Published: Thu, February 15, 2018
Business | By Tara Barton

Feds fine US Bancorp $613 million for money-laundering violations

Feds fine US Bancorp $613 million for money-laundering violations

U.S. Bancorp is paying $613 million to settle allegations the bank had poor anti-money laundering controls, which put the bank repeatedly at risk of being used as a conduit for criminals.

The agreement also includes the Office of the Comptroller of the Currency, the Federal Reserve Board and the Treasury Department's Financial Crimes Enforcement Network. U.S. Bancorp failed to detect large numbers of suspicious transactions and concealed its missteps from regulators, it said.

"Our culture of ethics and integrity demands that we do better", said Cecere, who added, "we are confident in the strength of the (anti-money laundering) program we have in place today". Just as in the U.S. Bancorp probe, the OCC initially found fault with the company years earlier and followed up with a fine last month when the agency found Citigroup didn't do enough to fix its money-laundering safeguards.

"US Bank's own anti-money laundering staff warned against the risk of this alerts-capping strategy, but these warnings were ignored by management", FinCEN Director Kenneth Blanco said in a statement.

The Justice Department said the bank limited the number of transactions its systems would flag as suspicious based on its staffing levels.

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Under the terms of the Board's consent cease and desist order, US Bancorp must strengthen oversight of firmwide risk-management and compliance programs for preventing violations of anti-money-laundering and USA sanctions laws and put in place procedures to ensure it provides adequate and complete responses to examiner inquiries.

The government will dismiss the charges if the bank abides by its promises, including reforming its anti-money-laundering program. The bank barred those wire transfers in 2014. Tucker was convicted in October 2017 and in January sentenced to more than 16 years in prison for what the Justice Department called "a nationwide internet payday lending enterprise that systematically evaded state laws for more than 15 years".

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. Tucker's payday loan operations "exploited over four and a half million working people ... struggling to pay living expenses", the indictment charged.

Shares of U.S. Bancorp, a longtime holding of Warren Buffett's Berkshire Hathaway, were unchanged in morning trading Thursday.

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