U.S. compliance officers are seeking to unearth any links their institutions may have with New York attorney Michael Cohen following reports that he illegally paid an adult film actress to not discuss her alleged affair with a high-profile client, U.S. President Donald Trump, say sources.
FBI agents searched Cohen’s Manhattan office and hotel room on April 9 for emails and other records outlining his role in the 2016 U.S. presidential election, as well as for details on an October 2016 wire transfer he acknowledged having sent to Stephanie Clifford, also known as Stormy Daniels, The New York Times reported.
Twelve days before the election, Cohen, according to Clifford, paid her $130,000 for agreeing not to disclose her alleged sexual encounter with Trump in 2006. Cohen says he only “facilitated” the payment, made it with his own money and broke no laws in doing so.
The latest flurry of negative news surrounding Trump and his associates prompted a European bank with U.S. operations to review its entire dataset for any transactions or accounts that may be linked to Cohen, a New York-based compliance officer told ACAMS moneylaundering.com.
The search, which commenced earlier this month and is ongoing, also encompasses any cross-border payments and real estate acquisitions made through accounts held by shell companies, said the compliance officer, who asked not to be named.
A large, East Coast-based regional bank has already finished examining transactions and accounts for potential ties to Cohen, an anti-money laundering compliance manager at that institution said.
The regional lender’s internal investigation began in February after reports of Cohen’s alleged payments to Clifford hit the newswires and raised concerns from senior managers.
“Even if there are no money laundering issues, you want to make sure,” the compliance officer for the regional lender said on condition of anonymity. “When there’s that level of reputational risk, you want to do a deeper dive.”
Global banks have already conducted highly sensitive investigations into other Trump associates and members of his administration, moneylaundering.com reported in July.
Those reviews, unprecedented in scope, centered on Trump’s former campaign chief Paul Manafort and former National Security Advisor Michael Flynn, and involved scanning for any funds moving from or through Russia and Eastern Europe, sources said at the time.
The previous round of Trump-related due-diligence investigations did not focus on Cohen, but now “everybody’s getting caught up in those headlines,” the U.S.-based compliance officer for the European bank said.
Cohen allegedly used an account at First Republic Bank held by Delaware-incorporated firm, Essential Consultants LLC, to wire $130,000 to a client-trust account at City National Bank in Los Angeles held by Clifford’s attorney at the time, Keith Davidson, The Wall Street Journal reported last month.
First Republic Bank considered the payment unusual enough to warrant the filing of a suspicious activity report to the U.S. Treasury Department, and City National Bank launched its own investigation into the source of the funds, according to the news outlet.
The growing scandal surrounding Cohen and his financial activity illustrates the risks financial institutions take when providing services to “close associates” of politically exposed persons, a U.S.-based senior compliance officer for a second global bank said.
“The conclusion I drew was that you cannot get away from the FCC [financial crime compliance] concerns” generated by Trump and his associates, he said. “You have to be looking at anyone in his orbit … you may want to go back over 10 years and ask, ‘Who is this person?’”
|Topics :||Anti-money laundering , Counterterrorist Financing|
|Source:||U.S.: Law Enforcement|
|Document Date:||April 27, 2018|