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Stiff BSA Violation Penalties Handed Out To Two Banks
VIENNA, Va. (9/25/13)--A $4.1 million civil money penalty against Saddle River Valley Bank in Saddle River, N.J., was announced by the Financial Crimes Enforcement Network (FinCEN) Tuesday. The penalty was assessed, according to FinCEN, after it was determined that the bank violated several provisions of the Bank Secrecy Act (BSA) from 2009 through May 2011.
The FinCEN announcement noted the bank consented to the assessment.
FinCEN worked with the Office of the Comptroller of the Currency (OCC) and the U.S. Attorney's Office for the District of New Jersey and concluded that the bank "willfully violated aspects of the BSA's program, recordkeeping, and reporting requirements" by:
  • Lacking an effective anti-money laundering (AML) program reasonably designed to manage the risks of money laundering and other illicit activity;
  • Failing to conduct adequate due diligence on foreign correspondent accounts; and
  • Failing to detect and adequately report in a timely manner suspicious activities in the accounts of foreign money exchange houses, also known as casas de cambio.
Saddle River Valley Bank, according to FinCEN, executed $1.5 billion worth of inadequately monitored transactions on behalf of Mexican and Dominican casas de cambio despite publicly available information, such as a FinCEN advisory, that "provided ample notice of the heightened risks of dealing with these institutions."
"It's pretty remarkable that a small community bank in suburban New Jersey was attracting more than a billion dollars in transactions with customers in Mexico and the Dominican Republic, and nobody thought it was too good to be true," FinCEN Director Jennifer Shasky Calvery said.
"Banks of all sizes, in any part of the country, may be tempted by such lucrative ventures. However, banks must use common sense in evaluating customer risk or seemingly lucrative business could become quite the opposite,"  she advised.
FinCEN's penalty is concurrent with a $4.1 million civil money penalty assessed by the OCC, and will be satisfied by one payment of $4.1 million to the U.S. Department of the Treasury. In addition, the U.S. Attorney's Office for the District of New Jersey will collect $4.1 million from the bank through civil asset forfeiture. The bank ceased operations in 2012 and the combined collection amount of $8.2 million represents the majority of its remaining assets.
In a related story, TD Bank NA Monday consented to pay $57.5 million to settle allegations by the U.S. Securities and Exchange Commission, FinCEN, and the OCC that the bank from April 2008 to September 2009 failed to file suspicious activity reports--or SARs--on activity in accounts belonging to Rothstein Rosenfeldt Adler, P.A., the Fort Lauderdale, Fla.  law firm, the OCC noted, through which Scott Rothstein ran a $1.2 billion Ponzi scheme.


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