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OCC penalizes former U.S. Bank officer

Cincinatti, OH
03/05/2020
Fine Amount: 
$50,000
Issued by: 

The OCC has issued a Consent Order to Michael S. LaFontaine, former chief operational risk officer at U.S. Bank, N.A., after the Comptroller found (and LaFontaine neither admitted nor denied) that:

  • LaFontaine failed to take action to address inadequate staffing levels in the Bank’s Bank Secrecy Act / anti-money laundering program (BSA/AML Program) or escalate the BSA/AML Program’s staffing deficiencies, which were critical and known to him as early as 2009, to his superiors.
  • As a result of Respondent’s inaction, the BSA/AML Program’s staffing levels remained critically deficient for at least a period of five years.
  • Due to the ongoing lack of adequate staffing levels, the Bank implemented alert suppression techniques to maintain suspicious activity alert volumes at an artificial level that was commensurate with the BSA/AML Program’s staffing levels.
  • As a result of the implementation and maintenance of suspicious activity alert suppression techniques, the Bank failed to investigate certain suspicious activity alerts.
  • LaFontaine failed to take action to correct the deficient practices, including the suppression of suspicious activity alerts, or escalate the known deficiencies and their potential consequences to his superiors.
  • The deficient practices, including the suppression of suspicious activity alerts, continued until at least 2014.
  • As a result of the Bank’s deficient practices, in 2018, the Bank agreed to forfeit $528 million to the United States under the terms of a Deferred Prosecution Agreement between it and the Department of Justice.
  • By reason of the foregoing conduct, LaFontaine contributed to or participated in the Bank’s violation of 12 U.S.C. § 1818(s), and its implementing regulations 12 C.F.R. § 21.11 and 12 C.F.R. § 21.21; and recklessly engaged in unsafe or unsound practices; which violations and practices caused or were likely to cause more than a minimal loss to the Bank.

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