• Bank Gets $15M Penalty Over Inadequate Compliance Program
  • November 22, 2012 | Authors: Gabriel Caballero; Andres A. Fernandez; Marina Olman; Clemente L. Vázquez-Bello
  • Law Firm: Gunster - Fort Lauderdale Office
  • The Federal Deposit Insurance Corporation (FDIC) and the Financial Crimes Enforcement Network (FinCEN) recently assessed concurrent civil money penalties of $15 million against the First Bank of Delaware (the “Bank”) for violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws and regulations.

    The Bank also settled civil charges brought by the U.S. Department of Justice, U.S. Attorney’s Office for the Eastern District of Pennsylvania on related activities.

    The Bank was assessed a $15 million penalty because the FDIC and FinCEN determined that the Bank failed to implement an effective BSA/AML Compliance Program with internal controls reasonably designed to detect and report evidence of money laundering and other suspicious activity.

    Specifically, the Bank failed to:

    • Adequately oversee third-party payment processor relationships;

    • Adequately oversee high-risk MSB customer relationships;

    • Effectively detect and report suspicious activity;

    • Conduct adequate independent testing for compliance;

    • Designate a BSA Officer to ensure effective day-to-day compliance; and

    • Adequately provide training for appropriate personnel.

    Financial institutions should not underestimate the importance of implementing an effective BSA/AML Compliance Program. Failure to do so can be costly and result in substantial penalties.

    Now is a good time to review your institution’s BSA/AML compliance programs.