The High Cost of AML Compliance Failures
There is a common thread the runs through most of the AML compliance failures that resulted in fines, a lack of investment in compliance personnel. It's not hard to understand that large, complicated businesses need to focus their resources on earning the highest return. Of course sales and marketing, the drivers of revenue, get and deserve much of executive management's attention. However, for those unfortunate companies that find themselves on the wrong side of the AML regulatory regime, the cost can be startling. The following table lists the enforcement actions taken by FinCEN, the agency within the U.S. Treasury responsible for combating money laundering, over the last five years.
FinCEN Enforcement Actions 2016 - Jan 2021
| Case ID | Date | Name | *Penalty (USD) |
| 2021-01 | 1/15/2021 | Capital One | $ 390,000,000 |
| 2020-02 | 10/19/2020 | Helix | $ 60,000,000 |
| 2020-01 | 3/4/2020 | Michael LaFontaine | $ 450,000 |
| 2019-01 | 4/8/2019 | Eric Powers | $ 35,350 |
| 2018-03 | 12/17/2018 | UBS Financial Services | $ 14,500,000 |
| 2018-02 | 5/3/2018 | Artichoke Joe's Casino | $ 8,000,000 |
| 2018-01 | 2/15/2018 | US Bank | $ 673,000,000 |
| 2017-04 | 11/1/2017 | Lone Star National Bank | $ 2,000,000 |
| 2017-03 | 7/27/2017 | BTC-e | $ 110,000,000 |
| 2017-02 | 2/27/2017 | Merchants Bank of California | $ 7,000,000 |
| 2017-01 | 1/19/2017 | Western Union Financial Svcs | $ 586,000,000 |
| 2016-06 | 12/15/2016 | Bethex Federal Credit Union | $ 500,000 |
| 2016-05 | 10/3/2016 | CG Technology | $ 22,500,000 |
| 2016-04 | 7/15/2016 | Hawaiian Gardens Casino | $ 2,800,000 |
| 2016-03 | 4/5/2016 | Sparks Nugget | $ 1,000,000 |
| 2016-02 | 3/24/2016 | Thriftway Food Mart | $ 10,000 |
| 2016-01 | 2/25/2016 | Gibraltar Private Bank & Trust | $ 4,000,000 |
(source: FinCEN.gov ) *Penalties may include civil penalty and restitution
In addition to these FinCEN actions, the FDIC recently fined Apple Bank of New York $12.5 million for failure to comply with AML rules. Clearly FinCEN wants to get the attention of big banks, and when they don't, those institutions can expect to pay. Having levied almost $1.9 billion in fines and penalties, the cost of non-compliance can be very steep. The best defense against suffering one of these massive fines is to perpetuate a culture of compliance. That starts at the top and includes hiring personnel in appropriate numbers and providing them with the training required to do the job right. Ensuring your entire compliance team and most of your customer-facing employees are CAMS certified would go a long way to demonstrating that culture of compliance within your organization.
