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    Banking Marijuana-Related Businesses: BSA Expectations, FinCEN Risk Assessments, & Federal Litigation

    Thursday, February 1, 2018 - 11:00 AM - 1:00 PM ET
    $249.00
    The Gist: Financial Institutions that engage in transactions involving money generated by marijuana-related activity are subject to criminal liability for failure to identify or report financial transactions which implicate violations of the U.S. Controlled Substances Act (“CSA”). However, there is real potential for community banks and credit unions to offer their services to marijuana businesses. This is because bigger national banks continue to close out the last of their existing cannabis-related accounts. Although your Institution would still take on risk by providing services - which, technically, would violate federal law - if you comply with the Cole Memo and FinCEN Guidance, then this could be a lucrative opportunity.

    This is a rebroadcast of a webinar that was recorded in October 2017.

    Overview

    Under the U.S. Controlled Substances Act, it is a federal crime to manufacture, distribute, or dispense marijuana; likewise, knowingly engaging in transactions that involve proceeds derived from a marijuana business is itself a federal criminal offense. Notably, state legalization of marijuana is not a recognizable  legal defense to a CSA violation.

    If you’re conducting business in a state that has legalized marijuana (to some extent) -  or, if your state is currently considering the legality of marijuana use on some level - you probably want answers to the following questions: 

    • What risks does your financial industry face for serving federally-illegal, state-legal marijuana companies?
    • Can my Bank terminate our relationship with a marijuana-related business or related party?
    • What if our Credit Union believes termination is necessary to maintain an effective BSA/AML program

    The answer is complicated, but it is clear that Financial Institutions are particularly vulnerable to allegations of marijuana-related violations of federal law. The Obama Administration issued three memos related to prosecuting persons who conduct transactions with individuals or businesses involved in marijuana-related activity. These memos provide risk assessment guidance, and were expounded upon in FinCEN Guidance (FIN-2014-G001), “BSA Expectations Regarding Marijuana-Related Businesses." The Guidance explicitly states that Federal BSA/AML requirements  apply even if the marijuana-related activity is authorized under state law. 

    In this webinar, you will learn how to conduct a FinCEN Marijuana-Related Risk Assessment for each business you suspect is engaging in transactions that involve money generated by marijuana sales. You will learn how to correctly file a “Marijuana Limited” suspicious activity report (SAR), a new FinCEN structure that has differentiated filing requirements for marijuana-related SARs. We will also examine relevant legal cases and DOJ enforcement actions to shed light on how federal courts may rule if your Institution is charged with violating the CSA.

    If your Institution wants to serve marijuana businesses or their vendors, then this session is a “can’t miss” program. 

    Covered Topics

    • Examine the U.S. Controlled Substances Act and DEA’s Schedule 1 classification of controlled substances. 
    • Review of Federal Memos, including: 
      • The Ogden Memo (Oct. 19, 2009), states that the Department of Justice (DOJ) will not prosecute individuals whose use of medical marijuana is legal. Asserts that the DOJ will continue to prosecute marijuana traffickers. 
      • Cole Memo I (Jun. 29, 2011), clarifies Ogden Memo and confirms the criminal prosecution of sick people is not a productive use of federal resources. Restates that this is not a sheild for persons in the business of cultivating, distributing, or selling or marijuana - or, persons who knowingly facilitate such activities. 
      • Cole Memo II (Aug. 29, 2013), expands on prior guidance due to state legalization of marjijuana for recreational use. 
      • Cole Memo III (Feb. 14, 2014), asserts that federal BSA/AML requirements apply even if marijuana-related activity is authorized under state law. 
    • Examine the eight (8) Cole Memo Priorities in order to Understand the ways your Institution could be vulnerable to charges of marijuana-related violations of federal law. 
    • Analyze FinCEN Guidance (FIN-2014-G001), “BSA Expectations Regarding Marijuana-Related Businesses.” Discuss a list of “Red Flags” for potential violations of Cole Memo priorities.
    • Explore the differentiated filing requirements of the Marijuana Limited SAR Structure, including when to use the term “Marijuana Limited” versus the term “Marijuana Priority" in the narrative. 
    • Discover how to conduct a Fin-CEN Marijuana-Related Risk Assessment, which includes factors such as: verifying that a marijuana-business is properly licensed and registered with state authority; reviewing the business’s license application; requesting any available information from state licensing and enforcement authorities; developing a profile of “normal and expected” activity for the business; etc. 
    • Discuss the FinCEN Red Flags

    Who Should Attend?

