Capital One has picked up a $390 million penalty from the Financial Crimes Enforcement Network (FinCEN) for engaging in both “wilful and negligent violations of the Bank Secrecy Act (BSA) and its implementing regulations.”
Capital One admitted that it had deliberately failed to implement and maintain an effective anti-money laundering program, with it also not reporting thousands of suspicious currency transactions.
The violations are believed to have occurred from at least 2008 through 2014, and relate to Capital One’s Check Cashing Group.
Capital One also acknowledged that it failed to report suspicious transactions by convicted money launderer, Domenick Pucillo, an associate of the Genovese organized crime family.
“The failures outlined in this enforcement action are egregious,” Fincen Director Kenneth Blanco said. “Capital One wilfully disregarded its obligations under the law in a high-risk business unit.”
A spokesperson for the company said in an email that it is pleased to resolve the matter, calling it the last remaining government inquiry into a now-defunct business, and saying that the firm was fully reserved to pay the nine-digit penalty.
“Capital One takes its anti-money laundering obligations very seriously,” the company spokesman said. “The bank has invested heavily in the enhancement of its AML program over the past several years under new AML leadership, and has worked closely with regulators and law enforcement to ensure our compliance processes and protocols are robust and thorough.”
Capital One acquired the check cashing group in its 2006 purchase of New York-based North Fork Bank. The unit’s customers included dozens of check cashers in the New York and New Jersey areas, according to a document that Fincen made public on Friday. Services that the unit included check processing and armoured car cash shipments.
Capital One acknowledged errors involving currency transaction reports, which banks are required to file with the government when customers conduct cash transactions over $10,000. The $422 billion-asset admitted that it was negligent in failing to file the reports on roughly 50,000 transactions totalling more than $16 billion.
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