On May 5, the DOJ announced that it plans to submit to Congress proposals for legislative amendments that would provide the DOJ with additional tools to advance anti-corruption work in the areas of pursuing illegal proceeds of transnational corruption and modifying the substance of criminal corruption offenses. The DOJ’s proposals regarding the illegal proceeds of transnational corruption would amend various sections of the U.S.C. to (i) expand foreign money laundering predicate crimes to include any violation of foreign law that, if committed in the U.S., would be a money laundering predicate; (ii) allow administrative subpoenas for money laundering investigations; (iii) enhance law enforcement’s ability to obtain overseas records by allowing access to foreign bank or business records by serving subpoenas on foreign bank branches located in the United States regardless of bank secrecy or data privacy laws in the foreign jurisdictions; (iv) create a framework to use and protect classified information in civil kleptocracy-related cases; and (v) extend the time period in which the United States can restrain property based on a request from a foreign country from 30 to 90 days. The proposals pertaining to substantive corruption offenses would amend 18 U.S.C. § 666 (theft or bribery concerning programs receiving federal funds) to (i) expressly criminalize the corrupt offer or acceptance of payments to “reward” official action; and (ii) lower the dollar threshold for liability from $5,000 to $1,000 to address cases where the dollar amount may be low but threat to the integrity of a government function is high.
On May 24, the OCC entered into an agreement with a New York-based federal savings bank over the bank’s allegedly unsafe or unsound banking practices “relating to strategic and capital planning, concentration risk management, and board and management oversight at the [b]ank, and violations of law relating to Bank Secrecy Act (BSA) internal controls and BSA officer requirements.” Pursuant to the agreement, the bank’s Board must, among other things, revise and adopt a written program of internal control policies and procedures that the bank must implement to ensure ongoing compliance with the BSA. The policies and procedures must include, at a minimum, (i) effective customer due diligence and enhanced due diligence processes at account opening and thereafter; (ii) adequate methodology to ensure proper risk rating of customer accounts at their opening and thereafter; (iii) effective evaluations and investigations of suspicious activity system alerts; (iv) effective suspicious activity investigation process; and (v) periodic validation of the bank’s automated BSA monitoring system settings.
On April 13, the OCC named Donna Murphy Deputy Comptroller for Compliance Risk. Effective May 1, Murphy will be responsible for supervising the development of policy and examination procedures relating to consumer, BSA/AML, and Community Reinvestment Act issues. Prior to joining the OCC in 2013, Murphy supervised the DOJ’s fair lending enforcement program.
On April 5, the FDIC issued a special Corporate Governance Edition of its Supervisory Insights publication titled, “21st Century Reflections on the FDIC Pocket Guide for Directors.” The new edition provides guidance to community bank boards of directors as well as an expanded, community bank-focused commentary on the FDIC Pocket Guide for Directors, which was issued in 1988. It covers a range of topics, such as the proper roles of directors and officers, as well as objectives for the development of policies and procedures for risk management and strategic planning. While the existing version of the Pocket Guide remains unchanged, this edition of Supervisory Insights incorporates more recent guidance and resources that the FDIC has provided since 1988. For example, the FDIC emphasizes that, “[i]n addition to covering areas outlined in the Pocket Guide and Safety and Soundness Standards, community bank directors should ensure that senior management has established appropriate risk management policies and procedures in Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) compliance, information technology and cyber risk, and compliance with Community Reinvestment Act and consumer protection laws and regulations.”
On April 5, FinCEN assessed a civil money penalty against a Nevada-based casino for willfully violating the anti-money laundering provisions of the BSA. From 2010 through November 2013, the casino allegedly failed to (i) establish and implement an effective, written anti-money laundering program; (ii) establish and maintain appropriate internal controls in compliance with the BSA’s reporting requirements; (iii) conduct independent testing of its AML program; (iv) implement automated data processing systems that ensured compliance with the BSA and the casino’s AML program; (v) report suspicious activity; and (vi) secure and retain certain required records. According to FinCEN, the casino generally “lacked a culture of compliance” and had a “blatant disregard for AML compliance permeat[ing] at all levels.” The casino agreed to a $1 million civil money penalty and admitted to willfully violating the BSA’s program, reporting, and recordkeeping requirements.