    This informative session will provide valuable assistance to:

    • Risk Officers
    • Compliance Officers
    • AML/BSA Officers
    • Regulatory Compliance Officers
    • Board of Directors
    • Executive Management 
    • Branch Managers

     

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    This is a rebroadcast of a webinar that was recorded in October 2017.

    Overview

    Under the U.S. Controlled Substances Act, it is a federal crime to manufacture, distribute, or dispense marijuana; likewise, knowingly engaging in transactions that involve proceeds derived from a marijuana business is itself a federal criminal offense. Notably, state legalization of marijuana is not a recognizable  legal defense to a CSA violation.

    If you’re conducting business in a state that has legalized marijuana (to some extent) -  or, if your state is currently considering the legality of marijuana use on some level - you probably want answers to the following questions: 

    • What risks does your financial industry face for serving federally-illegal, state-legal marijuana companies?
    • Can my Bank terminate our relationship with a marijuana-related business or related party?
    • What if our Credit Union believes termination is necessary to maintain an effective BSA/AML program

    The answer is complicated, but it is clear that Financial Institutions are particularly vulnerable to allegations of marijuana-related violations of federal law. The Obama Administration issued three memos related to prosecuting persons who conduct transactions with individuals or businesses involved in marijuana-related activity. These memos provide risk assessment guidance, and were expounded upon in FinCEN Guidance (FIN-2014-G001), “BSA Expectations Regarding Marijuana-Related Businesses." The Guidance explicitly states that Federal BSA/AML requirements  apply even if the marijuana-related activity is authorized under state law. 

    In this webinar, you will learn how to conduct a FinCEN Marijuana-Related Risk Assessment for each business you suspect is engaging in transactions that involve money generated by marijuana sales. You will learn how to correctly file a “Marijuana Limited” suspicious activity report (SAR), a new FinCEN structure that has differentiated filing requirements for marijuana-related SARs. We will also examine relevant legal cases and DOJ enforcement actions to shed light on how federal courts may rule if your Institution is charged with violating the CSA.

    If your Institution wants to serve marijuana businesses or their vendors, then this session is a “can’t miss” program. 

    Covered Topics

    • Examine the U.S. Controlled Substances Act and DEA’s Schedule 1 classification of controlled substances. 
    • Review of Federal Memos, including: 
      • The Ogden Memo (Oct. 19, 2009), states that the Department of Justice (DOJ) will not prosecute individuals whose use of medical marijuana is legal. Asserts that the DOJ will continue to prosecute marijuana traffickers. 
      • Cole Memo I (Jun. 29, 2011), clarifies Ogden Memo and confirms the criminal prosecution of sick people is not a productive use of federal resources. Restates that this is not a sheild for persons in the business of cultivating, distributing, or selling or marijuana - or, persons who knowingly facilitate such activities. 
      • Cole Memo II (Aug. 29, 2013), expands on prior guidance due to state legalization of marjijuana for recreational use. 
      • Cole Memo III (Feb. 14, 2014), asserts that federal BSA/AML requirements apply even if marijuana-related activity is authorized under state law. 
    • Examine the eight (8) Cole Memo Priorities in order to Understand the ways your Institution could be vulnerable to charges of marijuana-related violations of federal law. 
    • Analyze FinCEN Guidance (FIN-2014-G001), “BSA Expectations Regarding Marijuana-Related Businesses.” Discuss a list of “Red Flags” for potential violations of Cole Memo priorities.
    • Explore the differentiated filing requirements of the Marijuana Limited SAR Structure, including when to use the term “Marijuana Limited” versus the term “Marijuana Priority" in the narrative. 
    • Discover how to conduct a Fin-CEN Marijuana-Related Risk Assessment, which includes factors such as: verifying that a marijuana-business is properly licensed and registered with state authority; reviewing the business’s license application; requesting any available information from state licensing and enforcement authorities; developing a profile of “normal and expected” activity for the business; etc. 
    • Discuss the FinCEN Red Flags

    Who Should Attend?

    This informative session will provide valuable assistance to:

    • Risk Officers
    • Compliance Officers
    • AML/BSA Officers
    • Regulatory Compliance Officers
    • Board of Directors
    • Executive Management 
    • Branch Managers

     

    Presenter:

    Zane Gilmer

    Zane Gilmer is a partner at Stinson Leonard Street's Denver office. His practice focuses on business litigation and regulatory compliance. He regularly represents clients in state and federal courts and arbitration forums across the country. He represents clients ranging from small regional businesses and individuals to large Fortune 100 companies. Zane is also a regular author and speaker on emerging litigation and compliance trends and he is member of the firm's emerging trends subgroup and Consumer Financial Protection Bureau (CFPB) taskforce.