In Episode 20 of Kinectify Conversations, Sean Topchi hosts an in-depth discussion with Derek Ramm, Kinectify’s Global Head of Advisory Services, and Jim Lee, Global Head of Capacity Building at Chainalysis and former Chief of IRS Criminal Investigations. Jim Lee shares his extensive 30-year career journey within IRS-CI, where he played a pivotal role in leading some of the most significant financial crime investigations in recent history, including those involving cryptocurrency, darknet markets, and terrorist financing. Now in the private sector, Jim continues his mission to combat financial crime by leveraging cutting-edge blockchain technology and fostering critical public-private partnerships.

The episode offers a fascinating exploration of how financial crime has evolved over the years and the unique role IRS-CI plays in investigating complex financial crimes. Jim underscores the importance of BSA data, such as SARs (Suspicious Activity Reports) and CTRs (Currency Transaction Reports), in initiating and progressing criminal investigations, revealing that a significant percentage of IRS-CI’s cases are directly tied to these filings. The discussion also touches on the challenges and opportunities presented by the rapid growth of online gaming, sports betting, and the use of virtual assets, which have introduced new risks for AML efforts within the gaming industry.

Jim provides real-world examples of complex money laundering typologies involving international criminal organizations, casinos, and cryptocurrencies, illustrating the intricate methods used to launder money across borders. He emphasizes the need for collaboration between law enforcement and financial institutions to stay ahead of these sophisticated schemes and the critical role that public-private partnerships play in unraveling these complex transactions.

Through insightful commentary and real-world examples, this episode sheds light on the ongoing battle against financial crime and the innovative strategies being employed to safeguard the gaming industry. Jim’s expertise, coupled with his dedication to building capacity for financial crime fighters worldwide, provides a powerful narrative of resilience, collaboration, and the relentless pursuit of justice in an increasingly digital world. This episode is a must-listen for anyone interested in the intersection of technology, financial crime, and the gaming industry.

Click here to listen on Spotify.

Transcript

Sean Topchi: Welcome to Kinectify Conversations. My name is Sean Topchi, and I'm the Director of Business Development at Kinectify. Our mission is to share the experience, expertise, and insights from gaming industry leaders that comes from years of navigating the complexities and impact of compliance. On this episode, I am joined by special guest:

Derek Ramm: My name is Derek Ramm.

I'm the Global Head of Advisory Services at Kinectify.

Jim Lee: My name is Jim Lee. I'm the Global Head of Capacity Building at Chainalysis.

Sean Topchi: Thanks for joining us today and remember to like and subscribe to the podcast. You can also learn more anytime at Kinectify. com. That's K I N E C T I F Y dot com.

Welcome everybody to Kinectify Conversations. I am very excited for today's discussion. I've got two amazing guests: Kinectify's own Derek Ramm, our Global Head of Advisory services, and Jim Lee, recently retired IRS Criminal Investigations Chief now in a new role with Chainalysis today. I am really going to take a backseat and let these two gentlemen have a discussion based on their experience in the gaming industry, law enforcement, FIUs. It's extensive and they've got a lot they want to dive into today.

So, Derek, Jim, take it away.

Derek Ramm: Thanks, Sean. And thanks, Jim. It's great to have you on the podcast. You've had a really interesting career in law enforcement up until recently, and now you've jumped into the private sector. Maybe give us a bit of background on yourself and your path at IRS-CI?

Jim Lee: Yeah, thanks Derek. And thanks to Kinectify for having me. I did recently retire, but I was only retired for about eight days and I got right back into the crime fighting space. So, yeah, just a quick background. My law enforcement career spans 30 years.

I've lived all over the country in different roles. And IRS-CI, the government in general law enforcement, specifically IRS-CI, does a great job at developing individuals and I've benefited from it tremendously over the course of my career. Part of this development has to do with strong secession plan by the agency and intentionally putting people in places to develop. And when you talk about a secession plan, most companies have it.

I followed our path exactly how it was written just, quickly, I started off as an agent in Detroit where I did a lot of my investigative kind of boots on the ground investigative work, went down to Baton Rouge as a frontline supervisor.

I then came into our headquarters in Washington, D. C. and I did all things international policy and financial crimes in general. Took off out to Boston, I was our assistant special agent in charge in Boston. Went down to New Orleans as the special agent in charge, went to Chicago as a special agent in charge, and that's an executive role for us because that's one of our bigger offices.

I then came back into D.C. You notice I can't hold a job down guys. It's just a lot of different roles. I became our Strategy Director and that's really the business operations side of IRS Criminal Investigations. Started the learning process all over. It's that stuff that somebody else will do that. I then ran a region - the southern region and northern region after that.

That's where special agents in charge reported up to me, headquarters role. I then became our Deputy Chief. And then last yeah, roughly four years, I was our Chief of IRS Criminal Investigations where I led the division. So, 30 years, [with the] last four years leading, I'd be remiss if I didn't give you just a quick background, quick context to what IRS-CI is.

It's a division within the IRS. It's a criminal division in the civil agency. Criminal divisions, about 3500-3600 investigative personnel across a whole spectrum of disciplines. Many of the officers or special agents are embedded in federal law enforcement task forces all around the country.

A couple of fun facts. IRS-CI is the only U. S. law enforcement agency that can investigate federal income tax violations, and it's the only federal law enforcement agency that spends 100 percent of its time on financial crimes. So I'd ask your audience to think about this for a second. When I say financial crimes make a statement, all crimes are committed to make money.

And I'd ask your audience, can you think of any crimes that are committed for any other reason? And if you take random acts of violence out of the equation, it's pretty hard to think of one, right? So I bring this up because IRS-CI can get involved in all those types of cases.

Think about it. Narcotics, terrorist financing, national security. Human smuggling, child solicitation, gun trafficking, public corruption. The list goes on because they all involve money. That's the reason behind those crimes. So the division is really known as the world's premier financial investigators.

They're passionate about the mission and I was passionate about the role there.

Derek Ramm: Yeah. And I met you while you were Chief and actually had the privilege in my former career as well to work collaboratively with some of your agents at the time. And I guess maybe on that note you were there for four years, but IRS continues to advance the fight against financial crime.

Maybe you could talk about some of the achievements you had with your chief, some of the goals you had.

Jim Lee: Yeah, that's something that might be a separate session in and of itself. Cause again, it's a great division. Let me start off with one personal kind of achievement where I was deeply honored to be the recipient of the 2023 Presidential Rank Award for Distinguished Executive.

You know, I say that, but I'll also just as quickly say that that prestigious recognition [is] not just a reflection of my efforts over the course of a career. It's a reflection of the men and women that I was surrounded by and privileged to work with again. Incredibly proud of that mission.

The division, while I was sitting there as the Chief, was at the helm or at the lead during a number of complex financial investigations. In fact, some of the most significant in our story history, more than 100 years. Again, those investigations involve tax evasion, sanctions, evasion, money laundering, bribery, narcotics, international corruption...

Listen to the full episode on Spotify.

ABOUT KINECTIFY

Kinectify is an intelligence and risk management technology company serving gaming operators in the US and Canada. Kinectify's modern AML platform empowers clients to efficiently manage risk with real-time intelligence so they can focus on growing their businesses instead of being bogged down by compliance. In addition, Kinectify's advisory services enhance gaming operators' capacity with industry experts who can design and test programs, meet compliance deadlines, and even provide outsource services for the day-to-day administration of compliance programs.

To learn more about Kinectify and book a demo, click here.