Top Story Compliance Related

Treasury has announced the imposition of Kingpin Act sanctions against a drug trafficking and money laundering network lead by Venezuelan national Pedro Luis Martin Olivares. Three individuals and 20 entities were designated. For identification of those entities and individuals, see our OFAC Update.

FDIC FIL-23-2018 announces that the FDIC, OCC and FRB will host an interagency conference call on May 15, 2018, from 1:00 p.m. to 2:00 p.m. Eastern Time to address certain proposed changes to their capital rules. The call will cover

• the definition of a new term, Allowance for Credit Losses;
• revised definition of carry value for available-for-sale debt securities and purchased credit deteriorated assets;
• mechanics of the proposed CECL transition provision; and
• new disclosure and regulatory reporting requirements.

Subscribers to our Daily Compliance Briefing may recall a report in November that FinCEN had imposed an $8 million civil money penalty on Artichoke Joe's Casino (AJC), a California card club, for willful disregard for anti-money laundering laws and regulations for over eight years. FinCEN announced yesterday that it has settled with the card club, rescinded its November order, and has issued a new consent assessment order for an $8 million civil money penalty, with $3 million suspended pending compliance with undertakings set out in the new order. Artichoke Joe's has undertaken to

• Hire a qualified independent consultant within 60 days to review the effectiveness of AJC's AML program
• Employ a compliance officer to ensure day-to-day compliance with its obligations under the Bank Secrecy Act and implementing regulations
• Adopt and implement an AML program
• hire a qualified independent consultant to conduct a "look-back" covering the period from year-end 2011 through year-end 2014
• Certify compliance with its Undertakings in the order.

OFAC has announced it has targeted Myrna Mabanza (Mabanza), a Philippines-based facilitator who provided support to ISIS-Philippines (ISIS-P). Mabanza was named as a Specially Designated Global Terrorist (SDGT) for her support of ISIS-P. As a result of yesterday’s designation, all property and interests in property of Mabanza subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with her. Identifying information is available in our OFAC Update.

The BCFP has announced that John Czwartacki has transitioned from the Office of Management and Budget to the Bureau as its Chief Communications Officer and Spokesperson, as of April 30, 2018.

FinCEN has issued Advisory FIN-2018-A002 on FATF-identified jurisdictions with anti-money laundering and combatting the financing of terrorism (AML/CFT) deficiencies. FATF issued its updated list on February 23, 2018.

The FDIC has released a list of orders of administrative enforcement actions taken against banks and individuals in March. There were three consent orders; seven Section 19 orders; five civil money penalties; six terminations of consent orders; three orders of restitution; and one decision and order dismissing a December 2015 notice of intention to prohibit from further participation, notice of charges, notice of assessment of civil money penalties, and order to pay.

• A civil money penalty of $2 million and order for approximately $1.3 million in restitution was imposed on The Bancorp Bank, Wilmington, Delaware.
• Cross River Bank, Teaneck, NJ, and an institutional affiliate, Freedom Financial Asset Management, LLC, were ordered to pay $1.1 million in civil money penalties and approximately $20 million in restitution.
• Flood Act penalties of $46,800 and $10,100 were imposed on banks in Monroe, MI, and Wildwood, NJ, respectively.
• A series of missteps by the FDIC and an Administrative Law Judge resulted in the FDIC Board's dismissal of a December 2015 notice of charges, assessment of civil money penalty and order for prohibition against an individual formerly affiliated with Branch Banking and Trust Company, Winston Salem, NC. That individual did surrender over $254,000 to the government in a civil forfeiture action while the FDIC action was pending.

FEMA has published in today's Federal Register a final rule identifying communities in Blair and Huntington Counties in Pennsylvania that are to be suspended from the National Flood Insurance Program on May 2, 2018, for non-compliance with the floodplain management requirements of the program.

OFAC has announced it has identified Chinese fentanyl trafficker Jian Zhang as a Significant Foreign Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). In addition, OFAC designated four additional Chinese nationals acting on behalf of Jian Zhang and Zaron Bio-Tech (Asia) Limited, an entity registered in Hong Kong that is owned or controlled by Jian Zhang. As a result of this action, any assets in which these persons have an interest in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons. For identifying information on the designated individuals and entity, see our OFAC Update.

Since June 2000, more than 2,100 individuals and entities have been named pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,466,485 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

The FDIC has issued a press release announcing that Thomas M. Hoenig is stepping down as Vice Chairman and Director of the Board of the agency on April 30, 2018. He joined the Board in 2012 and has served a full six-year term.