Capital One Fined for Anti-Money-Laundering Deficiencies
18 Jan 2021

The Treasury Department on Friday said it fined Capital One COF Financial Corp. for “willfully failing to implement and maintain” effective anti-money-laundering controls.

As part of the settlement, Capital One admitted that it “willfully failed to file thousands of suspicious-activity reports,” according to the Treasury’s Financial Crimes Enforcement Network. The allegations pertain to a check-cashing group that Capital One acquired when it bought North Fork Bank in 2006.

FinCEN said it had assessed a $390 million penalty but that it agreed to give Capital One credit for a $100 million penalty it paid to the Office of the Comptroller of the Currency in 2018. The OCC is an independent branch of the Treasury.

Capital One also acknowledged that its actions violated the Bank Secrecy Act. Financial institutions are required to work with the government to detect and prevent money laundering.

The allegations cover practices between at least 2008 and 2014, the same year Capital One exited the check-cashing business.

FinCEN said Capital One’s actions caused “millions of dollars in suspicious transactions to go unreported in a timely and accurate manner, including proceeds connected to organized crime, tax evasion, fraud, and other financial crimes laundered through the bank into the U.S. financial system.”

“Capital One’s egregious failures allowed known criminals to use and abuse our nation’s financial system unchecked,” FinCEN’s director, Kenneth Blanco, said in a statement.

FinCEN said Capital One was aware of the money-laundering risks associated with the check-cashing group, in part because of warnings by regulators and criminal charges against some customers. FinCEN said the bank acknowledged failing to file suspicious-activity reports even when it had knowledge of criminal charges against customers, including a convicted associate of the Genovese organized-crime family.

By AnnaMaria Andriotis, The Wall Street Journal, 15 January 2021

Read more at The Wall Street Journal

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