Compliance Blog

Written by Shari R. Pogach, Regulatory Paralegal

            A former branch manager of J.P. Morgan Chase Bank (Chase) in West Palm Beach, Florida, was sentenced on May 25, 2012, to 57 months in prison, followed by two years of supervised release.  Mr. Carey Robinson was sentenced after having pled guilty to one count of structuring financial transactions that caused Chase not to file required Currency Transaction Reports (CTRs).

            According to Southern District of Florida court documents, Robinson was a bank manager at Chase from 2008 through May 2011.  With a tip from a former Chase employee, the Internal Revenue Service, Criminal Investigation (IRS-CI) began an investigation.  The IRS-CI found that around May 2009, Robinson started exchanging small bills for larger bills for a bank customer.  Initially the customer would bring stacks of $20 bills in a brown bag to the bank once or twice a week.  Robinson would take the customer into his office, discreetly count the cash and then direct a vault custodian to change the $20 bills into $100 bills.  Apparently for some of the exchanges, the customer would wait at the bank while the vault manager performed the exchange, then collect the new bills and leave.  In other instances, the customer would drop off the cash and leave the bank.  The customer would then collect the $100 bills from Robinson later in the day at a parking lot near Robinson’s house. 

             Later on, the customer stopped coming to the bank so as not to arouse the suspicions of the other bank employees.  During this period, Robinson would meet the customer at a prearranged spot and pick up the cash.  Then Robinson would typically bring the cash into the branch early in the morning before any of the other employees arrived.   He would sometimes place the $20 bills inside the teller’s drawer and lock it.  When the teller arrived at work, he would give her the key and direct her to exchange the $20 bills for $100 bills.  Initially the teller would use the $100 bills in her cash drawer or purchase additional $100 bills from the vault in order to make the exchange.  Robinson later directed the teller to make the exchange with $100 bills from the ATM deposits rather than from the vault.  Robinson would then deliver the $100 bills to the customer at another location.

            Robinson exchanged $20 bills for $100 bills for this customer from approximately May 2009 through May 2011 with the assistance of several other Chase employees.  Although the BSA requires the filing of CTRs for all cash transactions over $10,000, and most of these exchanges almost always involved more than $10,000, Robinson ensured that the bank never filed a single CTR on any.  In fact, he would tell the bank employees that CTR filings were not necessary for these exchanges.

             Bank surveillance footage from cameras installed in Robinson’s office and the vault area of the bank corroborate much of the information provided by bank employees.  Videotape in one example shows Robinson removing stacks of $20 bills from a bag under his desk, placing the cash inside a blue Chase bag and then delivering it to a teller.  The tape also shows the teller returning to Robinson’s office with the cash.  Robinson was also recorded on videotape walking to the vault, collecting stacks of $100 bills from a teller, returning to his office and then removing the stacks of cash from his pocket.  Video surveillance also shows Robinson paying the teller for conducting transactions.

             When interviewed by IRS-CI agents, Robinson admitted that he had exchanged almost $1 million for this customer on a weekly basis or sometimes every couple of weeks.  Most exchanges involved amounts between $30,000 and $40,000 but the largest single exchange was for $100,000 with another large exchange involving $80,000.  He also admitted that several bank employees assisted him with the exchanges and he would compensate them for their help.  In addition, Robinson admitted that the transactions were never recorded in the Teller Express computer system; therefore no CTRS were ever filed.

 Another instance of reality trumping fiction……………………

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This originally appeared in the July issue of the BSA Blast, a quarterly newsletter on BSA issues and a NAFCU member benefit.  If you’d like an email notice when the latest issue is available for download, simply drop us a line at compliance@nafcu.org.