institutions check the box exercises are drain on resources across the industry and it it's demoralizing to the institution the the folks that I represent that we are not focusing on the threat the real threat to our customers but rather we are taking part in check the boox exercises to get the machine of filing SARS or ctrs out out within a uh within the regulatory expectat expected uh slas
▶ 1:28:29okay thank you I have le on my time back Mr chairman uh thank the gentlemen and the gentleman from Illinois who's the ranking member of the financial institution subcommittee Mr Foster is now recognized for five minutes thank you Mr chair and to our Witnesses um I'd like to talk a little bit about identity fraud um and the particularly the role of digital identity systems and maybe ameliorating some of that you know States like Louisiana are using digital driver's license to keep kids off porn websites things like that and um so I guess my first
▶ 1:28:59question um Miss Stokes um what fraction of the frauds really at some point um against seniors involve identity fraud where someone's representing themselves online uh as someone who they're not oh thank you for that question representative it kind of goes two ways so identities that have been stolen and used fraudulently can be used for a whole range of things but when we're talking about what's happening online people don't need uh
▶ 1:29:29stolen identity to pretend who they are I mean it's it's too it's too easy um you can create so I I guess yeah the question is that if it became sort of standard practice when someone contacts you sends you an email text message contacts you with social media to just give a little token that says here is the proof that I am the legally traceable person you know yes thank you representative and there are activities under way in the industry to try to come to that and I would think that would benefit everybody yeah just it
▶ 1:29:59seems like one like guess one of you mentioned the the error message on the screen that sort of triggered a big relationship that turned that was just completely fraudulent and and if that it just it was became standard practice and then you can contact me you someone can send me an anonymous text and I'll just assume it's coming from some AI generated trash but if they're willing to identify themselves then I'll pick it up even if I don't recognize the name and it seems that's a much healthier way to end up with this wave
▶ 1:30:30of identity fraud that we're we're seeing um now another thing a lot of you have mentioned um the need to catch the this at the front door and the use of technology and one of the the new pieces of technology that may become important are these AI personal assistants and companions that are really um in some cases you know even simple robots that seniors fall in love in with when they have get into Memory Care situations or just um you know the taxi driver I know spends his day
▶ 1:31:00in conversation with an AI asking him questions about you know sports scores or how the Wildfire is doing and it seems like an an entity like that if properly designed and regulated could be sort of looking over the shoulder of Elders as they're on the internet and saying hey you know this you know this AI personal assistant which is being rolled out by dozens of AI companies um could if it Done Right really be the first line of defense against this and are you is anyone aware of something like
▶ 1:31:30this uh that that is underdevelopment or or being marketed way thank you representative I'm not aware of those uh I'm sure that's out there um but we have grave concern about the misuse of generative artificial intelligence well this would be an AI on your side this would be a product provided to that person whose job it was to defend that person against the the wave of garbage out AI generated garbage on the internet and so
▶ 1:32:00it seems like there may be something there and it would be an interesting project for a nonprofit for example or or just a company to to think about developing because that you know what you'd really love is that if every senior on in the on the planet had a benevolent um you know adviser looking over their shoulder and saying you know I'm very familiar with the millions of frauds that that exist and what you just are getting here on your screen looks a whole lot like
▶ 1:32:30a fraud I've seen a thousand times before and that can be done it seems with properly regulated AI assistance and it it seems like that's a real opportunity so any thoughts you had on that or or any that you're aware of being developed I'd be interested um um so let's see I guess I guess represent Vargas made the point I wanted to make about the the tension between knowledge sharing and privacy because when you're talking about knowledge you're talking about knowledge of of
▶ 1:33:00things that where there's no warrant and no not necessarily probable cause but if you see the whole picture you can assemble the probable cause and it seems like that's very sensitive legal grounds in legal territory to try to figure out how to strike that balance I just we have to make sure that as politicians we're not sort of making too inconsistent request of whatever legal system we set up for that um anyway I guess that's oh
