Russia Investigation and Big Bank Fines: AML in the News

January 19, 2018


Mega International Commercial Bank Co. in Taiwan has been fined $29 million by the U.S. Federal Reserve Board for AML violations and will be required to improve its AML oversights and controls. The regulator noted that after its most recent inspection it found “significant deficiencies” in the bank’s U.S. operations risk management and compliance controls. This follows a 2016 fine the bank was slapped with by New York state authorities for a whopping $180 million for violations, including not paying enough attention to risk exposure in Panama.

United States

A Democratic senator in the U.S. is calling for a review and update of regulations for fighting money laundering, saying the laws are outdated and place an unnecessary burden on small and community banks.

While the senator has come out in favor of tougher requirements for disclosing company ownership and of changing reporting thresholds for suspicious transactions, she notes that many money laundering laws “were written in the 1970s and are badly out of date.”

She argues that laws should apply to bank clients and other intermediaries, which would reduce the burden placed on banks to combat money laundering. Since the end of 2009, U.S. regulators have doled out more than $16 billion in fines related to AML compliance failings.

United Kingdom

The UK government is taking steps to crack down on criminal gangs that launder money by using shell companies to purchase properties. The government will be introducing laws that will require overseas companies that own or buy properties in the UK to provide information on their ultimate owners in a public register.

The “world first” register, which is scheduled to be live by 2021, is will reduce the opportunity for criminals to launder money through real estate, and is also intended to give government more transparency into foreign businesses trying to win public contracts.

United States

Glenn Simpson, the head of political research firm GPS Fusion, has testified to the U.S. Congress that the Trump Organization may have sold properties to Russian nationals who were making the purchases to launder money.

While Donald Trump was campaigning for president, the research firm engaged a former British spy to uncover any information relating to Trump’s alleged campaign connections to Russians. The resulting opposition research report, as well as research conducted by the firm itself, alleges that Trump was involved with wealthy Russians described by Simpson as members of organized crime.

After examining the sale of condos in New York City, Panama City, Toronto and Miami, Simpson reported that in many cases the buyer of the property could not be clearly identified. He also stated that often properties would be bought and then sold for a loss shortly after—patterns of buying and selling that can be indicative of money laundering.

Chief Counsel of the Trump Organization calls the accusations “completely reckless and unsubstantiated”, stating that the deals Simpson mentioned involve properties for which Trump had only licensed his name instead of developing, owning or selling them.

About Anu Sood 

Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.

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