NEWARK, N.J. - Saddle River Valley Bank (SRVB) today agreed to pay an $8.2 million penalty to settle claims that it violated federal anti-money laundering laws, U.S. Attorney Paul J. Fishman, District of New Jersey; Department of the Treasury Financial Crime Enforcement Network Director Jennifer Shasky Calvery; and Comptroller of the Currency Thomas J. Curry announced.
SRVB agreed to resolve civil claims brought by the U.S. Department of Justice in connection with violations of the Bank Secrecy Act (BSA), which requires financial institutions to maintain programs designed to detect and report suspicious activity that might be indicative of money laundering and other financial crimes. In addition to the combined monetary penalty of $8.2 million, the bank has agreed to a number of related regulatory actions.
The complaint alleged that SRVB failed to maintain an effective anti-money laundering program and processed transactions involving at least $4.1 million in violation of federal money laundering laws. While a joint investigation by the U.S. Attorney’s Office and the Office of the Comptroller of the Currency (OCC) was underway, the majority of the assets of SRVB were acquired by another financial institution. The proceeds of that acquisition, plus all other assets of the bank, which are currently valued at approximately $9.2 million, were held pending the outcome of the investigation. SRVB has agreed to settle the government’s allegations with a combined penalty of $8.2 million of the remaining $9.2 million and has separately agreed with the OCC to cease operation and to dissolve its charter.
According to the complaint:
Beginning at least as early as 2000, numerous federal agencies, including the Department of State, the Department of the Treasury, the Federal Reserve Bank, and the IRS, began issuing public warnings to United States financial institutions about the increased money laundering threat present in Mexico. These warnings were also available through industry-wide advisories. It was believed that the proceeds of narcotics sales in the United States were being disproportionately laundered and transferred through banking institutions in Mexico. Many of these warnings also discussed the specific money laundering risks associated with “casas de cambio," (CDCs), which are non-bank currency exchange businesses located in Mexico and elsewhere.
Beginning in June 2009, SRVB began servicing what would ultimately become four CDCs, including three CDCs in Mexico and one in the Dominican Republic. SRVB voluntarily severed its relationship with the CDCs by May 2011, but only after processing at least $1.5 billion in transactions on behalf of the CDCs. SRVB’s anti-money laundering program related to the CDCs was deficient in several key areas
SRVB failed to:
• appropriately monitor at least $1.5 billion in transactions conducted on behalf of the CDCs;
• properly detect and report suspicious activity occurring within the CDC accounts and file Suspicious Activity Reports on a timely basis;
• conduct sufficient enhanced due diligence on the CDCs;
• have a BSA officer or other personnel with sufficient experience to operate an AML program;
• provide adequate training to its employees concerning anti-money laundering;
• retain qualified periodic independent testers for its anti-money laundering program, as required by the BSA.
After a joint investigation by the U.S. Attorney’s Office for the District of New Jersey and the OCC, SRVB agreed to an assessed civil monetary penalty by the OCC of $4. 1 million for the deficiencies in its anti-money laundering program. SRVB has agreed to a concurrent civil monetary penalty by FinCEN of $4.1 million, to be satisfied by one payment to the U.S. Treasury Department on behalf of both actions by the OCC and FinCEN. SRVB also agreed to surrender and forfeit an additional $4.1 million to the United States to resolve the investigation conducted by the U.S. Attorney’s Office for the District of New Jersey and the OCC, for a total penalty of $8.2 million.
U.S. Attorney Fishman credited special agents from the Department of Homeland Security, Homeland Security Investigations and thanked Counsel Elizabeth Ratliff and Noelle Kurtin of the OCC, as well as former Trial Attorney Joseph Markel of the Department of Justice, Asset Forfeiture and Money Laundering Section.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
The government is represented by Assistant U.S. Attorneys Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit and Aaron Mendelsohn of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark.
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Defense counsel: Nicolas Bourtin Esq., New York
Source: U.S. Department of Justice, Office of the United States Attorneys