▶ 1:33:31last quick question what fraction of the by bybit hack money has been recovered the1 and a. half billion dollars North Korean what what fraction has been successfully laundered thank you for the question I'm not familiar with the current stats this is an ongoing investigation but chalis is ated the recovery of $40 million to date of that okay but at 1.5 most big part of it has been successfully laundered and has lost forever is that correct it it is ongoing sir right thank you y back I thank the G the
▶ 1:34:01general woman from California U Miss Kim is now recognized for five minutes thank you Mr chairman I want to thank you for holding this hearing and I want to thank our Witnesses for joining us today you know recently I've been really uh concerned about the role that the the Wayan group plays in cyber scam operations uh Miss Cohen I know that uh Chanel Lis uh played a very sizable role in exposing the groups
▶ 1:34:31illicit activity so can you break down what exactly your found thank you for the question so we've been tracking way1 for a long time and since 2021 way1 has processed $70 billion dollar worth of cryptocurrency way1 guarantee operates as a peer-to-peer Marketplace allowing vendors and buyers to connect it receives a profit uh a fee from those transactions and these vendors are nakedly selling scam material social media accounts
▶ 1:35:02money mu services and buwan also offers an exchange capacity and it is the One Stop Shop for scammers giving them everything they need to conduct scams at scale for cheap you know those that are critics of blockchain often painted as a technology existing primary to launder money or uh for other illicit activities however they failed to realize that the transparency
▶ 1:35:33that comes with the digital Ledger can make it easier to identify and shut down Bad actors so miss Cohen how did you leverage blockchain technology in your investigation in whiteway uh group The the blockchain reveals a very detailed story about Wayan way more granular it than we would ever have from traditional financial institution investigations and it paints a very Vivid picture of its elicit exposure we see many
▶ 1:36:03of our scams are are using Quan as a common denominator the common place to launder cash out funds but also reinvest the proceeds of scams for additional materials used to Target additional victims and um it it provides a very powerful tool for financial institutions that leverage our PL platform for Trans action monitoring as well as investigative law enforcement uh to understand its inner workings so as we Tred to uh shut down organizations
▶ 1:36:34like the what way uh Wayan group do you think section sanctions are effective tool sanctions are certainly a powerful tool and one tool in the toolbox I think more clarity would enable financial institutions and cryptocurrency businesses that leverage our data to understand if and when they have exposure whether they have customers sending two or receiving funds from way1 it essentially cuts way1 off from the mainstream crypto ecosystem could you
▶ 1:37:04give us an example of how this was actually used and it was a sanction was effective sanctions have been most effective when when um coordinated with law enforcement that onew punch of not only designations but also takedowns uh just last month guarant Tex which is a sanctioned Russian service um persisted despite certainly any uh any cryptocurrency business with
▶ 1:37:35receiving from or to garant TX has the ability to block those transactions effectively and what we're now examining is because garant has been blacklisted it's potentially rebranded but it allows us to follow the money Trail to identify that next iteration even when they're jurisdictions that are not compliant with Western Law Enforcement we can still impose cost we can inject friction thank you you know I want to shift gears now and focus on the burden that suspicious
▶ 1:38:05uh activity reports have become on uh Community financial institutions so Mr uh mlin I want to ask you the questions uh for Community Banks that have smaller regulatory teams how much harder is it to complete uh the SS with the level of details that is required thank you for your question so the the burden on a smaller financial institution versus a larger institution is is greater uh at a larger financial institution there's
▶ 1:38:35an investment in Automation and other ways to make the investigative process and the SAR filing or CTR filing process more automated and faster at the community bank or smaller financial institution level the burden is on the person um the person has to basically write the The Who what where when how and why the activity took place and in great enough detail so that we're turning over SARS to the law enforcement that is considered actionable intelligence um we do not
