Agency lifts decade-old C&D order against Citibank for AML/BSA shortcomings

A cease-and-desist (C&D) order first imposed in 2012 against Citibank for deficiencies in its anti-money laundering/Bank Secrecy Act (AML/BSA) compliance has been terminated, the regulator of national banks said Thursday.

In a press release, the Office of the Comptroller of the Currency (OCC) indicated the bank, of Sioux Falls, S.D., had corrected issues found a decade ago, and thus the C&D order was no longer necessary.

The 2012 C&D resulted after the OCC found “critical deficiencies” in the bank’s AML/BSA program. Those included: internal control weaknesses including the incomplete identification of high risk customers in multiple areas of the bank, inability to assess and monitor client relationships on a bank-wide basis, inadequate scope of periodic reviews of customers, weaknesses in the scope and documentation of the validation and optimization process applied to the automated transaction monitoring system, and inadequate customer due diligence.

The bank also failed, the agency wrote in 2012, to “adequately conduct customer due diligence and enhanced due diligence on its foreign correspondent customers, its retail banking customers, and its international personal banking customers and did not properly obtain and analyze information to ascertain the risk and expected activity of particular customers.” Among other things, failure to adequately monitor remote deposit capture and file timely suspicious activity reports were also cited.

In other enforcement actions reported Thursday, the OCC said it:

  • Assessed a $30,000 civil money penalty (CMP) against Rafeal Webb Stark, president, chief executive officer and director of Beauregard Federal Savings Bank of DeRidder, La. The agency alleged that Stark (who also earned a C&D), among other things, knowingly provided false and misleading information on forms the bank used in connection with loans to customers to cover the down payment and closing costs related to real estate loans and caused the bank to the loans using falsified information on loan documents. “Despite Respondent’s claims to the OCC to the contrary, these loans were not arranged this way at the borrowers’ request but were part of a larger practice at the Bank of falsifying loan documents and manipulating loan to value ratios,” the OCC asserted.
  • Issued a C&D against Anchorage Digital Bank, N.A., also of Sioux Falls, also for AML/BSA program deficiencies, for failure to adopt and put into place a compliance program with internal controls for customer due diligence and procedures for monitoring suspicious activity, BSA officer and staff, and training.

OCC Enforcement Actions and Terminations