Bank of America Fined $1.2 Billion for Lax Money-Laundering Oversight
The New York Times
On Tuesday, Bank of America received a $1.2 billion fine, one of the largest on record, for failing to catch money laundering and other suspicious customer payments moving between the United States and countries including Russia, Belarus, and Mexico.
The illicit funds continued to pass through the bank even after securities regulators had reprimanded it two years earlier over suspected money laundering and instructed it to strengthen its vigilance.
According to a joint statement from the Treasury Department and the Office of the Comptroller of the Currency announcing the penalties, numerous transactions moved through with little resistance as part of trillions of dollars in activity that the bank did not properly monitor.
The Treasury Department said some of the transactions could be attributed to human error. Others, regulators said, revealed systemic weaknesses in the bank’s compliance program, with Bank of America at times making no meaningful attempt to look into suspicious activity.
Banks are obligated to submit suspicious activity reports (SARs) to the federal government whenever they suspect transactions may be connected to money laundering, fraud, or other unlawful activity. Regulators stated that Bank of America routinely failed to do so, disregarding significant volumes of suspicious activity tied to national security risks, including $600 million in transactions related solely to salvaged vehicles.
In many cases, Bank of America took longer than six months to file SARs, and in some cases it did not file them at all.
The illicit funds continued to pass through the bank even after securities regulators had reprimanded it two years earlier over suspected money laundering and instructed it to strengthen its vigilance.
According to a joint statement from the Treasury Department and the Office of the Comptroller of the Currency announcing the penalties, numerous transactions moved through with little resistance as part of trillions of dollars in activity that the bank did not properly monitor.
The Treasury Department said some of the transactions could be attributed to human error. Others, regulators said, revealed systemic weaknesses in the bank’s compliance program, with Bank of America at times making no meaningful attempt to look into suspicious activity.
Banks are obligated to submit suspicious activity reports (SARs) to the federal government whenever they suspect transactions may be connected to money laundering, fraud, or other unlawful activity. Regulators stated that Bank of America routinely failed to do so, disregarding significant volumes of suspicious activity tied to national security risks, including $600 million in transactions related solely to salvaged vehicles.
In many cases, Bank of America took longer than six months to file SARs, and in some cases it did not file them at all.
Criminals stole $90mn of crypto by hiding password readers in USB-like devices
Financial Times
Last week, criminals took roughly $90 million in digital assets from cryptocurrency wallets by concealing password-capturing components inside small USB-like devices that are marketed as the safest way for investors to store access to their tokens.
The tokens were taken from the wallets of customers of Ledger, a French company, which called the incident one of the most sophisticated attacks the crypto industry has experienced.
Ledger sells small devices resembling USB sticks that allow investors to store the password to their digital tokens securely and offline, as a safeguard against the theft of their passwords and assets.
On Thursday, the company said that organized criminals had spent several months purchasing authentic Ledger devices, opening them, installing custom-made hidden components built to record the recovery phrase during setup, and then reintroducing the devices into circulation through resellers in Southeast Asia.
NYDFS fines Swedish bank SEB $33M over AML issues
Banking Dive
Weaknesses in the anti-money laundering program at Stockholm-based Skandinaviska Enskilda Banken surfaced after the 2016 Panama Papers leak, which implicated hundreds of banks.
The New York Department of Financial Services (NYDFS) announced on Thursday that SEB, based in Stockholm, Sweden, and its sole New York branch agreed to pay $33 million to settle an investigation into the bank’s anti-money laundering program.
The investigation originated with the Panama Papers. The 2016 leak of 11.5 million financial and legal documents from Panamanian law firm Mossack Fonseca exposed that hundreds of banks had failed to comply with legal and regulatory requirements, including those related to money laundering and offshore activity.
Acting NYDFS Superintendent Kaitlin Asrow said in a prepared statement that financial institutions must comply with New York’s strict laws and regulations to protect the integrity of the financial system, and that the department will hold accountable any entities that fall short of those standards.
The NYDFS investigation found that SEB’s Bank Secrecy Act/AML program carried out inadequate customer due diligence and did not address the heightened money laundering risk posed by high-risk clients. According to a consent order issued by the agency, these problems persisted from 2015 to 2019.
The agency said the bank, which holds $370.2 billion in assets, failed to perform adequate due diligence on high-risk correspondent banking partners, including foreign institutions, maintained incomplete client files, assessed AML risk poorly, and did not properly update its procedures for correspondent banking relationships. The agency also found that SEB’s transaction monitoring program in Estonia, Latvia, and Lithuania was not adequately equipped to detect and block suspicious activity.
