U.S. Increasingly Turning to Criminal Proceedings to Punish Banks for AML Shortcomings

By Matt Squire

U.S. authorities have unfairly escalated the penalties for Bank Secrecy Act violations by overusing criminal proceedings in cases that should be considered civil matters to be solved by regulators, legal professionals say. The Justice Department in the past five years has won a number of guilty pleas or reached deferred prosecution agreements in criminal cases involving financial institutions that failed to establish an anti-money laundering program or report suspicious activity. The willful failure to file a suspicious activity report (SAR) is a crime under the Bank Secrecy Act, but the federal government has discretion in deciding whether it is pursued...