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Anti-money laundering staff operate in a gray area when deciding whether and how to serve suspected or convicted criminals who receive federal clemency, such as former President Donald Trump’s campaign adviser Steve Bannon.

Trump pardoned Bannon, who served as White House chief strategist until August 2017, of charges of fraud and money laundering on Jan. 19, his last full day in office. The decision immediately quashed the federal government’s case against Bannon, perhaps the highest-profile recipient of the approximately 145 pardons that the former president made during his term.

Federal prosecutors in Manhattan accused Bannon and three associates in August of embezzling $1 million from “We Build the Wall,” a grassroots-turned-nonprofit campaign that purported to raise funds for the construction of a reinforced barrier between the U.S. and Mexico. Bannon denied the accusations and was out on bail when Trump issued the pardon.

But as far as compliance officers are concerned, a pardon does not equate to an acquittal or voluntary dismissal of charges in response to a lack of evidence, said Dan Stipano, a former senior official with the Office of the Comptroller of the Currency.

“Financial institutions should assess the risks posed by a pardoned individual as they would with anyone else,” Stipano, now a partner at Davis Polk & Wardwell in Washington, D.C., wrote in an email. “The pardon itself should not have much impact on the risk profile, as it does not speak to that person’s guilt or innocence.”

Bannon allegedly funneled the $1 million through at least one account held in the name of a separate nonprofit entity he controlled, then used the funds to pay one of his associates and cover hundreds of thousands of dollars in personal expenses and credit card debt.

That Bannon was accused of financial crimes should automatically place him in any bank’s high-risk group and trigger enhanced due diligence and more resource-intensive monitoring, which raises the question of whether the benefits of the relationship outweigh its monetary and reputational costs, said a senior compliance officer for a California-based lender.

“Having been pardoned for a crime that he was not convicted of committing lends to interpret that he was guilty of the crimes he was accused of, or it gives the appearance of such,” the senior compliance officer said on condition of anonymity. “It is hard to imagine that a bank would find the value greater than the risk.”

Republican fundraiser Elliott Broidy, who admitted in October to concealing that he lobbied the Trump administration on behalf of Malaysian officials to drop the graft probe into 1MDB, also received clemency last month.

Trump also pardoned Randall “Duke” Cunningham, a former Republican lawmaker from California who resigned from the House of Representatives in 2005 after pleading guilty to taking nearly $2.5 million in bribes from defense contractors; and Kwame Kilpatrick, a former Democratic mayor of Detroit convicted in 2013 of extortion, bribery and fraud.

Clemency does not technically “wipe out” a conviction, which remains a matter of record until the felon seeks and obtains a court order to expunge it, said Frank Mayer, a former senior attorney for the Federal Deposit Insurance Corp.

Bannon’s pardon applies only to federal charges that have already been brought, leaving the door open for U.S. prosecutors to go after him for other alleged offenses, such as mail or wire fraud, and for state authorities to prosecute him under the statutes available to them, Mayer, now an attorney with Stevens & Lee in Philadelphia, wrote in an email.

Investigators in the Manhattan District Attorney’s Major Economic Crimes Bureau are determining whether sufficient evidence exists to open their own case against Bannon, the Washington Post reported Feb. 2.

“Having said this, it is possible to provide banking services to Steve Bannon or even a former felon” if an institution can ensure that “this type of high-risk account can be effectively monitored and managed,” Mayer wrote.

Contact Valentina Pasquali at vpasquali@acams.org