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FinCEN penalizes money services business for ineffective AML prgram

The Financial Crimes Enforcement Network penalized a money services business and its owner for anti-money laundering program failures and violations of the reporting and recordkeeping requirements of the Bank Secrecy Act.

The $10,000 civil penalty, announced Thursday followed an investigation of New Milenium Cash Exchange, Inc. (NMCE) and its president and founder, Flor Angella Lopez.

FinCEN determined that NMCE and Lopez had willfully violated the Bank Secrecy Act's program, reporting and recordkeeping requirements.

The Bank Secrecy Act (BSA) requires money service businesses (MSBs) to develop and implement a written AML program that at a minimum:

  • incorporates policies, procedures and internal controls reasonably designed to assure ongoing compliance;
  • designates an individual responsible for assuring day-to-day compliance with the program and BSA requirements
  • provides training for appropriate personnel including training in the detection of suspicious transactions; and
  • provides for independent review to monitor and maintain an adequate program.

Lopez designated herself as compliance officer. In this role, she failed to maintain adequate procedures for NMCE's check-cashing and money-order activities, as well as its currency-exchange transactions.

NMCE's controls failed to verify the identities of people conducting transactions, adequately monitor for suspicious activities, identify currency transactions exceeding $1,000 or ensure NMCE filed required currency transaction reports.

Lopez never conducted an AML risk assessment as required by the BSA, and "red flags" were not used as part of the company's procedures for monitoring suspicious activities.

When the IRS investigated NMCE in 2011, Lopez admitted she lacked specific knowledge of the reporting and recordkeeping requirements for currency transactions over $10,000.

Lopez also failed to recognize the potential conflicts of interest in establishing a relationship with a consultant who: (1) created NMCE's written AML program; (2) performed the only independent testing of the AML program, and (3) provided the only source of BSA training for the company.


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.