▶ 1:39:05like getting feedback that we need to amend SARS or things like that to provide more data so we look to as provide as much data upfront so the law enforcement could take it but it is a very burdensome process because at that level of of of institution there's not a lot of automation that takes place well thank you very much I yeld back uh thanks Miss Kim the gentleman from Illinois Mr Caston is now recognized for five minutes uh thank you Mr chairman uh
▶ 1:39:36Mr mlin um first I just want to State the obvious um you currently have systems in place right to block freeze reject any transactions and report them to ofac if they're done by Shady characters sanctions evaders child traffickers is that a that a broad yes yes sir okay I'm glad to hear it um it'd be in trouble if you said anything else um tomorrow the the committee is going to mark up stablecoin legislation which would include language to treat stablecoin
▶ 1:40:06issuers as financial institutions under the bank secrecy act in which case they would also have to comply with anti-money laundering know your customer rules that that you um comply with as well um is it your view that if that stable coin issuers should be subject to those same rules that you comply with regardless of how those rules may change that the rules shouldn't be different from from One financial institution to another thank you for your question yes sir I do believe um any any
▶ 1:40:36product service industry or technology that is responsible for moving funds between customers or citizens has to be subject to regulation to make sure that they're protecting the the the customers or country okay and and since you've presumably got some experience fire you know fil filing SARS reports and what have you can you speculate on what the bad guys would do if we had a stable coin regime where all of a sudden they weren't subject to the same rules that a depositor at your
▶ 1:41:06institution is subject to uh thank you again um I could speculate that the bad guys would uh become even more aggressive in the space in terms of targeting um uh vulnerable individuals to to to fraud steal and and abuse um the customers of of the stable Hood um well I I certainly agree I'm glad to hear you say it and I raise that because some of my colleagues on the other side of the aisle believe that stable
▶ 1:41:37coin issuers should not have to comply with anti-money laundering rules and I I guess if you're here to represent our nation's child traffickers that's a good position to have but I think it's important that we make sure that we keep those protections um Miss koven I want to move to you just to think about what might happen if we don't have have those Protections in place my understanding from year 2020 from J analysis 2025 crime report is that stable coins account for 63% of all illicit transactions that You' tracked and that sanctioned entities are increasingly using
▶ 1:42:07stable coins because of the difficulty of using the US dollar do I have that basically right on what your 2025 report said yes sir uh stable coins have become the currency of blockchains they are by far the most transacted cryptocurrency today um and we support efforts to establish regulatory Frameworks across stable coin issuers um robust consistent standards across this growing Market can Ur but but I I appreciate that but I just want to focus on the that 63% of the illicit
▶ 1:42:37activity is is done on stable coins and I I want to understand that number because my understanding of how what you can track is that you can't see the transactions right correct so it's so it's 63% of the stuff that's trackable but presumably if the bad guys know what's trackable there might be some it might be more than 63% if you could track everything as an investigator I for me personally it is a gift when elicit actors decide to dabble on stable coins because of the traceability
▶ 1:43:07and also seiz ability Midstream yeah I mean it's it's sort of like I love the guy who robs 7-Eleven without a mask and holds his ID up to the camera before he pulls the gun out right um but presumably there's more there now I I say that because if I am a bad guy and we don't regulate stable coins I can imagine a scenario where I go on to you know I buy some other kind of crypto I use that to launder money I then bring that onto an exchange that's issuing the stable coin convert it to stable coin those are all offchain transactions so you wouldn't
▶ 1:43:38see any of that right if if that was the means of of money laundering we've still had spectacular seizures including a 225 million dollar seizure of stable coins associated with the scam fund so scammers know it's visible and traceable but our still taking the risk to dabble an in no no no and I'm not saying this to criticize chain analysis I'm just saying that because you're not tracking the offchain if I bought another crypto went onto an exchange where the exchange was issuing this because the exchanges run their own ledgers right and so that's you don't see that stuff right
