DYSFUNCTIONAL SCREENING SOFTWARE RESULTS IN VIOLATION FOR BANKING KINGPIN ORGANIZATION MEMBERS

The function of bank  sanctions screening software is, among other things, to screen for individuals named or designated by OFAC. If that software cannot do that, you have not only wasted a lot of money, you run the risk of being named & shamed by Treasury, in a very public way, on the Civil Penalties webpage, through a Finding of Violation.

Compass Bank, of Laredo, Texas, which does business as BBVA Compass Bank, had a bank client who was designated by OFAC, due to her Guadalajara, Mexico-based family's involvement in money laundering operations on behalf of Rafael Cara Quintero, an OFAC-designated Drug Kingpin.

The bank failed to identify the customer as a sanctioned individual, notwithstanding numerous negative news reports about the matter. Amazingly, the bank's sanctions screening software totally failed to hit on her account, due to what the bank blamed on a "misconfiguration" in the screening software. The software was not checking dormant or inactive accounts for new OFAC hits. We call this compliance malpractice.

Who at the bank was responsible for seeing that screening software was  working properly ? Who was checking, monitoring, and auditing its operation periodically ? Where was the annual outside audit of the bank's compliance program.

Even without the OFAC designation, those local newspaper articles, naming the bank client, should have been required daily reading for Compass Bank Compliance officers. Who fails to read local news about money laundering and drug trafficking in their area ? I believe the bank needs a new compliance division, for the current one abjectly failed.

Readers who wish to read the complete text of the Violation can access it here.