In the first quarter of 2018, the Department of Justice, federal banking regulators, and FinCEN concluded two major enforcement actions with almost $1 billion in forfeitures and penalties, the highest ever annual total for federal authorities.  These and additional smaller enforcement actions sent an unequivocal message that federal authorities are serious about enforcing U.S. AML laws and regulations.

[caption id="attachment_73965" align="alignnone” width="826"][Image "" (src=https://biglawbusiness.com/wp-content/uploads/2018/04/aml-actions.png)]Source:Bloomberg Lawas of March 31, 2018[/caption]


  • Monetary penalty actions concluded in January-March have been consistent with the pace of enforcement actions in 2015-17.


  • In January, the New York Department of Financial Services (New York DFS) concluded an action with Western Union addressing actions in New York that were part of the nationwide conduct penalized in the January 2017 action by FinCEN, and the Federal Reserve and Illinois Department of Financial and Professional Regulation Division of Banking concluded an action with Mega International Commercial Bank, previously penalized by New York DFS in August 2016.


  • In February, there were actions with sizable forfeitures to DOJ and civil money penalties assessed by federal regulatory agencies concluded with Rabobank, N.A. and U.S. Bank National Association

[caption id="attachment_73970" align="alignnone” width="821"][Image "" (src=https://biglawbusiness.com/wp-content/uploads/2018/04/aml-penalties.png)]Source:Bloomberg Lawas of March 31, 2018[/caption]

  • The action against Rabobank was concluded with a $368,701,259 forfeiture after a guilty plea to felony criminal charges of processing illicit funds and conspiring to impair, impede and obstruct its primary regulator, the OCC. An OCC civil money penalty of $50,000,000 was credited toward the forfeiture.


  • The action against U.S. Bank National Association reached a deferred prosecution agreement under which parent company U.S. Bancorp pleaded guilty to two felony violations of the Bank Secrecy Act and agreed to forfeit $453 million. The OCC imposed a $75 million civil money penalty, FinCEN assessed a separate $185 million civil money penalty satisfied by a payment of $70 million, and the Federal Reserve assessed a separate $15 million civil money penalty.  The forfeiture and penalties totaled $613 million.


  • The $60 million assessed by New York DFS on Western Union and $29 million assessed by the Federal Reserve on Mega International Commercial Bank were the other monetary penalties in January-February 2018.

 

[caption id="attachment_73975" align="alignnone” width="858"][Image "" (src=https://biglawbusiness.com/wp-content/uploads/2018/04/aml-fed-state.png)]Source:Bloomberg Lawas of March 31, 2018[/caption]

  • The first three months of 2018 have seen federal authorities conclude most of the AML/BSA penalty actions.


  • The Rabobank and U.S. Bank cases with their felony criminal charges for BSA violations may represent a new level of activism by DOJ in punishing egregious violations of the BSA.

[caption id="attachment_73980" align="alignnone” width="822"][Image "" (src=https://biglawbusiness.com/wp-content/uploads/2018/04/aml-penalty-state.png)]Source:Bloomberg Lawas of March 31, 2018[/caption]

  • Federal authorities accounted for almost $1 billion in civil money penalties and forfeitures in February 2018 alone, led by the $368,701,259 and $453 million criminal forfeitures to the DOJ in the Rabobank and U.S. Bank cases.


  • With these large penalties, which already exceed federal civil money penalties and civil and criminal forfeitures for AML/BSA violations in any previous year, the DOJ and the federal regulatory agencies have sent a clear signal of their intent to enforce U.S. AML/BSA requirements.