Capital One fined $390 million over ‘willful,’ ‘negligent’ BSA violations; $100 million previously paid is credited

A $390 million civil money penalty assessed Friday against Capital One, National Association, over the Bank Secrecy Act’s (BSA) anti-money laundering (AML) rule requirements was offset in part by the $100 million penalty the bank paid in 2018 to the Office of the Comptroller of the Currency (OCC), according to the consent order announced Friday by the Financial Crimes Enforcement Network (FinCEN).

In its Friday announcement, FinCEN, the Treasury Department’s financial crimes enforcement unit, said it determined and Capital One admitted to “willfully failing to implement and maintain an effective Anti-Money Laundering (AML) program to guard against money laundering.” The bank also admitted, the release said, that it willfully failed to to file thousands of suspicious activity reports (SARs), and negligently failed to file thousands of currency transaction reports (CTRs), with respect to a particular business unit known as the Check Cashing Group.

FinCEN said the bank’s violations occurred from at least 2008 through 2014 and caused millions of dollars in suspicious transactions to go unreported in a timely and accurate manner, “including proceeds connected to organized crime, tax evasion, fraud, and other financial crimes laundered through the bank into the U.S. financial system.”

Briefly, FinCEN said that Capital One:

  • failed to implement and maintain an effective anti-money laundering (AML) program despite warnings by regulators, criminal charges against some of the check cashing group customers, and internal assessments that ranked most of the customers in the top 100 of the bank’s highest-risk customers for money laundering;
  • acknowledged failing to file SARs even when it had actual knowledge of criminal charges against specific customers, including Domenick Pucillo, a convicted associate of the Genovese organized crime family;
  • admitted to negligently failing to file CTRs on approximately 50,000 reportable cash transactions representing over $16 billion in cash handled by its Check Cashing Group customers.

The $390 million penalty was decided following consideration of Capital One’s “significant remediation and cooperation with FinCEN’s investigation,” the agency said. Friday’s order notes that Capital One paid a $100 million penalty to the OCC in October 2018 for related conduct and that the bank’s obligation to FinCEN will be credited by that amount. The order stated that Capital One would satisfy its obligation by making an “immediate” payment to Treasury of $290 million.

FinCEN Announces $390,000,000 Enforcement Action Against Capital One, National Association for Violations of the Bank Secrecy Act

Consent order

Be the first to comment

Leave a Reply

Your email address will not be published.