Asserting that every week he receives a call from Washington, the head of the U.S. Attorney’s Office in Puerto Rico, William Stephen Muldrow, warned international financial institutions and insurers operating on the island about the charges they would face for aiding - even if not directly - any organization associated with drug trafficking or that has been designated as a foreign terrorist organization by the administration of the president of the United States, Donald Trump.

Incidentally, he raised a flag by highlighting the low number of Suspicious Activity Reports (SARs) that international institutions operating in Puerto Rico have submitted to the authorities in recent times.

According to Muldrow, in fiscal year 2025, which ended last October, there were 50 international financial institutions and of these, 22 filed a total of 10 SARs or less.

In the past fiscal year, 17 of the organizations filed 10 SARs and the rest did not file any reports.

However, at one point, one of those institutions, Muldrow said, filed 120 suspicious activity reports, while it currently files fewer than 10.

“Maybe they eliminated all those clients or maybe something else happened,” he said, without elaborating on the reasons for the reduction.

All financial institutions, including credit unions, credit unions or federal cooperatives, as well as International Banking and Financial Institutions (EBIs and EFIs, respectively) operating in Puerto Rico are required to report any suspicious activity that may involve money laundering, fraud, corruption or financing of drug trafficking, among other crimes. Such possible criminal activity is documented in SARs, reports that are sent to the Financial Crimes Enforcement Enforcement Network or FinCEN, an agency of the U.S. Treasury.

Speaking to attendees at the Puerto Rico Financial Services Forum, Muldrow detailed what would be the consequences of banking support for organized crime.

“Risk mitigation is shaped by decisions you make every day. And that risk mitigation has a different meaning for everyone," said Muldrow, who stressed that he has been in the federal justice system for 37 years.

Muldrow, who for the past several years has been a guest speaker at the annual compliance summit held each year by the Puerto Rico International Bankers Association (Priba) and its counterpart, the Puerto Rico International Insurers Association (Priia), reiterated Tuesday that financial institutions must take steps to ensure that they are not knowingly or unknowingly supporting international terrorist organizations.

“Here’s what I suggest will make a difference for you. If the federal Department of Justice in Texas or Puerto Rico comes to your door or sends you an information request, if you’ve filed three SARs and you don’t have a compliance program that’s strong, I’m not sure there’s much we can do for you,” he said.

Upon assuming the presidency of the United States, one of President Trump’s first moves was to designate certain drug cartels as foreign terrorist organizations. Now, several Latin American organizations are considered terrorist organizations, including Venezuela’s Tren de Aragua, El Salvador’s MS-13, the Sinaloa cartel and Mexico’s La Nueva Familia Michoacana.

According to Muldrow, Puerto Rico is at a strategic point in this new approach by the federal Department of Justice.

“This new public policy not only focuses on traditional strategies, such as RICO or fraud charges. Now there is a great authority in the Department of Justice to file terrorism charges against those who support terrorist organizations,” he said. “There is a broader coordination with the international community, and Puerto Rico has the most strategic location in the Caribbean for this mission.

He explained that financial institutions could be held liable, not only for directly assisting these organizations, but also for facilitating any procedures, and even if they turn a blind eye to suspicious incidents that they decide not to investigate.

Before a packed room at a Convention District hotel in Miramar, Muldrow spoke to bank representatives about the issues they must watch out for to avoid helping cartels responsible for moving drugs such as fentanyl into U.S. territory.

The federal prosecutor included recommendations such as monitoring cash transactions, monitoring transactions made by alternate methods, reviewing contractual agreements, internal audits, hiring expert staff and risk management.

“The interest in our office (in Puerto Rico) is unprecedented. The (federal) Justice Department calls us every week to talk about how to curtail these cartels and target terrorist organizations. I have received more calls this year than in the past four years combined,” Muldrow said.

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This content was translated from Spanish to English using artificial intelligence and was reviewed by an editor before being published.