Tuesday, 14 August, 2018


US Bank To Pay $613M For Faulty Money Laundering Program

US Bank To Pay $613M For Faulty Money Laundering Program US Bank To Pay $613M For Faulty Money Laundering Program
Conrad Doyle | 15 February, 2018, 21:54

U.S. Bancorp failed to monitor suspicious transactions and other activities that should have raised money laundering alerts, and then its employees tried to hide the deficiencies from regulators, federal prosecutors in NY said Thursday.

Under the terms of the Board's consent cease and desist order, US Bancorp must strengthen oversight of firmwide risk-management and compliance programs for preventing violations of anti-money-laundering and USA sanctions laws and put in place procedures to ensure it provides adequate and complete responses to examiner inquiries.

Under the terms of the deal, the government agreed to defer prosecution for two years.

The agreement also includes the Office of the Comptroller of the Currency, the Federal Reserve Board and the Treasury Department's Financial Crimes Enforcement Network.

The lax oversight aided Tucker, a longtime U.S. Bank customer who was sentenced to more than 16 years in prison last month for running an illegal $3.5 billion Internet-based payday lending scheme that victimized thousands of consumers with loan interest rates as high as 1000%. The government said it would seek dismissal of the charges in two years assuming the bank carries out the reforms.

"We regret and have accepted responsibility for the past deficiencies in our [anti-money laundering] program", US Bancorp CEO and president Andy Cecere said in a statement issued Thursday morning. "One of U.S. Bank's key priorities is to maintain an exceptional AML program and we are confident in the strength of the program we have in place today".

Shares in U.S. Bancorp were down 0.0904 percent at $55.26 at 11:45 a.m. EST, in line with the Dow Jones U.S. Bank Index .DJUSBK . The bank didn't evaluate its customers properly and kept its compliance staff too small, according to the OCC settlement. That resulted in a lot of potentially illicit activity getting through unnoticed, according to the government.

U.S. Bancorp said it has fully reserved for the financial penalties and faces "no further financial impact". The bank first disclosed the investigation of its relationship with Tucker and its anti-money laundering shortcomings in a quarterly Securities and Exchange Commission filing in August 2016.

The biggest case was a $1.9 billion deal with HSBC Holdings Plc in 2012 to resolve widespread failures that allowed billions in drug-cartel money to be laundered, in addition to the violation of multiple economic sanctions in several other countries.

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