Pakistan bank branch must fix BSA/AML issues; former Illinois bank employee prohibited

Two enforcement actions – one against a Pakistan bank, the other against a former U.S. bank employee – and the termination of another earlier action against the bank it took the most recent enforcement action against were released Thursday by the Federal Reserve.

In a release, the central bank said it had entered into a written agreement with United Bank Limited, Karachi, Pakistan, and United Bank Limited, New York Branch, New York, N.Y., after the most recent examination of the branch conducted by the Federal Reserve Bank of New York “identified deficiencies relating to the Branch’s risk management and compliance with applicable federal and state laws, rules, and regulations” relating to anti-money laundering (AML) compliance, including the Bank Secrecy Act (BSA).

Among other things, the bank and its branch have 60 days to jointly submit a written plan to enhance oversight with the BSA/AML requirements, according to the written agreement released by the Fed.

In a separate action, the Fed announced the termination of a 2013 enforcement action against the bank related to international remittance services and related compliance and risk management deficiencies.

Also Thursday, the Fed announced an order of prohibition issued upon consent with Michelle A. Kennedy, formerly of Hinsdale Bank & Trust of Hinsdale, Ill. According to the order, Kennedy engaged in improper accounting practices to conceal an unreconciled balance of approximately $2.7 million, which caused a loss to the bank, and resulted in false entries in the bank’s records. Kennedy was terminated from her position, the order states.

The order states she is prohibited from participating in any manner in the conduct of the affairs of any insured depository institution, any holding company of an insured depository institution, any subsidiary of a holding company, or any related foreign bank or company without the prior approval of the Federal Reserve.

Federal Reserve Board issues enforcement action with United Bank Limited and former employee of Hinsdale Bank & Trust and announces termination of enforcement action with United Bank Limited