Agency issues one fine for anti-money laundering shortcomings, upholds another issued in 2019

A $600,000 civil money penalty (CMP) must be paid by a Mississippi bank for its violations of anti-money laundering (AML) laws, the Federal Deposit Insurance Corp. (FDIC) said Friday.

The agency said the Bank of Morton of Morton, Miss., consented to pay the penalty; the order was issued in late December. The agency provided no additional details in its order other than the citations of Bank Secrecy Act (BSA), the statute that enforces AML provision, that were violated, which include: 31 U.S.C. § 5311 et seq., 12 U.S.C. §§ 1829b, 1951-1960 and implementing regulations, 31 C.F.R Chapter X, and 12 U.S.C. § 1818(s) and its implementing regulations, 12 C.F.R. §§ 326.8 and 353.

The FDIC said the bank also failed to comply with the requirements of a June 30, 2020 Consent Order by the FDIC.

In other action, the FDIC said its board upheld a CMP of $175,000 and prohibition against a former employee of the Bank of Oswego of Lake Oswego, Oregon. The agency said it upheld its 2019 order against Diana Yates, formerly employed by The Bank of Oswego, who the agency alleged was engaged in violations of law and unsafe and unsound banking practices for which the Bank suffered financial loss.

“The Board further finds that Respondent’s actions involved personal dishonesty and willful and continuing disregard for the Bank’s safety and soundness,” the agency said nearly five years ago. According to the FDIC, Yates allegedly made misrepresentations to FDIC examiners, manipulated bank records, and caused the bank to file false call reports.

The agency’s action comes after a lengthy legal process in which Yates appealed her prohibition (and CMP), as well as a criminal conviction. According to the FDIC, Yates’ criminal conviction was vacated by the appeals court, and remanded for a potential retrial.

However, the appeals court remanded the enforcement case to the FDIC with a narrow instruction for reconsideration. On Jan. 6, 2023, the Ninth Circuit issued its mandate returning jurisdiction to the Board, the agency said.

The FDIC said it reviewed its 2019 decision and “finds that the conclusions it reached in its July 16 Decision and Order are appropriate.”

FDIC Enforcement Decisions and Orders