Ocean Bank fined $11m over AML failings

Ocean Bank fined $11m over AML failings

Florida-based Ocean Bank has been fined nearly $11 million for "wilfully" failing to establish an anti-money laundering (AML) programme.

It has entered into a deferred prosecution agreement that will see it pay the US $10,988,136 - an amount that represents the proceeds of illegal narcotic sales laundered through five Ocean Bank accounts looked into by investigators.

According to court documents, Ocean was aware as early as 1996 that there was a "high risk" that drug money was being laundered using Mexican currency exchange houses, commonly known as "casas de cambio" (CDCs).

Yet the bank "wilfully failing to establish an anti-money laundering program from 2001 through June 2008, in violation of the Bank Secrecy Act".

Of the five accounts investigated by authorities, in three Ocean failed to properly monitor and notify law enforcement that deposits consisted mainly of currency and wire transfers originating from CDCs that were controlled by the Bernal-Palacios drug trafficking gang. The other two accounts were used by Miami-area businesses to launder proceeds from drugs, say authorities.

The bank ignored a range of "red flags", such as big cash deposits that were "unsupported by the purported customer's business model" and also failed to take steps to identify and address weaknesses in its AML/BSA programme.

These weaknesses included a failure to maintain sufficient documentation to develop customer profiles, inadequate account monitoring systems, a failure to identify things that warranted the filing of suspicious activity reports and BSA compliance staff who were not well trained enough.

Mark Trouville, special agent, DEA, says: "Ocean Bank has a responsibility to not turn a blind eye to the money laundering activities of drug traffickers. In this instance, Ocean Bank failed in its duty to the public and now faces justice."

The bank's acknowledgement of the issue and cooperation has spared it criminal charges, with the US Attorney's Office agreeing to defer prosecution for 24 months, after which they will be dropped if Ocean meets its obligations.

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