James H. Freis Jr. (born October 27, 1970) is an American lawyer and financial industry executive who from 2007 to 2012 served as the United States Department of the Treasury's 6th Director of the Financial Crimes Enforcement Network (FinCEN), where he expanded the scope of the anti-money laundering regulations and became known for spearheading efforts to combat fraud and implementing modern data analysis. He was an attorney and central banker at the Federal Reserve Bank of New York and the Bank for International Settlements.
From 2014 to 2020, he was the Group Chief Compliance Officer of the Deutsche Börse Group, Europe's largest provider of systemically significant financial market infrastructures. In June 2020, he joined Wirecard AG, where he is credited for promptly substantiating and initiating actions to stop the largest financial fraud in Germany's modern history, known publicly as the Wirecard scandal.Wirecard: The Downfall of a German Fintech Star at Harvard Business School; by Jonas Heese, Charles C.Y. Wang, Tonia Labruyere; published March 2021; retrieved May 8, 2022 Since 2021, he has been active with fintech and startup companies.MoonPay Hires Wirecard Whistle-Blower CEO James Freis as Adviser at Bloomberg; by Hannah Miller; published March 21, 2022; retrieved May 8, 2022
Early life and education Freis was born in Aberdeen, Maryland, to James Henry Freis and Maria Freis, and raised in Metuchen, New Jersey, where he attended St. Joseph High School."140 seniors win Byrd scholarships", Courier News, June 19, 1988. Accessed December 24, 2020, via Newspapers.com. "Middlesex County: James Freis of Metuchen, St. Joseph's High School" His mother is a retired nurse and social worker. His father, who died in August 2020, was a first-generation student at St. Peter's College, graduating cum laude in 1966. He graduated in 1969 from Villanova Law School, before departing to Germany with the U.S. Army from 1970 to 1972. Freis Sr. spent his career practicing corporate law with a single law firm, which later became Drinker Biddle & Reath through mergers.James Henry Freis, Esq. Obituary; published 2020; retrieved November 30, 2020Drinker Biddle, with two NJ offices, to merge with Faegre Baker Daniels at NJ Biz; by Gabrielle Saulsbery;published December 18, 2019; retrieved December 12, 2020
Freis attended Georgetown University, graduating magna cum laude in 1992 with an A.B. in economics with honors and government/international relations, a certificate in German area studies and Phi Beta Kappa. While at Georgetown, he competed on the varsity heavyweight rowing crew. He then earned his Juris Doctor cum laude from Harvard Law School in 1995. While at Harvard, Freis was a Senior Editor of the Harvard Environmental Law Review. He became a Chartered Financial Analyst charterholder in 2002.Financial Innovation and Market Structure at CFA Institute; by Ron Rimkus; published May 1, 2015; retrieved December 12, 2020
After graduating from Harvard, Freis served as a fellow of the Robert Bosch Foundation in Germany. From 1995 to 1996 he worked in the German Federal Banking Supervisory Office in Berlin and Bayerische Vereinsbank, a German universal bank in Munich.
Early career Federal Reserve Bank of New York Freis joined the Federal Reserve Bank of New York's legal department as an Attorney in 1996,Secretary Paulson Names James H. Freis, Jr. as the New Director of FinCEN at U.S. Department of the Treasury; published March 5, 2007; retrieved December 12, 2020 where he advised on financial market regulations, payment and settlement system issues at wholesale and retail levels, and foreign government and central bank accounts. He worked on the successful defense before the Iran–United States Claims Tribunal of claims brought against the Bank by the Central Bank of Iran arising out of the hostage crisis.BANK MARKAZI IRAN V. THE FEDERAL RESERVE BANK OF NEW YORK at Jus Mundi; published November 16, 1999; retrieved December 12, 2012Report From The President at NewYorkFed.org; by William J. McDonough; published 1999; retrieved December 12, 2020
Bank for International Settlements In 1999, Freis moved to Basel, Switzerland and became Senior Counsel in the Legal Service at the Bank for International Settlements, an international organization known as the "bank for central banks." There he supported the provision of financial services to central banks; advised on international law such as privileges and immunities; and supported the Basel-based experts’ committees of global financial standard setters, through 2005.
United States Department of the Treasury Freis joined the United States Department of the Treasury in September 2005 as the first-ever Deputy Assistant General Counsel for Enforcement & Intelligence. Freis provided legal support and helped staff the Treasury's Office of Terrorism and Financial Intelligence which was created in 2004, including supervising the legal counsel to the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, and the Treasury Executive Office for Asset Forfeiture.
