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#1984252 - 12/18/14 09:33 PM FinCEN goes after the Compliance Officer
Elwood P. Dowd Offline
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$1Million Penalty and Ban from Employment in the Financial Industry

This was rumored and the possibility was openly discussed at the ABA/ABA MLEC in November.

As they did in the Madoff scandal, FinCEN is suggesting that a financial institution's failure to file SARs damaged individuals who were the victims of fraud. BSA is miscast as a consumer protection law and the assumption that law enforcement would have acted promptly or at all on any SARs filed is completely unsupportable.

I'm not disputing the "Haider failed" mantra in the complaint, I just don't like the direction in which these types of things are being steered. People should be punished for violating the law without the need to whip up the crowd with feigned and irrelevant moral indignation.
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#1984295 - 12/18/14 11:20 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
Buddy the Elf Offline
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I agree, Ken. When I got to the section about the lack of SAR filings, I wondered who regulates law enforcement to ensure they're looking at and acting upon SARs.

I also agree that he "appeared to have dropped the ball", in his own words. Understatement of the year right there. And he was making over $1M a year in salary and other compensation. I can't help but wonder what he was doing/thinking during that timeframe. Not much evidently.
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#1984307 - 12/19/14 01:18 AM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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Reportedly, Haider has proposed a settlement agreement to make prompt full restitution and also provide additional funds in good faith.

According to the details, monies will be transmitted from his Canadian certificate of deposit; in return, FinCEN must agree to pay his early withdrawal penalties, which total in the thousands.

Due to his unforeseen legal circumstances, Haider and his representation cannot facilitate the payment of these withdrawal fees. So, FinCEN has agreed to deposit an enclosed check from Haider's attorney, withdraw the funds in cash upon clearance, and wire them per instructions at the nearest Rite-Aid.
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#1984317 - 12/19/14 12:26 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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You are here
Reuters Article

Another point of view (I am not taking sides as I clearly do not have many facts)
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#1984321 - 12/19/14 01:19 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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You are here
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#1984389 - 12/19/14 03:50 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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#1984425 - 12/19/14 05:26 PM Re: FinCEN goes after the Compliance Officer Kathleen O. Blanchard
Comply 101 Offline
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I respectfully disagree. This one deserves all that FinCEN dished out and then some. I was a branch manager during this period of time and witnessed the devastation that this caused customers, most of them elderly and poor. We could not prevent elderly customers from shipping their life savings to Canada via MoneyGram because they were convinced they won the lottery or were secret shoppers. We pleaded with and informed local money gram agents that a senior coming in with just under $5000 in cash and sending it to Canada was a scam. We could never figure out how MoneyGram could not know what was happening and why they were not preventing it from happening. NOW I know. He deserves every amount of the $1,000,000 that he was fined. Read the WHOLE article. It is very disturbing.
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#1984436 - 12/19/14 05:57 PM Re: FinCEN goes after the Compliance Officer Comply 101
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No one has said he didn't deserve what he got.

I doubt there is anyone here who is actually in a position to know what his personal level of responsibility was. If Peter Dijinis vouches for his professionalism that gives me pause because I know Peter. Besides, any FinCEN penalty assessment is the argumentative equivalent of a indictment; only a fool would believe it's an evenhanded representation of all available facts.
Last edited by Ken_Pegasus; 12/19/14 08:48 PM.
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#1984516 - 12/19/14 10:51 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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I've been thinking about this a lot. Cleary someone had to go on the block for what happened and given that Haider was, at least in theory, in charge of the AML Compliance Department, he seems the natural fit.

But as someone who has sat in meetings and seen Executive Level Compliance Officers shredded by District Heads or MD's, I have to wonder how much control Haider actually had?