▶ 1:44:08and that's like you know I mean you'd mentioned garant earlier but my understanding is that like garant loves tether because they can do all that sort of stuff and bypass the system and even though we've you know hopefully we're clamping down on garant you could still do that inside other exchanges and not track that right absolutely that's why regulatory Frameworks that put standards on those cryptocurrency business to understand all this swapping that's going on parad I really appreciate your expertise I'm out of time and just a marker
▶ 1:44:38for tomorrow let's make sure we don't make things easier for the bad guys yeld back I thank the gentleman the gentleman from Tennessee Mr ogles is now recognized for five minutes uh thank you Mr chairman and to the witnesses um you know we're you know a new landscape is is developed before us and the Bad actors have clearly figured out a way to to thrive in that environment so I want to go back to ha Juan um you know up until January Apple and Google users on those two platforms
▶ 1:45:09could access so so miss koven when and when you look forward to one what is currently the accessibility for Americans or westerners to to that that platform and other platforms that may pose similar risks yes so we're seeing scam syndicates primarily leveraging these compounds quwan guarantee continues to be the common denominator for the majority of scams that we see and including
▶ 1:45:39the laundering of scammed proceeds as well as facilitating the tools and services needed to perpetrate the scam sto identities and um data to contact and reach out to Americans for targeting of these uh confidence and pig butchering scams so if you could wave a magic wand what would be your fix what would be the defense that firewall that we put up here to protect the IND user Americans from this type of uh scamming activity so analysis has flagged way1
▶ 1:46:09in our product so that financial institutions with exposure to way1 can make risk-based decisions on funds going to or coming from that platform um more regulatory pressure on institutions that that are flagrantly abusing or flouting regulatory Norms is important closing those gaps for AML standards is is is important because of you know this jurisdictional Arbitrage is is certainly occurring now obviously this is focus uh in China
▶ 1:46:40uh but what about are there other nation states that we we you have concerns about who are doing similar are learning from other Bad actors and scaling up to quite frankly abuse Americans my apologies certainly if uh huwan didn't exist there would be other jurisdictions other services ready to take its place and so we need to continue to use blockchain analytics to understand where these funds are going and who then where the elicit uh users and wind up
▶ 1:47:11having success laundering funds well back to this platform when you look at the uh child trafficking that's taking place and the movement of dollars uh there's been again the Bad actors have leveraged this technology to monetize the abuse of individuals but in particular children again what are next steps in combating that being more aggressive in that space um as we as this is becoming really a plague of our society
▶ 1:47:42yes so these are these scams are operated by organized criminal syndicates involved in not only scambling scamming but gambling uh child trafficking sexual trafficking and uh being able to find those centers of gravity inject operational friction deprive them of uh funds the seizing funds um and also um being able to uh cause them to be a paride in the ecosystem is incredibly important but we need that blockchain analytic capability
▶ 1:48:12to understand where the funds are going and identify those behind it so in other words go after the money at the end of the day right yes M Mr chairman I'd love to get when you talk about the regulatory regime that colleague from the other side I'd love to get your thoughts over the next few my remaining time on what you envision uh as a regulatory regime for stable coin and quite frankly the caution that we must you know how we must proceed with with caution and so that we don't disrupt a Marketplace that can be a benefit to the market but at the same time understanding that there's victims
▶ 1:48:42in process yeah um you know I I think uh the the thanks for the dialogue here but I I think the Mr caston's concerns about IIT Finance are well placed and it highlights that you know the technology is changing stable coins are a little different way and that's why our witness from chain Alys is you I think you did a great job answering hey we like when things are on chain we can follow it even easier uh and and when I'm talking about things in my other Committee in foreign affairs a lot of the things that we're looking at
▶ 1:49:13with non-state actors that are you know circumventing uh our sanctions which are things our committee does doing those kinds of things on chain are more traceable uh in a lot of ways that's exactly what we want sometimes we don't even want to turn off the flow of cash immediately we want to be able to follow the flow so that we can actually Target in the case of warfare kinetic targets and then in the case of going after organized crime we don't necessarily want the guy working
