OCC Fines Ex-Rabobank Counsel $50,000 for Concealing AML Report
24 Jul 2019

The US regulator of national banks on Tuesday disclosed a $50,000 civil monetary penalty against the former general counsel of Rabobank N.A. for concealing a critical report on the lender’s anti-money laundering (AML) program.

The fine by the Office of the Comptroller of the Currency (OCC) targets Daniel Weiss for his alleged attempts to hide a third-party assessment of the institution’s Bank Secrecy Act (BSA) controls from regulatory examiners. In a consent order, the OCC also barred Weiss from working for any federally-insured depository institutions in the future.

The penalty follows a February 2018 enforcement action by the agency against Rabobank N.A. for processing transactions likely tied to drug trafficking and other illicit activity. As part of the 2018 action, the California unit of the Dutch lender agreed to forfeit $368 million in addition to a $50 million penalty that was credited toward an AML-related Justice Department fine.

But Weiss and other executives were aware of the bank’s BSA troubles as early as 2012, when the institution’s incoming chief compliance officer informed them of previously unidentified compliance deficiencies, the OCC said. The concerns, initially downplayed by Rabobank management, led to the bank’s hiring of audit firm Crowe Horwath LLP to assess its BSA/AML controls.

In January 2013, Crowe Horwath submitted an initial assessment to Rabobank executives, criticizing the institution’s inadequate “culture of compliance” and citing “significant backlogs” of suspicious activity report and enhanced due diligence reviews, poorly managed mitigation efforts and shortcomings related to its internal audit function, among other deficiencies.

A then-ongoing OCC examination echoed Crowe’s findings, though agency examiners were unaware of the third-party assessment at the time. Nor did Weiss and others inform the OCC of the report in the bank’s formal response to the examination findings, the agency said Tuesday.

After Rabobank’s then-chief compliance officer voiced concerns about the decision not to disclose the existence of the Crowe assessment, the bank placed her on forced leave in March 2013, according to an OCC notice signed in March. The former compliance chief, who remains unnamed in regulatory documents, subsequently alerted OCC officials to the existence of the report.

Although OCC officials then requested a copy of the assessment, Rabobank’s acting-Chief Compliance Officer Laura Akahoshi, with Weiss’ counsel, repeatedly downplayed both the scope of Crowe Horwath’s work and the firm’s conclusions. By Akahoshi’s misleading account, Rabobank managers suspended the audit firm’s work, which at the time had amounted to a PowerPoint presentation that bank executives did not possess.

Nearly a month after the OCC had initially requested the findings, Akahoshi submitted the report to the regulator, along with a cover letter partly drafted by Weiss, suggesting that the document had never been turned over by the whistleblowing chief compliance officer.

Weiss, who signed the consent order earlier this month, said through an attorney in April that he intended to contest the allegations, Bloomberg reported at the time. Akahoshi, who was the subject of a similar notice, is separately contesting the OCC’s findings, the news outlet said.

Read more:

Rabobank to pay $369m over Mexican dirty cash, regulatory breaches

How Rabobank’s compliance unit ended up in hot soup again

Rabobank fined over poor anti-money laundering controls, KYC, beneficial ownership

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One Response to “OCC Fines Ex-Rabobank Counsel $50,000 for Concealing AML Report”
Stephen Wambua

Stephen Wambua July 24, 2019

A good insight for compliance professionals.

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