John Zasada, Compliance Consulting Director, Financial Institutions Group

On Jan. 15, 2020, the Financial Crimes Enforcement Network (FinCEN) announced that it imposed a $390 million civil money penalty on Capital One, National Association (Capital One) for violating the Bank Secrecy Act (BSA). The 22-page assessment details how Capital One failed to establish and maintain an effective anti-money laundering (AML) program to prevent money laundering within its Check Cashing Group (CCG). Capital One failed to accurately and timely file Suspicious Activity Reports (SARs) related to the CCG. Its process for investigating suspicious transactions for the CCG was weak. SARs failed to be filed even when it had direct knowledge of certain CCG customers’ indictments and guilty pleas for criminal activity associated with their check cashing operations flowing through the accounts.

Capital One also failed to timely file CTRs for the CCG. Millions of dollars of transactions failed to be reported, including proceeds related to organized crime, tax evasion, fraud and other financial crimes.  By failing to properly code certain cash transactions, approximately 50,000 reportable cash transactions totaling over $16 billion in cash to the CCG over the course of three years went unreported to FinCEN.

To learn more about BSA regulatory requirements, contact Doeren Mayhew’s compliance specialists.