News

Banamex to forfeit $97M for 'willful' AML failures

June 6, 2017

The Justice Department's Criminal Division recently announced that Los Angeles-based Banamex USA, a subsidiary of Citigroup Inc., has agreed to forfeit $97.44 million as a result of Bank Secrecy Act violations.

According to a Justice Department press release, BUSA admitted to willfully failing to maintain an effective anti-money laundering compliance program, and also admitted to willfully failing to file suspicious activity reports. 

From at least 2007 until at least 2012, BUSA processed more than 30 million remittance transactions to Mexico with a total value of more than $8.8 billion. During the same period, the bank's monitoring system issued more than 18,000 alerts involving more than $142 million in potentially suspicious remittance transactions.

However, the release said, BUSA conducted fewer than 10 investigations and filed only nine SARs in connection with the 18,000-plus alerts. The bank filed no reports at all on remittance transactions between 2010 and 2012.

BUSA also admitted that it had known for several years that it should have improved its monitoring of MSB remittances but failed to do so, the Justice Department said. The FI employed a limited and manual transaction monitoring system, running only two scenarios to identify suspicious activity on the millions of remittance transactions it processed.

Reports from these scenarios were reviewed by two employees who were also assigned time-consuming non-BSA responsibilities, according to the release. As BUSA began to expand its remittance processing business in 2006, the bank understood the need to enhance its anti-money laundering efforts, yet failed to make necessary improvements to its transaction monitoring controls or to add staffing resources.

BUSA was able to obtain a nonprosecution agreement from the Justice Department based on a number of factors, the release said.

In particular, BUSA engaged in extensive remedial actions. The bank also received partial credit for its cooperation with the Justice Department's criminal investigation, and Citigroup further agreed to report to the Justice Department regarding implementation of compliance measures to improve oversight of its subsidiaries' BSA compliance.