▶ 1:49:43at a mom's basement want to know who he's reporting to and so the question is are those tools better we're going to talk about that in a lot of ways thanks Mr ogles are you uh the gentleman times expired and he's yielded and the gentlewoman from Cal or gentleman from California Mr Lardo is now recognized for five minutes thank you Mr chair thank you to our Witnesses uh for all this information I the hearing of course is caption follow the money and I used to be involved in Prosecuting drug drug traffickers
▶ 1:50:14and and human trafficking uh as a federal prosecutor and later as a DA and certainly I had plenty of challenges following the money when we knew there was information being provided by entities that was false uh that would conceal who the actors were and who was controlling them and most importantly who was getting the money from the criminal Enterprise because we knew those were the folks who were really running the show I'll give you a quick example we had I remember a a a
▶ 1:50:44Cuban national who is controlling a major human trafficking Enterprise in Southern California of course using entirely us corporations filed under California and other states laws uh with US citizens essentially ostensibly being their officers so I'm concerned as I know the national District Attorneys Association is also concerned based on what we see from their statement December of 2024
▶ 1:51:15at this legislation that we're currently considering that would exempt every us Corporation under a certain Thresh size from corporate transparency acts requirements providing basic information information I'm sorry basic ownership information to fincent and let's be clear about what that information is under the law it's the name of the owner their date of birth their address and some identifying number from a driver's license or passport or some other government that's it
▶ 1:51:45four items now my experience uh certainly trying to get the identity of those individual ual controlling these entities that engaged in criminal activity was pretty important and I guess I just wanted to ask Stokes is it help uh based on your experience to be able to have this kind of information if we're trying to combat fraud thank you representative absolutely the information is critical um and I just want to point out that we've heard a lot
▶ 1:52:15about um concerns of administrative burden and concerns of data privacy I I want to turn to the burden of the victim when you look in the aggregate of how much has been stolen just in 20123 an estimate from the FTC 158.3 billion do that is three times the revenue of the Coca-Cola Company we have to understand that yes there are burdens on on
▶ 1:52:45uh on businesses and maybe some could be uh put together better than others but we can't be moving away from rules that help protect consumers I agree Mr dos and in fact I believe Mr bran suggested somehow or another corporations have to hire CPAs and outside Council to be able to submit this information about the name of the owner the date of birth address and basic uh I guess driver's license number is
▶ 1:53:16that your experience that you need outside Council to do such things thank you repres I can't speak to that because that's not the space I work in but I I I hear your point yeah so $13 billion in loss 158 billion 158 billion thank you for that um Mr B you might have guessed I I was going to you next I'm trying to understand why providing these four basic pieces of information which by the way I had to provide when I opened an LLC last year any bank would
▶ 1:53:46require it it's pretty basic information what is the extraordinary burden involved here uh it's also a photo copy of a of a driver's license but it's that information on the challenges substantial control prong and I I think one thing that's getting lost here is that every bank already has this so this is a duplication of the customer due diligence role which already exists so every single LLC that has a bank if the bank is doing its job they have this information what
▶ 1:54:16this is really what happens if the bank has individuals who are involved in the criminal activity wouldn't you want that information in the hands of those who are investigating criminal activity not those who may be anyone who's investigating could subpoena the bank for it at any time and what happens if you're just investigating for the first time and you actually need to know who you can subpoena you don't know exactly where to go because you don't have ownership information to begin with I mean you you rais concerns for example about criminal
▶ 1:54:46threats to these companies but in fact the law is very clear under Title 31 penalties only crew if you're fraudulently reporting this information willfully and fraudulently reporting information that is false and somehow know that you you've cast this as some kind of great criminalization of corporate America how can that be that's a a knowing and willing standard which is usually in the eye of a prosecutor not knowing willing it says willfully provide false or fraudulent that's what the statute says not knowing it says willfully
