Kenneth Rijock

Kenneth Rijock

Monday, April 1, 2019

WHEN BANKS WITH AML VIOLATIONS REBRAND THEMSELVES, GOVERN YOURSELF ACCORDINGLY

This week's news about the termination of a regulatory Consent Order at Miami's Brickell Bank, by the FDIC, is good news, but remember the compliance rule; whenever you are looking at any entity, check to see whether it has rebranded itself, to escape a dark past that it doesn't want you to uncover. Should you delve deeper than the 2016 million dollar civil penalty imposed upon the bank for violating anti-money laundering regulations, you may find some other disturbing information.

Longtime observers of the Miami banking scene know that Brickell Bank's original name was Espirito Santo Bank, and the bank, under that name, was one of the American financial institutions that banked former Chilean dictator Augusto Pinochet, through opaque shell companies. Pinochet accumulated an estimated $28m in bribes and kickbacks that he received while president, and the scandal resulted in the demise of Washington's powerful Riggs National Bank.

Compliance officers should always be checking to see if their due diligence target has ever been known by any other name, and what misconduct, if any, occurred during the period when it operated under a prior identity. Always look back; you never can tell what you might find.

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