US Bank to pay more than $600 million over federal charges it had lax anti-money laundering controls
US Bancorp failed to monitor suspicious transactions and other activities on money laundering issues were completed, and workers tried failures of regulators, federal prosecutors in New York, hiding Thursday.
In a particularly extreme example, say federal prosecutors that the bank's anti-money laundering watchdogs looked up from the other side as a customer named Scott Tucker used several accounts for money laundering. wrongly obtained a fraudulent payday loan system.
The government says the US bank "deliberately" failed to report the suspicious activity in time. Tucker was sentenced last year to the Federal Court of New York to administer the illegal payment system, and in January he was sentenced to more than 16 years in prison.
The Minneapolis-based bank, the country's fifth-largest bank, will pay a total of $ 613 million, including $ 528 million in a deferred prosecution agreement with the Manhattan prosecutor, who announced that two cases of corporate secret infringement banking
The agreement also includes the Office of the Comptroller of the Currency, the Federal Reserve Board and the Financial Crime Network of the Ministry of Finance.
The US bank will reform its compliance and monitoring program and has accepted responsibility for its behavior, said the US lawyer in a statement Thursday. The bank has moved staff and resources that banks would have to counteract suspicious activity, prosecutors said. The government said it would like to dismiss the charge in two years, assuming the bank would implement the reforms.
For about five years, starting in 2009, the US bank has not put in place or maintained adequate money laundering systems, the government said. The staff dedicated to this area was lengthened and the bank's practices lacked a "substantial" number of suspicious transactions. And the bank's staff tried to hide these raw material restrictions from the regulator, the OCC, lest it be disapproved.
The US bank also did not control the transactions made by non-clients in its offices through an external money transfer company, Western Union. The US bank stopped these transactions by non-customers in 2014.
Tucker, an operator of the payday loan system, has been convicted on several charges of fraud, money laundering and lending money after a five-week jury trial.
From 2008 to 2012, he used dummy accounts at the US bank, open under the names of several Native American tribes. Most of the income of more than $ 2 billion and hundreds of millions of dollars in profits from payday loans have flowed through these US bank accounts.
But bank employees have ignored the warning signs, including significant spending with tribal bank account money for personal items, such as a luxury vacation rental in Aspen, Colorado, and a Ferrari professional race team .
The bank closed the tribal accounts after press releases raised questions about Tucker companies in 2011, but did not file a suspicious activity report, officials said Thursday. Other Tucker accounts had been left open, allowing $ 176 million worth of payday loans to go through the bank.
The US bank had no suspicious activity report about Tucker until he received a subpoena in 2013 by the Manhattan attorney, although she knew that the Federal Trade Commission filed a lawsuit against Tucker .
Shares of the US bank, a former Warren Buffett Berkshire Hathaway stake, fell 0.2% during Thursday's session. This is the second of Berkshire's main banking positions, Wells Fargo is the other, to cope with regulatory heat in recent years.
The US bank said in 2015 that it had submitted an authorization decision to the money laundering controller. On Thursday, he said he had already reserved the money to pay for the case.
"We regret and have accepted responsibility for past deficiencies" in the anti-money laundering program, said Andy Cecere, chief executive and chief executive officer of the US bank, in a statement. "Our culture of ethics and integrity requires us to do better."
In a particularly extreme example, say federal prosecutors that the bank's anti-money laundering watchdogs looked up from the other side as a customer named Scott Tucker used several accounts for money laundering. wrongly obtained a fraudulent payday loan system.
The government says the US bank "deliberately" failed to report the suspicious activity in time. Tucker was sentenced last year to the Federal Court of New York to administer the illegal payment system, and in January he was sentenced to more than 16 years in prison.
The Minneapolis-based bank, the country's fifth-largest bank, will pay a total of $ 613 million, including $ 528 million in a deferred prosecution agreement with the Manhattan prosecutor, who announced that two cases of corporate secret infringement banking
The agreement also includes the Office of the Comptroller of the Currency, the Federal Reserve Board and the Financial Crime Network of the Ministry of Finance.
The US bank will reform its compliance and monitoring program and has accepted responsibility for its behavior, said the US lawyer in a statement Thursday. The bank has moved staff and resources that banks would have to counteract suspicious activity, prosecutors said. The government said it would like to dismiss the charge in two years, assuming the bank would implement the reforms.
For about five years, starting in 2009, the US bank has not put in place or maintained adequate money laundering systems, the government said. The staff dedicated to this area was lengthened and the bank's practices lacked a "substantial" number of suspicious transactions. And the bank's staff tried to hide these raw material restrictions from the regulator, the OCC, lest it be disapproved.
The US bank also did not control the transactions made by non-clients in its offices through an external money transfer company, Western Union. The US bank stopped these transactions by non-customers in 2014.
Tucker, an operator of the payday loan system, has been convicted on several charges of fraud, money laundering and lending money after a five-week jury trial.
From 2008 to 2012, he used dummy accounts at the US bank, open under the names of several Native American tribes. Most of the income of more than $ 2 billion and hundreds of millions of dollars in profits from payday loans have flowed through these US bank accounts.
But bank employees have ignored the warning signs, including significant spending with tribal bank account money for personal items, such as a luxury vacation rental in Aspen, Colorado, and a Ferrari professional race team .
The bank closed the tribal accounts after press releases raised questions about Tucker companies in 2011, but did not file a suspicious activity report, officials said Thursday. Other Tucker accounts had been left open, allowing $ 176 million worth of payday loans to go through the bank.
The US bank had no suspicious activity report about Tucker until he received a subpoena in 2013 by the Manhattan attorney, although she knew that the Federal Trade Commission filed a lawsuit against Tucker .
Shares of the US bank, a former Warren Buffett Berkshire Hathaway stake, fell 0.2% during Thursday's session. This is the second of Berkshire's main banking positions, Wells Fargo is the other, to cope with regulatory heat in recent years.
The US bank said in 2015 that it had submitted an authorization decision to the money laundering controller. On Thursday, he said he had already reserved the money to pay for the case.
"We regret and have accepted responsibility for past deficiencies" in the anti-money laundering program, said Andy Cecere, chief executive and chief executive officer of the US bank, in a statement. "Our culture of ethics and integrity requires us to do better."
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