▶ 1:55:16let's be very clear about what the statute says the gentleman's time has expired thank you I'm uh the gentle the gentoman from Florida Miss Salazar is now recognized for 5 minutes here yes thank you thank you Mr chairman and thank you to the witnesses uh my name is Maria Salazar I represent the District Number 27 in Florida which um includes the city of
▶ 1:55:47Miami and for what I've been studying um um my hometown was ranked number one in the nation with the highest per capita fraud in the country that cost Floridians over $850 million that is and Miami is a great place but this is embarrassing so I would like to ask Mr uh Lo M mclin
▶ 1:56:17if uh you could please explain to us um why Accord according to the FTC fraud Report Miami is number one in the nation for reported fraud why is that thank you Mr mclary thank you for your question I can't really answer as to why Miami in particular is ranked number one um but I can tell you that I could tell you that
▶ 1:56:48the the financial institutions today that that I've had the honor of working with and partnering with have dedicated time energy and uh more importantly resources to developing upfront detection um of the fraud um however there any specific reason why that area in the country specifically the city of Miami is the number one in the country fraud what are we attracting
▶ 1:57:18if I if I would have to take a guess it is the population of the potential vulnerable population that resides within um the the State of Florida um also the the availability of being able to reach Miami from a foreign country also would probably play a part in that having the ability to um contact UM an elder in Miami and and talk about investment opportunities
▶ 1:57:49maybe in a in their home country um exists greater than in other large areas of the country um again that's just me taking a guess using my experience o over time but uh my fellow panel my fellow witness my fellow Witnesses may have a better answer than I maybe uh Mrs koven would you like to give us uh maybe your opinion as to why the city that I represent is number one for fraud in the country I'm unfamiliar with Miami in particular
▶ 1:58:19but from my experience scammers are targeting Americans indiscriminately and are looking to develop relationships with individuals over text and social media and H very happy to have their hands on American data to to strike up those conversations because America is a target-rich environment is a wealthy country and it makes it a prime target for these fraudsters so any additional tools any of you that would like to
▶ 1:58:49share with us any additional tools or ideas we should consider in order to stop this or make it a lot harder for these uh scammers to attack our constituents if I may representative of course um one of the points that was made a little bit earlier I think the targeting does have a lot to do where uh of where older populations are and if you broaden your look Beyond Miami you'll see probably the top five states are where the highest number of older adults live um it's not that
▶ 1:59:19they just Target older adults but when they the older adult there's a much bigger payout because they have the assets right so that's one thing another thing is that you know this is organized crime and our system of law enforcement just isn't resourced um or isn't able because of other competing demands to look at these crimes through an organized crime lens and if you did you would get the $10,000 grandparents scam in Miami connected to the $10,000
▶ 1:59:50grandparents scam in Tennessee and all of a sudden it's a million dooll threshold breaking case and there's a new uh initiative underway that will launch an April that's going to do just this uh the national Elder fraud coordination Center and I'd love to tell you more about that if you're interested yeah with so that basically where you're telling us is that we are going to be honing on and targeting the senior population to explain to them or to send the message to be very careful so that means that our seniors do not
▶ 2:00:20understand that they are the number one prey for this type of scammers thank you representative I can tell you my job is to educate older Americans and within two years of doing this I realized we cannot educate our way out of this and N FC isn't about educating it's about pulling data together from the private and public sectors Sol we cannot educate them that's could you I mean my time is up but just give me 30 seconds why do you think education is not the way to go with the senior population we've been Ed saying education is the answer for
▶ 2:00:50years and where are we you know the 158.3 billion 61.5 billion of which was stolen from older adults in 2023 it can't work on its own and because we've relied on that it served to deprioritize any other activity that could have gone to mitigate the loss that's now growing so meteorically thank you you back thank you appreciate the dialogue there and uh the general one from Michigan
