Korea bank affiliate ordered to pay $30 million in assessments for AML/BSA violations

Fines totaling $30 million have been assessed by federal and state banking agencies against a New York-based affiliate of a Korean bank for violations of anti-money laundering laws, the federal bank deposit insurance agency said Friday.

In a release, the Federal Deposit Insurance Corp. (FDIC) announced a $5 million civil money penalty (CMP) against Shinhan Bank America, New York, N.Y., for violations of the Bank Secrecy Act (BSA) and its implementing anti-money laundering (AML) regulations. The CMP was also issued, the agency said, for failure by the bank to comply with the requirements of an FDIC-issued consent order, dated June 12, 2017.

At the same time, the FDIC said, the Treasury’s anti-financial crimes arm – the Financial Crimes Enforcement Network (FinCEN) – announced a $15 million CMP against Shinhan for BSA violations, and the New York State Department of Financial Services (DFS) assessed a $10 million CMP for violations of state AML/BSA laws and regulations. (The FDIC said in its release that payment of $15 million CMP assessed by FinCEN satisfied both the FDIC and FinCEN assessments.)

The FDIC said it determined that the $1.8 billion-in-assets bank failed to implement an adequate AML program over an extended period. The agency said inadequate BSA/AML internal controls resulted in Shinhan being unable to adequately identify and manage illicit financial activity risk to the institution.

According to FinCEN, Shinhan “admitted to willfully violating the BSA from April 2016 through March 2021, by failing to implement and maintain an effective AML program that was reasonably designed to guard against money laundering and failing to timely report several hundred transactions to FinCEN involving suspicious financial activity by its customers processed by, at, or through the bank. “

The law enforcement agency said that, as a result, “tens of millions of dollars in suspicious transactions were not reported to FinCEN in a timely manner, including transactions connected to tax evasion, public corruption, money laundering, and other financial crimes.”

FDIC Assesses Civil Money Penalty Against Shinhan Bank America, New York, NY