maryland division of financial regulation

MARYLAND DIVISION OF
FINANCIAL REGULATION
PRESENTERS:
Stephen Prozeralik, Assistant Commissioner
of Enforcement & Complaints
Julio Hernandez, Investigator
Rollin Badal, Financial Examiner
TOPICS OF DISCUSSION
I.
II.
Licensing of Money Transmitters
The Basics of a Money Transmitter
Audit
III. Enforcement Unit Money Transmitter
Investigation
LICENSING MONEY
TRANSMITTERS
OBTAINING A MONEY
TRANSMITTERS LICENSE
™ Good moral character
™ Sufficient financial responsibility
™ Business experience
™Command the confidence of the public
™ Must have a minimum net worth of
$150,000.00
™ 3 years experience in money
transmission or other related financial
services
WHAT YOU SHOULD KNOW
•
An application for a license is made under
oath
• An application must contain:
1. the most recent financial statement of the
applicant
2. a schedule of all permissible investments
3. a 3 year history of any litigation
WHAT YOU NEED
• A resume
• References
• Name, address and
telephone number of
the business
• Name, address and
telephone number of
your resident agent
• Your home address and
telephone number
• Your electronic mail
address (email)
• The same of all
executive officers,
directors and all key
shareholders and
members
• A schedule of
permissible investments
• Fees=$$
THE BIG DAY!
The Money Transmitters License
is then approved by
JOSEPH E. ROONEY
AUDITING MONEY
TRANSMITTERS
WHAT ONE MUST KNOW…
• WHO WILL BE AUDITED? Anyone
who possesses a money transmitter
license in Maryland
• WHAT WILL TAKE PLACE? A
compliance audit will be conducted in
compliance with the Maryland law
Where is the law found?
Glad you asked…
Annotated Code of Maryland, Financial
Institutions, Title 12, Maryland Money
Transmission Act
• WHEN WILL THE AUDITS TAKE
PLACE? There is no statutory
requirement as to frequency. The audit
takes place based on previous exam
ratings, date of licensure, complaints
received and company events, etc.
• WHERE WILL THE AUDIT TAKE
PLACE? The licensee’s primary place
of business
• WHY DOES THE STATE OF
MARYLAND CONDUCT AUDITS? In
order to ensure consumer protection,
compliance and safety and soundness
• HOW LONG WILL AN AUDIT TAKE?
Typically one week, however, an audit
can last longer than a week
HOW DOES IT HAPPEN…
• A notification letter is
mailed 30-45 days prior
to the audit
commencing
• Submission of a preaudit examination 2-3
weeks prior to formal
audit
• Agent visits
•
•
•
•
On-site Interview
Conclusion of Audit
Exit Meeting
Report of Examination
(ROE) within 3-6 weeks
• Respond to ROE within
30 days of receipt
• Follow-up visit if needed
GUIDELINES
•
•
•
•
Appoint central contact person
Ask questions prior to the onsite visit
Maintain formal risk assessment
Have all information in an organized
manner prior to audit
• Receive, review and properly store all
documentation
INVESTIGATING MONEY
TRANSMITTERS
HOW IT ALL BEGINS…
An investigation can begin in more than
one manner:
• Self-initiated
• Informants
• Federal Referrals
• Licensees
WHAT NEXT…
• Conduct
surveillance to
validate all
information
• Identify all players
involved in an
investigation
• Subpoena bank
records
• Conduct covert
operations
• Conduct search
warrants
• Confrontation
“WE GOT A VISUAL”
Bird’s eye view
Packaged and ready to transmit
“The Office”
“The Company Car”
Yet another office
YOU SHOULD KNOW…
• Each of our
investigations, thus
far, has focused on
unlicensed activity
• None of our
licensees has been
the subject of an
investigation by the
Enforcement Unit
•
The objectives of
our investigation
are:
1. Consumer
Protection
2. Licensee
Protection
TO SUM IT ALL UP
Unlicensed money transmission is more
than just unlicensed money transmitting.
It lends itself to drug trafficking, money
laundering, human smuggling and
terrorist financing.
CONTACT INFORMATION
Stephen Prozeralik (410) 230-6390
[email protected]
Rollin Badal (410) 926-2353
[email protected]
Julio Hernandez (410) 767-0392
[email protected]