These are certainly instructive. Haven't seen anything like this in some time.

http://www.occ.gov/ftp/release/2010-30a.pdf

http://www.occ.gov/ftp/release/2010-30b.pdf

These things always read like a slam dunk for the government... In turn, I always wonder what "the rest of the story" is.

The timing of the announcements may have been influenced by the impending merger of Wachovia into Wells Fargo. Given the severity of the bank's alleged lapses (the non-filed SARs alone are astounding) and the size of the bank, $160 million seems pretty tame as a financial penalty.

There are some important messages in the announcements for banks with RDC and/or foreign correspondent/casa de cambio accounts. One clear message is that you can't get away with simply saying "we can't afford the people needed to monitor this business."

There has to be another side to the story of what went wrong.

I agree, John. I was interested in the comments re AML monitoring thresholds influenced by staffing and the RDC connection. This should be read with great attention to detail by all.

I agree that all BSA Officers (no matter the size of your institution) need to print out,read and look at your current BSA/AML polices and procedures, clearly a message is being sent !!

This will give you a good idea of what went wrong.

http://www.justice.gov/usao/fls/PressReleases/Attachments/100317-02.Statement.pdf

Retread, thanks for sharing the link!

The part that bothers me about these types of articles, if you read into it, it seems like it was prompted by a drug bust.

Then turned into a "where do you bank" type prosecution of the bank. I am in no way defending Wachovia as I do not have all the details, but the C&D says the same thing all the BSA C&Ds say. That Wachovia had an inadequate BSA program because they banked these people. I am assuming that the transactions might have been high, and possibly even SARs were filed, but I think we could all find ourselves in this position.

We all have a customer or 3 that we suspect might be involved in something suspicious. We all monitor and file SARs. I believe this started with the bust. This is what worries me. So if my customer gets busted, I all of a sudden have an inadequate BSA program?

Those dollar amounts of cash and wire transfers are astounding!

From what I gather from the article, the reason the penalty was so harsh was that Wachovia was not performing adequate monitoring or filing timely SAR's. If they had, perhaps the penalty may not have been so harsh.

As a bank, our job is to report suspicious activity via the SAR. We are not accountable for investigating or confirming the underlying crime.

All of this did not happen over a 6-month or one-year period. Does anybody besides me wonder where the OCC was while all of this was going on?

I actually have the OCC in my FI at the moment doing a BSA/AML exam as part of our S & S. I'm waiting for them to bring this topic up, as my FI has a relationship with Wachovia.

What I take from this, other than watching RDC deposits, and not setting AML monitoring thresholds or procedures to fit staffing rather than the other way around, is to pay close attention to "what makes sense for the client". Either it got by them due to short staffing (which is made abundantly clear) or they didn't pick up on the fact that none of these folks should have been buying aircraft (and it seems it was multiple aircraft purchases). So recognition of red flags is key, and the staff to pay attention ties right in to that.

"From what I gather from the article, the reason the penalty was so harsh was that Wachovia was not performing adequate monitoring or filing timely SAR's. If they had, perhaps the penalty may not have been so harsh."

Harsh?? Are you sure? They appear to have turned a willful blind eye and helped launder potentially $400 Billion. You don't see Federal prosecution for a mere oversight. Filing SARs in this case would have been a moot point. The Bank was allowing these transactions to happen and the Bank was party and assisting them through offering them things like "pouch" and "RDC" services without any regard to appropriate due diligence. They made themselves a party to the money laundering - hence the prosecution.

IMHO, without the merger with Wells Fargo, we may have witnessed the first execution under the BSA death penalty.

And I believe that the timing of these announcements is deliberate. It puts a firm number on the costs just before the planned merger of the banks under the Wells Fargo holding company.

Well, if I recall correctly, it's the largest penalty handed down due to BSA violations. I do agree that they turned a blind eye to what was going on, but what would you have LE and the Regulators do? Fine them so much it impacts their stability? Put them out of business? What would that have accomplished? I think the message is very clear with this penalty.

I'm not trying to make excuses their failures, but what else would you suggest should have been done?

Remember this?

http://www.occ.treas.gov/ftp/release/2008-48b.pdf

According to a related news article, the drug investigation was announced a day or two after this settlement.

It sounds like Wachovia has a pattern of risky behavior. "When you play with fire, you are going to get burned".

"I'm not trying to make excuses their failures, but what else would you suggest should have been done?"

What else ACBbank? How about prosecuting? The one thing most frustrating for any compliance officer is executive management's lack of respect for compliance. We fight for any little inroad that we achieve, and have ulcers worrying when examiners are coming because we know who is going to be the sacrificial lamb.

Cuff'em for hindering prosecution, aiding and abetting money laundering, and for being jerks.

"but what would you have LE and the Regulators do? Fine them so much it impacts their stability? Put them out of business?"

That is exactly what I was suggesting may have happened if Wells had not been in the picture as they may not have opted for a deferred prosecution. The purchase by Wells basically already accomplished the goal.

Title XV: Annunzio-Wylie Anti-Money Laundering Act of 1992

Subtitle A: Termination of Charters, Insurance, and Offices

Amends the Federal Deposit Insurance Act and the Federal Credit Union Act to authorize the Federal Deposit Insurance Corporation and the Federal Credit Union Administration Board to accept conservatorship or receivership of an institution under their respective jurisdictions upon written notification by the Attorney General that it has been found guilty of certain money laundering offenses.