▶ 2:01:21uh the the chairwoman also the chairwoman of the full Republican conference Miss mlan from Michigan is now recognized thank you and thank you all for being here this a really important topic I think um and something that I think we really need to figure out how to get our arms around so again appreciate for you holding the hearing as well as talking about this um I want to start with Miss Co Miss koven is and and I'm trying to understand blockchain the role it plays but could blockchain
▶ 2:01:51analytics or other um technological solutions so to speak streamline the filing and Analysis of SARS and ctrs and and and if the answer is yes which I hope it is could you expand on that a little bit yes thank you for the question um blockchain analytics already is enriching SAR and CTR quality our customers from private sector are leveraging the insights from our data to to file their s
▶ 2:02:22in ctrs today it paints a very Vivid picture of the entire kill chain of events so if we're talking about scams in particular you have a much Vivid color of where the funds are going and coming from counterparties as well much more so than you would in the traditional financial industry and is the timing a lot quicker as well I'm assuming yes ma'am that's correct the uh cryptocurrency is an attractive asset for legitimate uses as well as elicit for its speed
▶ 2:02:52I mean in my opinion we have all these governmental agencies and we have these rules and regulations and at times they're so cumbersome and at times overburdening for the businesses where where I think the businesses are trying to do the right thing and people are trying to do the right thing it's just there's the volume is so so um immense right that it just takes time to go through that so one of the biggest advantages I see and I'd like to get your opinion on this is the time because to
▶ 2:03:22your point the timing is crucial on when we find these could you talk a little bit about the timing of this and and the time frame how the time frame is shortened yes so we also provide realtime transaction monitoring allowing financial institutions uh to get alerts on funds incoming or off um going off their platform and they can be alerted in real time uh to these funds so really time is at the essence and current processes
▶ 2:03:53reporting information sharing is is painfully slow and even though cryptocurrency and the blockchain enable tracing and freezing um time is really at the essence we have to make sure that those insights are delivered in a timely fashion do you have any measurables on that no ma'am I okay all right just curious thank you um Mr mlin how can finsen improve its communication and feedback mechanisms with
▶ 2:04:23banks and analytics uh firms following SARS and CTR submissions could you talk a little bit about that Jordan thank you for your question um as you everybody could probably tell the point of a lot of the things I've said today is creating an open and transparent two-way communication between the public and private sector so that we could begin focusing the resources that we have on the threats that our customers face on a daily basis um so
▶ 2:04:53working with finsen to establish a working group or task force or uh whatever terminology you want to throw at it um would allow us to begin establishing and doing data analytics on what the government is seeing what law enforcement is seeing and what the private sector is seeing so that we can um so that we can begin putting pens of paper on what a true risk-based approach means for for financial
▶ 2:05:24crimes across the board fraud money laundering sanctions and and terrorism Finance are you getting any push back or running into any roadblocks on that um I wouldn't say roadblocks or push back I think um with the The increased scrutiny that all all of you are bringing to light today I do think we are seeing across the industry a knowledge sharing exercise taking place whether that be informally or
▶ 2:05:54formally um but um more work is needed I think when we look at things like the ffic manual and and the revisions there I do think a public private and law enforcement type engagement would allow us to put put down what the actual requirements are so that we could so we could point to uh the the crimes that we're trying to capture and are you getting any push back on that public private uh Partnerships personally
▶ 2:06:24with the folks that that that I work with no it's just not official it's um you know it's at you know outside the hallways here or at a convention or a conference that knowledge sharing really exists thank you with that Mr chairman I yield back thank you gentleman gentleman from Iowa is also the vice chairman of the committee uh Mr nun is now recognized for five minutes Mr chairman thank you very much for putting this important hearing together today we all know that my home state of Iowa in the heart of the Heartland my senior citizens
▶ 2:06:55are probably Target number one for the scams uh it's happening across not just Iowa but the entire country I'm proud to say that us is also probably the best place for innovators to come to the Forefront and really be the superheroes in the story of fighting back in November the Department of Justice used blockchain to freeze 225 million dollars that were used in a human trafficking scheme however even amongst this solution situation we remain challenged
