Financial Regulatory Forum

Former MoneyGram compliance chief facing potential record fine regarded as anti-laundering innovator

In the late 1990s former MoneyGram International Inc executive Thomas Haider was a compliance leader pushing the money transfer industry to do more to fight financial crime, convincing his and other firms to voluntarily police transactions for illicit activity and report to authorities, a former official with the Treasury Department’s anti-money laundering bureau says.

A decade and a half later, six years after Haider left his post as MoneyGram’s compliance chief, Treasury’s Financial Crimes Enforcement Network (FinCEN) has threatened him with an unprecedented, multi-million dollar civil penalty. It has said he is personally liable for the money transfer giant’s failures to do what was required under the Bank Secrecy Act (BSA), the U.S. anti-money laundering (AML) law, to keep criminals out of the U.S. financial system during the mid-to-late 2000s, sources say. (more…)

Federal judge approves HSBC deferred prosecution agreement

By Brett Wolf, Compliance Complete

NEW YORK, July 3 (Thomson Reuters Accelus) - A U.S. federal judge has approved the Deferred Prosecution Agreement in which British banking giant HSBC will pay $1.9 billion to regulators and the Justice Department for operating with anti-money laundering weaknesses that among other things allowed drug cartels to launder hundreds of millions of dollars. (more…)

AML reports a key tool for analyzing “21st century crime scene,” New York prosecutors say

By Stuart Gittleman, Compliance Complete

NEW YORK, June 4 (Thomson Reuters Accelus) – The suspicious-activity reports and other filings submitted by anti-money laundering officers are quite unlike a child’s letters to Santa Claus — they can be assured of an audience, Manhattan’s top local prosecutor and top staffers told reporters last week.
New York County District Attorney Cyrus Vance Jr. said his staff is continuing the war Bob Morgenthau, his predecessor, waged against the usual focus of AML efforts – drugs, fraud, taxes and terrorism – but they are using new tools and methods to fight emerging criminal threats as well as lower-level “street crime.” (more…)

U.S. Justice Department targeting shop landlords in fight against medical marijuana industry

By Brett Wolf

NEW YORK, June 12 (Thomson Reuters Accelus) - A civil statute designed primarily to seize the assets of drug trafficking organizations is now being wielded by federal prosecutors in California in an unconventional and little-noticed attack on medical-marijuana shops in the state.

Prosecutors have brought more than a dozen lawsuits seeking the forfeiture of commercial properties that house marijuana shops. The actions pressure owners to either evict these controversial tenants or face costly legal battles or the loss of their buildings. (more…)

EXCLUSIVE: Ernst & Young to oversee high-stakes review of Citibank transactions, sources say

By Brett Wolf

NEW YORK, April 12 (Thomson Reuters Accelus) - Citibank has retained Ernst & Young to supervise a regulator-mandated review of the bank’s transactions that will seek to determine the degree to which alleged compliance failures allowed drug traffickers or other criminals to launder money, sources familiar with the arrangement said.

The results of this high-stakes process will likely play a key role in determining the size of any fine the regulator ultimately levies against the South Dakota-based bank, the sources said. (more…)

Banks face myriad difficulties in trying to return corrupt Gaddafi money

By Martin Coyle

LONDON, Aug. 30 (Thomson Reuters Accelus) – Banks face enormous legal and logistical challenges as they try to repatriate the billions of pounds worth of frozen Libyan assets invested in the war-torn North African state, according to industry officials. The process could take years to resolve even though the United Nations has already unfrozen some $1.5 billion in humanitarian aid which will be sent to the country.

The fears follow the overthrowing of Colonel Gaddafi’s dictatorship by rebel fighters and the formation of Libya’s National Transitional Council (NTC) in Tripoli. It is estimated that as much as $120 billion of Libyan assets are sitting in bank accounts worldwide, including up to $17 billion in the UK alone. UK foreign secretary William Hague said yesterday that it might take a while to repatriate frozen Libyan assets. The U.S. and South Africa last week struck a deal that will see $1.5bn of frozen money released for humanitarian aid by the U.N. The South African government initially had concerns about money being sent to the NTC, which it does not recognise. Diplomacy has smoothed over this, however.

(more…)

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