On March 4, 2020, the Financial Crimes Enforcement Network (FinCEN) assessed a $450,000 civil money penalty against Michael LaFontaine, the Chief Operational Risk Officer of U.S. Bank National Association (U.S. Bank), for failing to prevent Bank Secrecy Act (BSA) violations. U.S. Bank was previously fined $185 million in February 2018 for failing to implement and maintain an effective BSA program and not filing Suspicious Activity Reports (SARs) in a timely manner. They used automated transaction monitoring software to generate alerts and identify suspicious activity. However, for at least five years, U.S. Bank improperly capped the number of alerts generated and did not have enough compliance staff to review even the reduced number of alerts. Mr. LaFontaine was told by regulators alerts should not be capped and doing so could result in a potential enforcement action. He was also told by internal staff that BSA staff at the bank was stretched dangerously thin. Regardless, Mr. LaFontaine did not take sufficient action to eliminate the alert caps and increase the bank’s BSA staff and resources.

Author

John Zasada, JD, CAMS – Compliance Consulting Director, Financial Institutions Group. John can be reached at zasada@doeren.com.