Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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5/01/2006 Wire Transfer Monitoring Cited in Bank’s BSA Penalty

BankAtlantic, a Fort Lauderdale savings association with 74 branches in southern Florida, will pay a $10 million penalty for Bank Secrecy Act failings.  FinCEN’s description of the violations, posted on the agency’s website, notes that auditors had observed that Suspicious Activity Reports were being filed by all areas of the bank except the wire transfer department.  An average of over 1,000 wire transfers a day were being sent by the end of 2004, yet according to FinCEN the bank had no automated system, or even an effective manual process, to monitor or analyze activities of the wire transfer department.  Such systems as there were could not capture locations where funds were being sent, or received from, despite the fact the bank’s primary market had been designated a High Intensity Money Laundering and Related Financial Crimes Area.  Auditors as well as financial institutions should read FinCEN’s penalty advisory since, despite noting a number of deficiencies, an audit described the bank’s compliance with BSA requirements as satisfactory.  According to the advisory, it was not until the bank received inquiries from federal authorities that it made serious efforts to address AML deficiencies. 

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