News
Two Financial Institutions with Troubled Compliance Histories Hire AML Bigwigs
By Brian Orsak and Brian Monroe
printAmerican Express and Wachovia Bank, two institutions with recent money laundering troubles, have hired seasoned Bank Secrecy Act officers to bolster their compliance efforts. Rick Small, head of global compliance at GE Money, will join American Express Co. this month as vice president of anti-money laundering and sanctions risk management. Charlotte, North Carolina-based Wachovia Bank has hired Dan Soto, former chief compliance officer of Raleigh, North Carolina-based RBC Centura, to head its AML efforts. Both moves follow a difficult year with regulators for the institutions that have translated into compliance department shake-ups. "By making a high profile hire, it shows...
TO READ THE FULL STORY
Related News
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.
Wachovia in Philadelphia rejected a payment destined for a "Specially Designated Global Terrorist," on or about October 29, 2004, instead of blocking the payment, according to OFAC.
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 $1.1 billion sale to U.K. bank Standard Chartered PLC follows enforcement actions issued in August requiring American Express Bank Ltd., the American Express private banking subsidiary, to pay $65 million in penalties and acknowledge its responsibility for AML and Bank Secrecy Act failures.
But the bad news continued this week for the company as its American Express Bank Ltd. unit reached an agreement on Tuesday with the New York State Banking Department to improve its AML regime.
The penalty, the largest against a U.S. institution for AML violations, resulted from a four-year investigation of a Colombian narcotics and money laundering operation.
A senior DEA official confirmed that the agency is investigating the company's Miami-based private banking unit and said the case involves money laundering schemes known as black market peso exchanges, according to a report slated for publication in the July issue of Forbes.
The private banking unit is overseen by the company's Miami-based American Express Bank International, and has been plagued by anti-money laundering related regulatory trouble for more than a decade.
American Express Co. has set aside $60 million for regulatory and legal matters related to a U.S. Justice Department investigation of anti-money laundering compliance programs at its private banking operation.