U.S. Bank Cited by Federal Authorities for Lapses on Money Laundering
- 6 years ago
U.S. Bank Cited by Federal Authorities for Lapses on Money Laundering
In a late-2009 memo, court documents show, U. S. Bank’s anti-money-laundering officer warned the chief compliance officer
that employees responsible for investigating the alerts were “stretched dangerously thin.”
But senior bank officials knew they should not be curtailing money-laundering inquiries just
because they did not have enough employees, so they hid the practice from federal bank examiners, according to prosecutors.
U. S. Bank, the fifth-largest commercial bank by assets in the United States, was charged by the federal authorities
on Thursday with failing to guard against illegal activity and, in at least one instance, even abetting it.
The action against U. S. Bank was modest compared with cases involving banking giants like HSBC and Standard Chartered
that the authorities found had done business with drug gangs and countries like Cuba and Iran that had been barred from the United States financial system under international sanctions.
One U. S. Bank employee left references to the staffing problem out of the minutes of internal
meetings, fearful of what regulators would think, the Justice Department said.
The Justice Department accused U. S. Bank, which is based in Minneapolis, of severely neglecting anti-money laundering rules, helping a payday lender operate an illegal business
and lying to a regulator about its plans for tracking potential criminal activity by bank customers.
Federal prosecutors in Manhattan reached an agreement with U. S. Bank to defer prosecution
as long as the bank could show it had improved its monitoring of customer transactions.
In a late-2009 memo, court documents show, U. S. Bank’s anti-money-laundering officer warned the chief compliance officer
that employees responsible for investigating the alerts were “stretched dangerously thin.”
But senior bank officials knew they should not be curtailing money-laundering inquiries just
because they did not have enough employees, so they hid the practice from federal bank examiners, according to prosecutors.
U. S. Bank, the fifth-largest commercial bank by assets in the United States, was charged by the federal authorities
on Thursday with failing to guard against illegal activity and, in at least one instance, even abetting it.
The action against U. S. Bank was modest compared with cases involving banking giants like HSBC and Standard Chartered
that the authorities found had done business with drug gangs and countries like Cuba and Iran that had been barred from the United States financial system under international sanctions.
One U. S. Bank employee left references to the staffing problem out of the minutes of internal
meetings, fearful of what regulators would think, the Justice Department said.
The Justice Department accused U. S. Bank, which is based in Minneapolis, of severely neglecting anti-money laundering rules, helping a payday lender operate an illegal business
and lying to a regulator about its plans for tracking potential criminal activity by bank customers.
Federal prosecutors in Manhattan reached an agreement with U. S. Bank to defer prosecution
as long as the bank could show it had improved its monitoring of customer transactions.