Monday, November 3, 2014



A major drug trafficking, money laundering, and obstruction of justice case, filed in US District Court in Miami, against a former Venezuelan judge, and that country's ex-representative to INTERPOL*, should not upset compliance officers.; so why is it so maddening ?

Forfeiture allegations, in the amount of of $2.5m, have been filed in this action, seeking accounts of the defendants, that they, amazingly, maintained at:

(1) Wells Fargo Bank
(2) Espirito Santo Bank
(3) Banco Santander International

The defendants fit the classic definition of Politically Exposed Persons, or PEPs. How on earth they could have been passed by any compliance department, and allowed to open multi-million dollar accounts is totally beyond me. Even the newest compliance assistant could learn,  in 3/5 of a New York second, who these individuals were, by a simple Google search, and all these banks, who are known to target affluent Latin American clients, know better than to accept dodgy Venezuelan ex-government types with deposits that far exceed their former salaries. In my world, we call this compliance malpractice, and the responsible parties at these banks, whether it be ambitious customer service representatives, or senior officers, need to be held accountable. Unfortunately, their sins will never be disclosed to their next employer by their present one. They will get a great recommendation, and commit the same sins elsewhere.

The next time that some Miami banker complains that US regulators are picking on local banks, show him or her this article, please.  Regulators are, rightly, sick and tired of Miami banks putting greed ahead of proper compliance procedures and risk management. Perhaps if they start arresting directors, rather than solely imposing civil fines and penalties, you might begin to see some real compliance, instead of window dressing.
*Benny Palmeri-Bacchi and Rodolfo McTurk. Case No.:13-20930-Ungaro (SD FL).

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