Saturday, May 24, 2014


Rumors are flying in the media, to the effect that a certain foreign bank, whose headquarters is in Europe, is going to be indicted for massive money laundering deficiencies. Before anyone, thinking that the Department of Justice is taking a purely political action here, to respond to the calls for more effective enforcement of AML/CFT laws, let me clue you in to the reality: the bank should be charged.

From time to time, and without any warning, I am contacted by competent compliance officers at financial institutions, who seek my counsel, especially when the advice that they give the directors at their bank falls upon deaf ears, and they fear regulatory action. I had such an experience regarding the Miami branch of the bank whose name is being passed around, as the next to be charged with criminal conduct.

The officer's concerns, detailed to me over a number of meetings and telephone calls, gave me a complete picture of a financial institution that has a program which relegates AML to a backseat, regarding lucrative banking profits, even when the suspicious activities rise to a level that even an intern would question, as trumping compliance. In essence, the bank's compliance leadership, whether it be in New York or Europe, dismissed the compliance officer's concerns, demonstrating that customer relationship managers, even when they dealt with customers from high-risk jurisdictions, call the shots, because they were working in a profit center. AML compliance is only window-dressing, and is generally ignored at the bank. This is unacceptable, under our banking best practices standards, and the bank's leadership knows this.

Therefore, please understand that there is nothing political about what is going to happen, and it is richly deserved. If I was in one of the relevant regulatory agencies, I would initiate charter revocation proceedings.       

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