Regulators hit Miami Gardens credit union with cease and desist order

 

 

By Brian Bandell

South Florida Business Journal

Federal regulators issued a cease and desist order against North Dade Community Development Credit Union for violations of anti-money laundering laws.

Such enforcement actions against credit unions are rare. This is the only cease and desist order issued by the National Credit Union Administration (NCUA) so far this year.

The credit union has only $5.8 million in assets. It was “well capitalized” on June 30, an improved from its “undercapitalized” status a year ago.

The NCUA order on Aug. 29 gave it 30 days to suspend all transactions for money services businesses that aren’t within its geographic area of membership. Credit unions are only allowed to deal with customers in pre-defined geographic areas. In the case of North Dade Community Development, the area is the north-central part of the county.

The regulatory order also told the credit union to stop all business with money service businesses until it implements adequate Bank Secrecy Act, anti-money laundering and Office of Foreign Asset Control (OFAC) compliance. This includes establishing criteria for identifying high-risk members, detecting when transactions involved prohibited countries or individuals, and timely filing suspicious activity reports and currency transaction reports.

It was given 30 days to find an employee responsible for this job, conditional upon approval by regulators

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at:

http://.launderingmoney.com and on twitter at: http://twitter.com/#!/LaunderingMoney also on http://moneylaunderingworld.blogspot.com

FinCEN: Suspected Terrorist Financing, Money Laundering up in 2010

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said suspicious activity reports (SARs) categorized as Terrorist Financing and BSA/Structuring/Money Laundering rose considerably in 2010 compared with 2009. Terrorist Financing SARs rose 30%; Money Laundering filings, after declining in 2009, increased 9%.

The SAR Activity Review—By the Numbers, Issue 16, said total filings to the Bank Secrecy Act (BSA) database in 2010 increased 3.5%. The overall increase was driven by a 12% rise in the number of SARs originating from non-depository institutions. The semiannual report said filings by non-depository institutions represented 47% of all 2010 SARs, up from 44% in 2009.

Depository institutions actually reported 3% fewer SARs than in 2009. Bucking the overall decline in this category was a 4% increase in reports from depository institutions whose primary federal regulator is the National Credit Union Administration (NCUA). Reports from depository institutions that the NCUA does not oversee declined.

Mortgage Loan Fraud (MLF) SARs rose 5% in 2010. MLF SARs have increased every year since 2001, and reports from 2009 and 2010 represent 39% of all MLF SARs filed since 2001. Reports of Computer Intrusion fell 26% after the same category saw a 52% jump from 2008 to 2009.

Filings from Money Services Businesses (MSBs) increased 12% to an all-time high of 596,494 SARs in 2010. Gaming establishments posted a 16% increase in filings to 13,987. Card Clubs alone saw a 180% rise, from 252 references in 2009 to 707 in 2010.

FinCEN also released The SAR Activity Review—Trends, Tips & Issues, which focuses primarily on foreign corruption, including identifying and reporting on suspicious activities involving senior foreign political figures. The “Trends & Analysis” section leads with an overview of corruption-related SAR filings covering 2009 and 2010, followed by articles that take a more focused look at aspects of these filings.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney

Feds closing in on HSBC in money laundering probe

The Justice Department's money-laundering probe against banking giant HSBC Holdings Plc is looking at possible prosecution of individual bankers, a source close to the investigation said on Thursday.

By Bret Wolf
Reuters


The source, who has direct knowledge of the probe which was disclosed last year, said it is moving slowly in part because of the close examination for potential individual prosecutions. He did not name any targeted individuals.

"I understand they are meticulously doing interviews with one primary objective driven by the Justice Department on this case, which is to identify and prosecute any individuals within the bank for which the evidence will support such an action. Prosecuting individuals is their number one priority," the source said on condition of anonymity.

The Justice Department probe is linked to bulk cash the bank received from money-changing firms in Mexico, the source said. The concern is that the bank may have handled money belonging to the Mexican drug cartels.

HSBC spokesman Rob Sherman declined to comment on the status of the investigations. "As we've indicated in our filings, we are subject to certain investigations by government authorities. In all cases, we're cooperating and seeking to resolve these matters," Sherman said.

The Justice Department was heavily criticized last August after reaching a deal to allow Barclays Bank to settle charges that it violated U.S. sanctions laws by forfeiting $298 million. While the federal judge overseeing the case ultimately approved the pact, he first dubbed it a "sweetheart deal" and questioned why the bank officials responsible were not held to account.

The judge's comments reflected a growing concern, on Capitol Hill and elsewhere, that banks found to have violated U.S. money laundering or sanctions laws can absolve themselves by simply writing a check. The concern is that such a system makes these payments a cost of doing business and does not deter such crimes.

In October, a group of federal regulators disclosed enforcement actions against HSBC North American Holdings Inc and HSBC Bank USA. The regulators obliged the bank to improve its compliance risk-management program, including its anti-money laundering compliance regime, but did not at the time issue a fine.

One of the regulators involved, the Office of the Comptroller of the Currency, stated that the bank "had deficiencies with respect to suspicious activity reporting, monitoring of bulk cash purchases and international funds transfers, customer due diligence concerning its foreign affiliates, and risk assessment with respect to politically-exposed persons and their associates."