Drug traffickers and other criminals are increasingly seeking out indirect relationships with community banks and credit unions to move and launder their illicit proceeds after being turned away by larger financial institutions, say sources.
Not all money transmitters are overly vulnerable to money launderers and terrorist financiers and banks should refrain from automatically closing their accounts, U.S. Treasury Department officials said Monday.
The U.S. Treasury Department's financial intelligence unit fined a now-defunct New Jersey money transmitter $125,000 for repeatedly and willfully violating Bank Secrecy Act requirements.
The annual number of suspicious activity reports filed by money services businesses fell by 14 percent in 2012 compared with the previous year, the U.S. Treasury Department said in a report Wednesday.
Dozens of small banks and credit unions have begun courting money services businesses over the past year, offering financial services to the high-risk clients in exchange for compliance-related fees.
A tiny Dover, New Jersey, credit must improve nearly every aspect of its anti-money laundering compliance program and undertake a potentially expensive look-back of the identities of its member base for the past seven years, according to a National Credit Union Administration order released Tuesday.