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OCC’s Failure to Cite Wachovia for AML Violations Angers Law Enforcement, Spurs Change at Agency
By Brian Monroe
printFederal bank examiners failed for at least four years to identify widespread signs of money laundering at Wachovia Bank, frustrating officials who helped levy a $160 million penalty against the institution last week. Wells Fargo & Co., the parent company of Wachovia Bank since December 2008, agreed to a March 17 deferred prosecution agreement for not sufficiently scrutinizing $420 billion in transactions involving Mexican foreign currency exchange businesses suspected of drug cartel ties. The penalty is the largest ever levied for anti-money laundering (AML) violations. The U.S. Treasury Department's Office of the Comptroller of the Currency (OCC), which sought $50...
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Without the threat of larger monetary settlements or prosecutions, financial institutions have little economic incentive to seriously enforce their anti-money laundering compliance controls, according to Peter Reuter, a professor in the Department of Criminology at the University of Maryland.
A growing number of compliance professionals expect that someone at a bank, even a compliance officer, will be prosecuted for violating the Bank Secrecy Act in the not-too-distant future.
In the wake of regulatory crackdowns and multiple criminal probes, financial institutions operating in Mexico are spending millions of dollars to upgrade their anti-money laundering programs, say bank staff.
A U.S. District Court judge Wednesday signed an order ending Wachovia Bank's deferred prosecution agreement with the U.S. Justice Department for failing to identify transactions potentially tied to drug cartels.
Internal clashes at Wachovia Bank over whether a corporate client or its customers were likely laundering money preceded the tip-off that contributed to the United States' decision to levy the largest-ever anti-money laundering fine, according to a former bank compliance officer.
Dozens of U.S. banks along the country's southern border are denying new accounts to wealthy Mexican nationals and corporations because of due diligence troubles caused by drug-related violence in Mexico.
A provision in the Senate's proposed financial overhaul bill could incentivize more anti-money laundering compliance officers to blow the whistle on any illegal activities of their employers in exchange for large payouts.
The U.S. Treasury Department is reportedly investigating the role of Wachovia Bank compliance staff in the financial institution's failure to sufficiently scrutinize more than $420 billion in transactions tied to Mexican currency exchange businesses.
If March's record penalty against Wells Fargo & Co. has reminded compliance departments of the bite of anti-money laundering regulatory fines, it has also been a reminder of something else. With acquisitions come problems.
Wells Fargo & Co., the parent company of Wachovia Bank, will pay $160 million to settle anti-money laundering compliance problems tied to accounts with Mexican currency exchange companies, the company said Wednesday.
An expected settlement between the U.S. Justice Department and Wachovia Bank over lax anti-money laundering policies is highlighting the compliance risks of doing business with Mexican currency exchange companies.
Wachovia Bank will pay up to $125 million to compensate victims of a telemarketing fraud conducted through accounts at the bank and a $10 million civil penalty under agreements reached with the Office of the Comptroller of the Currency.
Wachovia Bank, which U.S. authorities have connected to a Mexican exchange house allegedly involved in a money laundering operation, is terminating its correspondent relationships with all money services businesses based outside the United States.
Two Mexican exchange houses transferred money through U.S.-based banks that was used to buy aircraft for transporting more than $1 billion worth of cocaine, the Mexican government said this week.
The bank will forfeit $21.6 million in a deferred prosecution agreement with the U.S. Justice Department and pay a $10 million penalty for failing to adequately monitor a Mexican money transfer business that moved millions of dollars in illegal drug proceeds through the bank.
Facing possible regulatory sanctions for continued compliance deficiencies, Union Bank of California has created the new position of chief risk officer responsible for overseeing anti-money laundering and risk compliance reporting companywide.
The Federal Reserve Bank of New York announced this week their signing of a written agreement to enhance anti-money laundering controls at the Union Bank of California International in New York (UBOCI).