▶ 2:07:25for most of our state and local law enforcement enties to get an opportunity to play as Mr mcclaflin you just highlighted one victim back in my hometown in Iowa 68-year-old veteran lost over $100,000 to a scam challengingly local law enforcement couldn't even begin to help that's why today Mr chair I'm introducing the bipartison guard act to give state and local law enforcement uh agencies access to the technology they need to combat these financial fraud crimes and pig
▶ 2:07:55butchering scams so let's get started on this Miss Cohen I know that you and I are on the same page here because in your testimony you emphasize the need to train more people on things like blockchain those digital rails in which the future of technolog is going to operate on here in the United States this is exactly what the guard act my bill attempts to accomplish so I understand that your company has trained people on these Technologies both at the state and even down the local level can you briefly walk us through some of the examples and if there's
▶ 2:08:25been stories of here yes thank you for the question and I'm sorry to hear about your constituent uh being defrauded it's a story we hear all too often unfortunately uh at analysis though we do work with over 70 state and local governments around the country and we have seen astounding successes when law enforcement is trained and equipped properly um and we have only scratched the surface unfortunately and particularly with the proliferation of these
▶ 2:08:55types of scams we need to better equip state and local law enforcement to understand how to handle these cases and connect a single fraud victim to a wider Network and increase chances of disruption and Recovery Jackie I think you really highlight a point here that this has happened in the physical world before and we've had good game plans to go after it you know what our guard act bill is aiming to do is to create these fusion centers of best practices at the federal level marry them up with local law enforcement agencies and provide
▶ 2:09:26those level of resources to really go after that so that you know an Ian who Los loses 100,000 or a New Yorker who loses a million all have the same access to the same resources is this what you've seen uh through your experience to be a solution yes sir we should have every Advantage because these scammers are leveraging cryptocurrency but time is at the essence and what we have seen in working groups and small scale operations is that when private and public sector are together sharing information
▶ 2:09:56dynamically we can turn that wealth of information into actionable insights quickly and have stunning successes thank you Miss Cohen Miss Stokes uh I want to thank you and your incredible team at ARP you're on the front line not only guarding our seniors but you've helped bridge this to be a bipartisan effort our guard Act is really brought together by Mr gimer myself a Republican and Democrat really working for the best interest of the American people here I'd like to one ask how could retirees benefit from a local law enforcement
▶ 2:10:27that would have access to these greater tools that a guard act could provide so they could get to know about blockchain understand how financial fraud works and really address the sources of these crimes to stop the number of victims we're seeing thank you representative andp is very proud to support the guard act um I think it's critical we talk to probably a 100,000 victims a year maybe 500 calls a day and the vast majority of fraud victims
▶ 2:10:57where money has been stolen they have no recourse they'll call local or State Police and even if police um that they talk to understand that it's a crime they'll still say there's nothing we can do about it that's right um and sometimes don't even take the report which is a challenge in and of itself so anything that we can do to not only provide the tools but importantly to train local and state law enforcement on things that they simply don't have the training on right now would be of great benefit to
▶ 2:11:27our constituency well thank you Miss stes I want to again say thank you to ARP for helping lead this because it's not only my seniors who want this it's every American who needs this and no one more so that my local law enforcement who want to be able to help our own Community get better this gets us in the right direction Mr chairman thank you very much I yield the remainder of my time I thank you very much I thank all of our Witnesses and our colleagues uh for a great hearing to today uh kind of scary what's going on for the citizens of this country hopefully this will help make a difference uh
▶ 2:11:58without objection all members will have five legislative days to submit additional written questions uh to the witnesses uh and to the chairman for questions um Witnesses please if you get those respond no later than May 6th and this hearing is now
▶ 2:15:19e e