Saddle River Valley Bank
On September 24, 2013, FinCEN announced that it had assessed a $4.1 million CMP against Saddle River Valley Bank in Saddle River, New Jersey (the bank has ceased operations and relocated its legal headquarters to Montclair, NJ). FinCEN determined that the bank violated several provisions of the Bank Secrecy Act (BSA) from 2009 through May 2011. The Bank has consented to the assessment.
Following an investigation shared with the OCC and the U.S. Attorney's Office for the District of New Jersey, "FinCEN concluded that the bank willfully violated aspects of the BSA's program, recordkeeping, and reporting requirements by lacking an effective anti-money laundering (AML) program reasonably designed to manage the risks of money laundering and other illicit activity, failing to conduct adequate due diligence on foreign correspondent accounts, and failing to detect and adequately report in a timely manner suspicious activities in the accounts of foreign money exchange houses, also known as casas de cambio. The Bank executed $1.5 billion worth of inadequately monitored transactions on behalf of Mexican and Dominican casas de cambio despite publicly available information, such as a FinCEN advisory, that provided ample notice of the heightened risks of dealing with these institutions." FinCEN director Jennifer Shasky Calvery commented that it was remarkable that a community bank in suburban New Jersey would attract over a billion dollars in transactions by customers in Mexico and the Dominican Republic.
The OCC announced its issuance of a concurrent $4.1 million CMP order. The agency had issued a C&D order in October 2011, directing the bank to correct its deficient BSA/AML programs, and requiring an independent review of the bank's relationships with several casas de cambio. The review resulted in the delayed filing of more than 190 SARs. The FinCEN assessment order (see above) stated that a single payment of $4.1 million would satisfy both its order and the OCC's order.
The U.S. Attorney's Office for the District of New Jersey issued a related announcement of an agreement with the former bank to settle for an additional $4.1 million the civil complaint against the bank for BSA/AML violations. This settlement, taken with the concurrent CMPs imposed by FinCEN and the OCC, will exhaust almost all of the former bank's remaining assets.
The bank's violations are summarized as failing to
- appropriately monitor at least $1.5 billion in transactions conducted on behalf of the CDCs
- properly detect and report suspicious activity occurring within the CDC accounts and file Suspicious Activity Reports on a timely basis
- conduct sufficient enhanced due diligence on the CDCs
- have a BSA officer or other personnel with sufficient experience to operate an AML program
- provide adequate training to its employees concerning anti-money laundering
- retain qualified periodic independent testers for its anti-money laundering program, as required by the BSA