OCC Assesses $25 Million
Penalty Against Riggs Bank N.A.
WASHINGTON The Office of the Comptroller of the Currency
announced today that it has assessed a $25 million civil money penalty against
Riggs Bank N.A. for numerous violations of the Bank Secrecy Act. In a separate
enforcement action, the OCC imposed a number of new requirements aimed at
ensuring compliance with the Bank Secrecy Act and other reporting requirements.
In assessing the penalty, the OCC found that the bank had
failed to implement an effective anti-money laundering program. As a result, it
did not detect or investigate suspicious transactions and had not filed
Suspicious Activity Reports as required under the law. The bank also did not
collect or maintain sufficient information about its foreign banking customers.
The OCC found a number of problems with the banks account
relationships with foreign governments, including Saudi Arabia and Equatorial
Guinea. Riggs failed to properly monitor, and report as suspicious,
transactions involving tens of millions of dollars in cash withdrawals,
international drafts that were returned to the bank, and numerous
sequentially-numbered cashiers checks.
The Bank Secrecy Act has been enormously helpful in
providing law enforcement agencies with information about illicit activities,
said Comptroller of the Currency John D. Hawke, Jr. Today, it is one more
weapon we can bring to bear in the war on terrorism. The OCC expects banks to
have effective anti-money laundering programs in place and we will take strong
action against any national bank that is not in compliance with this important
law.
The
penalty assessment is concurrent with the $25 million penalty assessed against
Riggs by the Financial Crimes Enforcement Network (FinCEN). The penalties will
be satisfied by one payment of $25 million to the Department of the Treasury.
In a separate order, the OCC directed the bank to take a
number of steps to correct deficiencies in its internal controls, particularly
in the area of the Bank Secrecy Act and anti-money laundering efforts. Among other requirements, the OCC directed
the bank to:
- Ensure
competent management. Within 30 days, the board of directors must
determine whether management or staff changes are needed and whether
management skills require improvement.
- Develop
a plan to evaluate the accuracy and completeness of the banks books and
records, and develop a methodology for determining that information
required by the Bank Secrecy Act is appropriately documented, filed and
maintained.
- Adopt
and implement comprehensive written policies for internal controls applicable
to the banks account relationships and related staffing, including the
Embassy and International Private Banking Group. Among other requirements,
the policies must mandate background checks of all relationship managers
at least every three years and must prohibit any employee from having
signature authority, ownership or custodial powers for any customer
account.
- Develop
and implement a policy that permits dividend payments only when the bank
is in compliance with applicable law and upon written notice to the OCC.
- Adopt
and implement an internal audit program sufficient to detect
irregularities in the banks operation, determine its level of compliance
with applicable laws and regulations and provide for testing to support
audit findings, among other requirements.
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The OCC charters, regulates and examines
approximately 2,000 national banks and 51 federal branches of foreign banks
in the U.S., accounting for more than 56 percent of the nations banking
assets. Its mission is to ensure a safe and sound and competitive national
banking system that supports the citizens, communities and economy of the
United States.
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