Gibraltar Hit With Regulatory Action For

Gibraltar hit with regulatory action for secrecy act and anti-money laundering violations

Coral Gables-based Gibraltar Private Bank & Trust was hit with two separate penalties related to compliance with the Bank Secrecy Act and anti-money laundering, regulators said Thursday.

The announcements follow a controversy earlier this week against the bank, which has assets of US $ 1.6 billion at December 31
The sanctions are the latest incidents related to the Ponzi scheme Scott Rothstein $ 1.2 trillion. Rothstein, an investor in Gibraltar, is serving 50 years behind bars.

Network Financial Crimes Enforcement said "there are grounds" for a civil penalty $ 4 million against Gibraltar by "violations of compliance laundering money laundering intentional". The bank admitted the facts described by FinCEN in the document prescribed.

Also Thursday, the Office of the Comptroller of Currency announced a civil penalty of $ 2.5 million against Gibraltar for violations of the BSA, at the same time, release the bank consent previous orders. FinCEN cites the earlier findings of the OCC that Gibraltar had violated the following regulatory requirements of the BSA orders that need to improve their programs. The payment of $ 2.5 million to $ 1.5 OCC and FinCEN meet evaluation.

CEO of Gibraltar Adolfo Henriques told the Business Journal that the bank is satisfied that the judgment consent order resolves the OCC.

FinCEN found that Gibraltar has not implemented adequate BSA and AML compliance procedures. As a result of these failures, the bank lost red flags associated with the account including Rothstein Rothstein used his account of millions of dollars in remittances in round large amounts of dollars, which is indicative of a Ponzi pattern, as FinCEN.

Gibraltar "deliberately violated the program requirements reporting and recordkeeping BSA February 2008 to October 2014," according to FinCEN.

The bank does not implement and maintain an adequate AML program, develop a program to identify the right customer, etc., according to the regulator. These deficiencies eventually led to the lack of reporting 120 red flag, or suspicious activity reports (SAR), in relation to almost $ 558 million in transactions.

Part of the failure of Gibraltar was due to a large volume of alerts generated by the bank's compliance system, which meant that the BSA bank analysts were unable to time or adequately consider all alerts, FinCEN said. Between August 2013 and the end of July 2014, Gibraltar is not to review and process nearly 60 percent of their monthly alerts, he said. The regulator also found that Gibraltar alerts that should have been closed higher and resulted in the filing of a SAR

"Gibraltar has allowed the investigation and languishing submit a report of suspicious activity in activities after information about the activities Rothstein Rothstein appeared in the media," according to FinCEN.

Gibraltar agreed that none of his lawyers, agents, partners, directors, or any person authorized to speak on behalf of the bank to make a public comment that contradicts the assessment of FinCEN.

"All these deficiencies Scott Rothstein allowed - that appeared on paper to launch a law firm successfully - to use the bank for the purpose of operating a massive Ponzi scheme," said founder Andrew Ittleman and based partner Miami Fuerst Ittleman David and Joseph. "This type of program" paper "is very common among regulated companies, but as this case shows, the government is taking more public measures to remove them and put actual performance every time."

The other half of Thursday Gibraltar regulatory discipline came from the OCC, which found that the bank did not properly ensured the timely submission of reports SAR after the regulator ordered to improve compliance in 2010 and 2011.

These actions respond to the recent news that former CEO Steven Hayworth Gibraltar follows the bank for $ 40 million in damages for breach of employment contract and fraud.

In April 2015, Gibraltar has revealed that he was being investigated by the US Attorney's Office and the Department of confiscation of the property of the section of justice and money laundering BSA and AML.