Tuesday, August 07, 2007

Stiff Fines Prompt Amex to Bolster Money-Laundering Vigilance

Chris Preimesberger writes on eWeek:

American Express Bank International learned an expensive lesson when it agreed on Aug. 6 to pay a stiff penalty to the federal government after admitting that it failed to install and maintain anti-money-laundering software at its Miami office.

The bank, which has about $1 billion in assets, must fork over a whopping $65 million, including $55 million in restitution and $10 million in penalties to the Department of the Treasury, as a result of negligence in its banking and compliance practices.

A criminal information affidavit filed in U.S. District Court in Miami charged the bank with a single count of failing to maintain an effective anti-money-laundering program, and Amex decided not to fight the charge and to take the fine instead.

The investigation raises obvious questions about why the bank's executives failed to address the money-laundering problems earlier. The transgressions apparently had been happening for several years, according to the federal affidavit.

More here.


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