On March 17, 2010, the Financial Crimes Enforcement Network (FinCEN) announced the assessment of a civil money penalty, in the amount of $110 million, against Wachovia Bank. The action represents the largest penalty action to date against a financial institution by FinCEN for violations of the Bank Secrecy Act, including failures to:
- Institute and maintain an effective anti-money laundering program to prevent, detect and report suspicious activity within the Bank;
- Timely file suspicious activity and currency transaction reports thereby greatly diminishing the value of the reports to both law enforcement and regulatory agencies;
- Comply with the due diligence requirements of Section 312 of the USA Patriot Act to enable the detection and reporting of any known or suspected money laundering activity involving foreign correspondent banking; and
- Apply systems and controls to manage the risk of money laundering within the Bank's business lines such as Remote Deposit Capture, Pouch and Cash Letter activity and the repatriation of Bulk Cash from Mexico to the United States.
James H. Freis, Jr., Director of FinCEN was quoted as saying "In the recent past, Wachovia was the fourth largest commercial bank in the United States, and one of the largest banks in the world. During our investigation, it became evident that, despite such a prominent role in the domestic and international banking sectors and accompanying resources to such an institution, Wachovia did not institute systems, controls and other measures to manage risk commensurate with the scope and magnitude of its products, services and business lines, particularly foreign correspondent banking."
The investigation and resulting civil money penalty by FinCEN was part of a coordinated effort with the United States Attorney's Office for the Southern District of Florida, the Office of the Comptroller of the Currency, the Drug Enforcement Administration and Internal Revenue Service, Criminal Investigation Division.
FinCEN's Assessment of Civil Money Penalty in the Matter of Wachovia Bank (03/17/2010)
Department of Justice News Release: Wachovia Enters Into Deferred Prosecution Agreement
Department of Justice Criminal Information
Department of Justice Deferred Prosecution Agreement
Department of Justice Factual Statement
Office of the Comptroller of the Currency: Consent Cease and Desist Order
Office of the Comptroller of the Currency: Consent Order for a Civil Money Penalty
Additional Resources