The Financial Crimes Enforcement Network (FinCEN) announced on January 15 that Capital One, National Association (Capital One) was fined $390,000,000 for engaging in willful and negligent violations of the Bank Secrecy Act (BSA). The violations involved a business unit within its commercial bank called the ‘Check Cashing Group’.
Issues included the following:
- The process for investigating suspicious customer transactions was weak and resulted in the failure to fully investigate and report suspicious activity to FinCEN
- Failures to detect and report suspicious activity by the check cashers themselves;
- Failures to file SARs even when it had actual knowledge of criminal charges against specific customers, including Domenick Pucillo, a convicted associate of the Genovese organized crime family; and
- Negligently failing to file CTRs on approximately 50,000 reportable cash transactions representing over $16 billion in cash.
Unfortunately there aren’t a lot of lessons that AML Officers can learn from this action – – it was pretty much just a failure by Capital One to implement basic AML requirements and controls. You can access the FinCEN release here.