Compliance Blog

Written by Shari R. Pogach, Regulatory Paralegal, NAFCU

We’ve had a couple of glorious atypical low humidity summer days during the work week here in Washington, but of course going into the weekend we have more typical DC summer weather – hot and humid with a chance of thunderstorms.  As it’s Friday and it’s hot, I thought I’d just let this posting be a roundup of some news items you might have missed:

• The Office of the Comptroller of Currency issued a cease and desist order against an officer of a California bank for violating consent orders issued in 2010 and 2014 to correct BSA and anti-money laundering (AML) compliance program deficiencies.  The officer, who was responsible for the bank’s operations department, undermined the BSA officer’s authority, made false statements to the OCC, advised other bank employees to do verify these statements and failed to implement adequate internal controls on high-risk transactions.  Amongst other things, the enforcement action requires the officer to pay a $5,000 civil money penalty, participate in annual BSA compliance training and not make any BSA/AML staffing decisions.  While agreeing to the terms of the order, the officer did not admit to or deny any wrongdoing.
• The Department of Justice announced that Florida-based Michael Cooper, the leader of a $9 million credit card refund scheme was sentenced to 10 years in prison.  According to court documents, Cooper owned and operated several different businesses to defraud credit card customers, credit card companies and various internet service companies by getting “charge-back” refunds of money paid by credit card customers. Cooper and his employees located former clients of the internet service companies, then impersonated these individuals with their credit card companies, and fabricated contracts and other documents to obtain refunds on their behalf. Between 2012 and 2016, Cooper and his employees obtained more than $9 million in fraudulent refunds from at least 76 different businesses.
• A dual U.S.-Venezuelan citizen pleaded guilty to his role in bribing officials of Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. by the owners of U.S.-based companies in order to secure energy contracts and payment priority on outstanding invoices according to a Department of Justice release.  He also admitted he conspired to launder and conceal the proceeds of the bribery scheme through a series of financial transactions, including wire transfers to accounts in Switzerland.
• The Department of Justice announced two Michigan residents, pleaded guilty to structuring a financial transaction to avoid bank reporting requirements. According to court documents, two individuals owned and operated several medical management companies and a chiropractic facility in Michigan. In July 2013, they withdrew cash in amounts of less than $10,000 from multiple bank branch locations in order to avoid the currency transaction reporting requirements.  As part of their pleas, the individuals acknowledged their unlawful conduct involved more than $250,000.

***

July BSA Blast.  The third quarter issue of the BSA Blast will be available early next week (NAFCU login required).  There are three articles in this edition covering: 1) a review of the enforcement actions against two banks for weak BSA/AML compliance programs; 2) the Financial Crimes Enforcement Network’s (FinCEN) red flag guidance on corrupt political financial activity; and 3) a casino’s potential $3 million reduction of its FinCEN civil monetary penalty. The BSA training quiz included in this issue focuses on the updated customer due diligence and beneficial ownership examination procedures.