Freis served as lead negotiator on behalf of the United States Government on sensitive counter-terrorism programs and contributed to the Terrorist Finance Tracking Program, and was also responsible for developing international financial measures against rogue states, such as part of Treasury's efforts against IranTestimony of Stuart Levey at Federal Register; published November 18, 2011; retrieved December 12, 2020Stuart Levey's War at New York Times; by Robin Wright; published October 31, 2008; retrieved December 12, 2020 and North Korea.Success in Macau Bank Case Demonstrates Reach of U.S. Sanctions at New York Times; by Steven Weisman; published June 26, 2007; retrieved December 12, 2020The Ripples of Punishing One Bank at New York Times; by Steven Weisman; published July 3, 2020; retrieved December 12, 2020Bank Blocks Plan to Release Frozen Funds to North Korea at New York Times; by Donald Greenless; published March 27, 2007; retrieved December 12, 2020
Financial Crimes Enforcement Network (FinCEN) Freis was appointed Director (CEO) of the Financial Crimes Enforcement Network (FinCEN) on March 5, 2007, by United States Secretary of the Treasury Hank Paulson. At the time, FinCEN's mission was "to safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity."Annual Report 2007 at FinCEN.gov; published 2007; retrieved December 12, 2020 FinCEN had faced criticism from the financial industry over difficulties of complying with anti-money laundering regulations,In Focus: Full Plate to Greet Fincen's New Director at American Banker; published April 9, 2007; retrieved December 12, 2020 which had been expanded in 2001 under USA PATRIOT Act, Title III. On June 22, 2006, Secretary Paulson visited FinCEN and together with Director Freis launched initiatives to improve FinCEN's Regulatory efficiency and effectiveness.Secretary Paulson Visits FinCEN at U.S. Department of the Treasury; published June 22, 2007; retrieved December 12, 2020
Freis also oversaw FinCEN's broad IT Modernization Program to collect, analyze, and share data collected under FinCEN's regulatory authority, estimated to cost $120 million. While earlier FinCEN IT projects had failed, under Freis the modernization project was managed on time and budget.
On the regulatory front, Freis expanded cooperation with State financial services regulators,CSBS Newly Elected Chairman Underscores State-Federal Coordination at Financial Crimes Enforcement Network; published May 24, 2012; retrieved December 12, 2020 and he expanded FinCEN's regulations to non-bank mortgage lenders,Fincen Requires Non-Bank Mortgage Lenders To Develop AML Programs at The Wall Street Journal; by Samuel Rubenfeld; published February 7, 2012; retrieved December 12, 2020 Fannie Mae and Freddie Mac,Fincen Proposes AML, Reporting Rules For Fannie, Freddie at The Wall Street Journal; by Samuel Rubenfeld; published November 3, 2011; retrieved December 12, 2020 and initiated the rules for investment advisors.Fincen Developing AML Rules For Advisers at The Wall Street Journal; by Samuel Rubenfeld; published November 16, 2011; retrieved December 12, 2020 He amended the regulations for money services businesses and in July 2011, issued regulations for "prepaid access.FinCEN Issues Prepaid Access Regulations at The Wall Street Journal; by Samuel Rubenfeld; published July 26, 2011; retrieved December 12, 2020Additional Records at Federal Register; published July 22, 2011; retrieved December 12, 2020" The latter changes formed the basis for FinCEN regulation of virtual currency.On the Silk Road: the Dark Side of Cryptocurrencies at New America; published February 12, 2014; retrieved December 14, 2020Lawmakers And Regulators Take A Closer Look At Bitcoin at Diane Rehm Show; published November 19, 2013; retrieved December 14, 2020VC3: former FinCEN director James Freis is talking at the Bitcoin regulation conference on August 14th at 99 Bitcoins; by Maria Santos; published January 2, 2018; December 14, 2020 In testifying before the Congress, Freis explained, "Recognizing that payment systems evolve rapidly,... The rule was developed to be technologically neutral and hopefully cover new developments for years to come."THE FUTURE OF MONEY: WHERE DO MOBILE PAYMENTS FIT IN THE CURRENT REGULATORY STRUCTURE? at House Committee on Financial Services; published June 29, 2012; retrieved December 14, 2020
Freis initiated rulemaking requiring financial institutions to collect information on beneficial owners of accounts.FinCen Releases Plan Targeting Beneficial Ownership at American Banker; by Kate Davidson; published February 29, 2012; December 14, 2020 The final rule was issued in 2016, at which time President Obama in referencing the regulation “call[ed] on Congress to pass new legislation that requires all companies formed inside the United States to report information about their real owners to the Treasury Department's Financial Crimes Enforcement Network.U.S. Gives Banks More Time To Identify Corporate Owners at The Wall Street Journal; by Samuel Rubenfeld; published May 6, 2016; retrieved December 14, 2020Remarks by the President on the Economy at The Obama White House; published May 6, 2016; retrieved December 14, 2020" On December 11, 2020, Congress mandated the remaining component of the decade old policy proposal, by including in the National Defense Authorization Act of 2021 a chapter expanding FinCEN's powers, most prominently requiring companies to disclose information about their beneficial owners which would be available to law enforcement through a national database to be developed and maintained by FinCEN.Congress Approves Anti-Money-Laundering Measure at The Wall Street Journal; by Jack Hagel and Ian Talley; published December 11, 2020; retrieved December 20, 2020 Freis also initiated rulemaking to implement a Congressional mandate to collect data on cross-border electronic transfers of funds, which was supported by law enforcement but faced criticism from the financial industry for potentially collecting too much data, and which has not yet been implemented.FinCEN Wants Banks To Report Every Cross-Border Transaction at The Wall Street Journal; by Samuel Rubenfeld; published September 27, 2010; retrieved December 14, 2020Money transfers could face anti-terrorism scrutiny at The Washington Post; by Ellen Nakashima; published September 27, 2010; retrieved December 14, 2020Proposal Would Expand Reporting of Money Transfers at New York Times; by Sewell Chan; published September 29, 2010; retrieved December 14, 2020