A federal statute was recently enacted which expands the government’s ability to prosecute fraud. A Florida statute regulating money services businesses was also recently amended.
On May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009. FERA provides government agencies with increased funding and better tools with which to combat financial and mortgage fraud. The Act makes a number of changes to fraud and money laundering statutes. One purpose for these changes is to ensure that private mortgage brokers and companies are held fully accountable under federal fraud statutes.
FERA amends the definition of “financial institution” in the criminal code to include mortgage lending businesses. This extends federal fraud laws to cover mortgage lending businesses not directly regulated or insured by the federal government. Thus private mortgage lenders will be subject to the same oversight and enforcement as other financial institutions.
FERA also amends the federal money laundering statute to extend the definition of “proceeds” to include gross receipts of illegal activity, rather than just profits derived from it. This makes proof of money laundering easier to establish.
The Florida Senate passed a bill (SB 1534) this year which amends Chapter 560 of Florida Statutes, which regulates money services businesses. Governor Charlie Crist signed the bill into law in June.
Prior to January 2009, money services businesses were required to keep records of each transaction occurring in Florida known to involve currency or other monetary instruments over $10,000 in value; to involve proceeds of specific unlawful activity or to be intended to avoid reporting requirements. The record keeping requirements were unintentionally lessened as part of legislation enacted in 2008. This bill reinstates previously existing record keeping and reporting requirements, making them consistent with the requirements of financial institutions.
The bill also amends the statute to clarify language dealing with license application and renewal fees for money services businesses’ authorized vendors. Authorized vendors act on behalf of money services businesses at various locations. For example, licensees such as Western Union and MoneyGram may use authorized vendors located at convenience stores to sell their products such as money orders.
Before SB 1534 was enacted, it was possible to interpret the law to mean that fees are to be assessed based upon each authorized vendor rather than each location of an authorized vendor. The bill modifies the statute’s language used in assessing fees in order to remove this ambiguity. This makes clear that fees for authorized vendors of licensees are assessed per location, rather than on a per appointment basis.
If you operate a mortgage lending or money services business, it is imperative that you stay abreast of changes in laws that may impact your business. If you are in need of a business compliance plan or involved in an investigation, contact an attorney to protect your legal rights.