I wonder if there will ever be a Whistleblower Program for AML Officers?
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#1984537 - 12/22/14 02:49 PM Re: FinCEN goes after the Compliance Officer ACBbank
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I guess I forgot why I do not post on this forum for a 18 months or so. Getting called a fool on my first post in some time. What MoneyGram did was personal to me, saw so many victims...
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#1984663 - 12/22/14 07:10 PM Re: FinCEN goes after the Compliance Officer Comply 101
John Burnett Offline
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Originally Posted By: Comply 101
I guess I forgot why I do not post on this forum for a 18 months or so. Getting called a fool on my first post in some time. What MoneyGram did was personal to me, saw so many victims...


I think you misinterpreted the post. The suggestion was that it's foolish to assume that a FinCEN announcement concerning its enforcement actions is anything more than FinCEN's perspective on the truth of the matter. As in most things, there is more than one version of the story that FinCEN has told.
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#1985105 - 12/24/14 03:45 PM Re: FinCEN goes after the Compliance Officer Comply 101
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I wasn't certain whom you were disagreeing with, but didn't suggest you were a fool. We can stipulate that elderly people being bilked is a tragic circumstance and that it could generate an emotional response from those who witnessed it. It's just not a reliable piece of evidence to use in placing the blame on a single individual.
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#1985330 - 12/29/14 02:45 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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The DOJ’s complaint (57 pages and 143 numbered paragraphs) deserves study. Its listing of Haider’s failures (accurately analogized to an indictment), indicates his direct reports supplied him with an overwhelming amount of incriminating information indicating 1) that SAR filings on Moneygram agents were necessary and 2) that a number of agent relationships should be terminated as those agents both participated in and profited from fraudulent activity.

It deserves debate as well; e.g. where was the federal regulatory agency for MSB's, the IRS, during the time period covered?

I have no interest in or dealings with MSBs and read the complaint as if it was aimed at a bank. So, the real surprise for me was in reading for the first time the wording of the regulation that requires an MSB to name a compliance officer. It is far more specific than “the program regulations” promulgated by the agencies that regulate banks:


(2) Designate a person to assure day to day compliance with the program and this chapter. The responsibilities of such person shall include assuring (emphasis supplied) that:
(i) The money services business properly files reports, and creates and retains records, in accordance with applicable requirements of this chapter;
(ii) The compliance program is updated as necessary to reflect current requirements of this chapter, and related guidance issued by the Department of the Treasury; and
(iii) The money services business provides appropriate training and education in accordance with paragraph (d)(3) of this section.

The “program” regulations merely indicate a bank must:

(3) Designate an individual or individuals responsible for coordinating and monitoring day-to-day compliance;

The program regulations do not specifically say that a bank’s BSA Officer is responsible for “assuring” compliance with specific responsibilities.

Kaybee’s advice in #1984389 above is solid. Any bank BSA Officer should follow it. Apparently, an MSB’s compliance officer, already tasked by regulation with “assuring” compliance, could not. If I was a compliance officer at an MSB I would look for greener pastures that were not on top of a minefield.
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#1985388 - 12/29/14 06:05 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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link to the press release and complaint:
http://www.justice.gov/usao/nys/pressreleases/December14/ThomasHaiderComplaintPR.php

http://www.justice.gov/usao/nys/pressrel...20Complaint.pdf

From the press release:
Quote:

Notwithstanding HAIDER’s obligations as MoneyGram’s Chief Compliance Officer, at all times relevant to the Complaint, HAIDER failed to ensure that MoneyGram (1) implemented and maintained an effective AML program and (2) fulfilled its obligation to file timely SARs. HAIDER’s failures included the following:
• Failure to Implement a Discipline Policy. HAIDER failed to ensure that MoneyGram implemented a policy for disciplining agents and outlets that MoneyGram personnel knew or suspected were involved in fraud and/or money laundering.
• Failure to Terminate Known High-Risk Agents/Outlets. HAIDER failed to ensure that MoneyGram terminated agents and outlets that MoneyGram personnel understood were involved in fraud and/or money laundering, including outlets that HAIDER himself was on notice posed an unreasonable risk of fraud and/or money laundering. For example, with respect to one such outlet: in 2004, HAIDER learned that the Toronto Police Department regarded the outlet as “dirty”; in 2005, 2006 and 2007, MoneyGram’s Fraud Department – which HAIDER supervised – identified the outlet as one of MoneyGram’s leading fraud outlets; in 2007, MoneyGram’s Fraud Department proposed to HAIDER (and others) that the outlet be terminated, and provided compelling evidence that the outlet was complicit in fraudulent schemes; and by the time Haider left MoneyGram in 2008, MoneyGram had received hundreds of reports from its customers linking the outlet to fraudulent activity.
• Failure to File Timely SARs. HAIDER failed to ensure that MoneyGram fulfilled its obligation to file timely SARs, including because: (1) HAIDER maintained MoneyGram’s AML program so that the individuals responsible for filing SARs were not provided with information possessed by MoneyGram’s Fraud Department that should have resulted in the filing of SARs on specific agents or outlets; and (2) HAIDER failed to provide adequate direction to MoneyGram staff regarding when to file SARs relating to fraud.
• Failure to Conduct Effective Audits of Agents/Outlets. HAIDER failed to ensure that MoneyGram conducted effective audits of agents and outlets, including outlets that MoneyGram personnel knew or suspected were involved in fraud and/or money laundering.
• Failure to Conduct Adequate Due Diligence on Agents/Outlets. HAIDER failed to ensure that MoneyGram conducted adequate due diligence on prospective agents, or existing agents seeking to open additional outlets, which resulted in, among other things, MoneyGram (1) granting outlets to agents who had previously been terminated by other money transmission companies and (2) granting additional outlets to agents who MoneyGram personnel knew or suspected were involved in fraud and/or money laundering.

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#1985393 - 12/29/14 06:16 PM Re: FinCEN goes after the Compliance Officer el guapo
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Both are linked in prior posts in this thread.

WSJ Article [One time view for non subscribers]
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#2017854 - 06/03/15 10:30 AM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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Above, FinCEN is attempting to obtain a court order barring an MSB Compliance Officer from the industry. In a recent case FinCEN negotiated the compliance officer's agreement to permanently leave the industry.

In a bank as opposed to an MSB, the federal functional regulatory agency is empowered to unilaterally expel an individual from the industry; i.e. there would be no need for a court order or an agreement. Apparently there is no similar mechanism for MSBs.

While they adjudged HSBC (and its decision makers) as being "too big to jail," I still don't understand why they didn't bar them from banking in the U.S. The order would have been a Pyrrhic victory against individuals working in the British operated and regulated portions of the bank, but it would have still sent a message.
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#2017867 - 06/03/15 12:34 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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In the recent case the civil penalty was a whopping $12,000!! Given the history and extent of the BSA violations, that's a big pffft. For shame, FinCEN.
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#2017908 - 06/03/15 02:17 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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Cape - I'm not sure the size of the MSB, but if this is your typical wireless shop offering MSB services, $12,000 can really hurt the pockets.
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#2017947 - 06/03/15 03:20 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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I suspect that HSBC is still considered a significant enough player in international finance and trade that FinCEN was convinced it should not bar it from operating in the U.S. Whether the agency came to that opinion independently or with some convincing from its parent Cabinet-level organization (or others), I ken not.
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#2068814 - 03/11/16 11:15 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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Hmmm, it took them long enough to mention this again.
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#2158730 - 12/29/17 03:28 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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Haider settlement reached last May

I came across this while looking for something else. Surprised, I looked for newspaper stories written at the time and found none. (It was mentioned in Top Stories, but didn't make its way to the Threads.) I don't have time to analyze this today, but a few things are obvious 1) how long it took to resolve the issue 2) the penalties are substantially less than those threatened and 3) the harm to consumers, not the missing SARs, became the focal point.
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#2158944 - 01/02/18 09:51 PM Re: FinCEN goes after the Compliance Officer Elwood P. Dowd
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We've seen the "harm to consumers" card played by FinCEN before. I still feel that Haider may have ended up the fall guy for upper [mis]management.
Last edited by John Burnett; 01/02/18 09:52 PM.
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