US Bank to pay US$613 mn over money laundering violations

AFP: American lender US Bancorp has agreed to pay US$613 million to US authorities for violations of money laundering controls, including an attempted cover-up, federal prosecutors announced Thursday.

The parent company of US Bank, the fifth-largest lender in the United States, also admitted the bank processed billions of dollars in questionable transactions for disgraced payday lender and former race car driver Scott Tucker, who was sentenced to 16 years in prison in January. “We regret and have accepted responsibility for the past deficiencies in our (anti-money laundering) program,” US Bank CEO Andy Cecere said in a statement.

“Our culture of ethics and integrity demands that we do better.”

Federal prosecutors said US Bank deliberately capped the number of suspicious transaction alerts generated by its internal monitoring system from 2009 to 2014, and then hid this from the Treasury Department.

The bank also processed Western Union cash transactions on behalf of senders who were not bank customers without scrutinizing them for money laundering risk, according to the statement. The bank also failed to make timely reports on billions in transactions by Tucker between 2011 and 2013, who laundered funds from a fraudulent payday lending scheme using sham accounts opened in the names of companies purportedly owned by Native Americans, according to the Justice Department.

Bank employees disregarded Tucker’s suspicious activities, including millions spent on an Aspen, Colorado vacation home and his Ferrari racing team, and failed to file suspicious activity reports even after closing some of Tucker’s accounts in the face of media scrutiny, the statement said.
US Bank continued to open new Tucker accounts and did not file a suspicious activity report even after learning of a Federal Trade Commission lawsuit against his businesses, doing so only after being served with a federal subpoena, prosecutors said.

The action against the bank was brought by the Justice Department, the Federal Reserve and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency, a principal banking regulator.