Blog Posts: Anti-Money Laundering
Despite the financial sector's huge investment in anti-money laundering (AML) programs, "AML drift" continues to result in substantial fines and regulatory action against US and foreign banks, according to new report by PwC.
A check-cashing company and its owner pleaded guilty to violations of the Bank Secrecy Act arising from their failure to follow anti-money laundering reporting requirements with respect to more than $19 million in check-cashing transactions, the Department of Justice (DOJ) announced. The plea agreement requires defendants Craig Panzera and his check-cashing business, Belair Payroll Services Inc., to forfeit $3.2 million and Panzera to pay restitution of nearly $1 million.
Money laundering — the practice of disguising the true origin and ownership of cash through legitimate ventures — appears to be alive and well in at least one of America's fast-food destinations. Federal investigators recently accused the owner of three McDonald's franchises of using the restaurants launder drug money.
Anti-money laundering settlements rocketed to $3.5 billion in 2012, up from $26.6 million in 2011, according to the Association of Certified Anti-Money Laundering Specialists. The settlements are just one sign of an unprecedented U.S. government anti-money laundering crackdown.
Europe's largest bank, HSBC Holdings PLC, agreed to pay $1.9 billion and has admitted to violations of U.S. anti-money laundering laws under an agreement approved by a federal judge in New York earlier this month. It is the largest penalty ever imposed on a bank.
Federal prosecutors have accused Liberty Reserve, a global currency exchange incorporated in Costa Rica, with running a $6 billion online money-laundering operation. Officials arrested seven individuals in the case and charged each with money laundering, operating an unlicensed money-transmitting business and conspiracy to operate such a business. The money-laundering charge carries a maximum of 20 years in prison and the other two charges carry a maximum of five years each.
The Financial Crimes Enforcement Network (FinCen), an arm of the U.S. Department of Treasury, recently issued guidance that applies the Bank Secrecy Act’s anti-money-laundering rules to “virtual currency” -- digital currency exchanged on the Internet. The Treasury Department released the interpretation in response to growing concerns among regulators and financial institutions that virtual currencies are being used for illegal activities.
Dallas-based money service business MoneyGram International, Inc. recently agreed to pay $100 million to settle fraud charges filed by the U.S. Justice Department (DOJ) against the company for its role in mass marketing and wire-fraud schemes.
Money laundering has long been a concern of organizations that handle cash. Money service businesses (MSBs) are particularly at risk of running afoul of anti-money laundering (AML) laws. The U.S. Department of Treasury has issued guidelines to help MSBs comply with federal regulations, but the guidelines are complex and can be difficult to understand.