Fraud Prevention Blog

$160 Million Fine for Bank Secrecy Act Violations

Posted by Sean Trundy on Wed, Jun 30, 2010 @ 11:13 AM

counterfeit moneyIn a startling revelation yesterday, one of the largest U.S. banks admitted in court that a recently acquired retail bank division had failed to adhere to Bank Secrecy Act guidelines to detect and prevent money laundering by illicit organizations.

This short video by Bloomberg News summarizes the specific details of how over $378 Billion (yes, billion with a 'B') of Mexican drug cartel funds were laundered through the bank.





As an American citizen, I am appalled at the remarkable hubris exhibited by the bank employees. I understand profit maximization. I understand the pressures faced by corporations to improve shareholder value by squeaking every possible penny of revenues out of operations. I also understand that the people given decision-making responsibility over these activities are compensated according to how much money the bank "moves" through its corespondence banks.

But this was a complete disregard for community and country. This was people deciding that "me" was more important than "us". Frankly, I'm pretty upset about this.

If you watch the entire video, you'll hear at the very end that the U.S. Attorney has made a deal with this bank to "drop all charges" if they bring their correspondence banking practices within guidelines.

As a vendor of BSA Compliance Products, I can only hope that this and all other organizations that qualify as "financial institutions" as defined under the CIP guidelines of the BSA  will step-up and take seriously this vital component of our national security.

This time, it was drug money, but next time? It could be nuclear weapon money laundered by a terrorist group.   

Topics: regulatory compliance, anti-money laundering, bank secrecy act, fraud prevention