American Express Bank Forfeits $55 Million for Bank Secrecy Act Violations

Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Drug Enforcement Administration Administrator Karen Tandy announced in a press release Monday that American Express Bank International has entered into a deferred prosecution agreement on charges of failing to maintain an effective anti-money laundering program. As part of this agreement, American Express will forfeit $55 million dollars to the U.S. government.

The charge against American Express Bank International was filed at the U.S. District Court for the Southern District of Florida in Miami. The sole charge, failing to maintain an effective anti-money laundering program, was accepted by American Express Bank International. The bank acknowledged responsibility for its behavior in a factual statement and agreed to pay the $55 million to the U.S. government to settle forfeiture claims held by the government.

The government plans to recommend the dismissal of the charge in 12 months as long as American Express Bank International implements and carries out anti-money laundering measures right away. The bank's willingness to take care of this problem promptly and their remedial actions to date have been impressive and will help when the courts consider the dismissal of the charge.

Assistant Attorney General Fisher said of this event, "Banks and other financial institutions must uphold their responsibility to safeguard financial markets from the illegal activities of international drug cartels and professional money launderers. An effective anti-money laundering program is critical to law enforcement efforts to detect and cut off the flow of drug money. The Department of Justice will continue to work to stop financial institutions from knowingly disregarding their obligations to have these vital programs in place."

So what exactly are banks required to do to avoid these types of charges? The Bank Secrecy Act has established a four-pronged standard for banks: internal policies, procedures and controls designed to guard against money laundering, the coordination and monitoring of day-to-day compliance with the Bank Secrecy Act; an ongoing employee training program; and independent testing for compliance conducted by bank personnel or an outside party. Banks are also required to have systems in place that enable them to report suspicious financial activity to the U.S. Treasury Department's Financial Crimes Enforcement Network.

Money laundering has been a big problem in our society. Banks will have to pay extra attention to the policies regarding money laundering. This case will surely open some eyes to that.

Sources:

PR Newswire Press Release, http://media.prnewswire.com/en/jsp/includes/contents/printable.jsp?resourceid=3530600