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How to add predictive analytics into your risk program. Risk reports are often limited to historical insights and issues and do not provide guidance and insights into the future of the organization. Adding predictive analytics can allow your organization to detect emerging risks and create mitigation plans. This can be achieved by combining internal and external key risk indicators (KRIs) and key performance indicators (KPIs) with regulatory intelligence. This ensures that risk reports can detect more issues and highlight areas of concern. Click here to learn more.

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Treasury tightens screws on Iran missile programs

The Treasury Department has announced that OFAC has targeted two Iranian regime-linked networks under the authority of Executive Order 13382 for engaging in covert procurement activities benefiting multiple Iranian military organizations. One network, led by Hamed Dehghan, has used a Hong Kong-based front company to evade U.S. and international sanctions and facilitate tens of millions of dollars’ worth of proliferation activities targeting U.S. technology and electronic components, for persons related to the Islamic Revolutionary Guard Corps and the Iranian regime’s missile program. The second network, led by Seyed Hossein Shariat, has procured various aluminum alloy products on behalf of components entities owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics. For identification information on the five individuals and five entities that OFAC designated, see BankersOnline's OFAC Update.


FDIC clarifies safety and soundness exam focus

FDIC FIL-47-2019, issued yesterday, announced an update to the agency's Risk Management Manual of Examination Policies (the Manual) to incorporate a new section titled Risk-Focused, Forward-Looking Safety and Soundness Supervision. The latter describes the FDIC's long-standing philosophy and methods for supervising institutions by focusing on the areas presenting the greatest risks. The new section has been included in the new Part VI of the Manual titled "Appendix: Examination Processes and Tools," and describes communication and risk-tailoring principles followed during safety and soundness examination activities.


Dorian storm precautions

The NCUA has advised credit unions in the path of Tropical Storm Dorian to take precautions as the storm enters the eastern Caribbean. The current projected path could take it across Puerto Rico by Wednesday, and the storm could reach Florida by the weekend.


FDIC: Beware of fake checks

The FDIC's Consumer News for August 2019 features an article warning consumers about scams involving fake official bank checks. Whether they are called cashier's, teller's or simply official checks, recipients of these checks generally prefer them over personal checks because they believe them to be guaranteed. And that's true, unless the check is counterfeit. The article alerts consumers about the dangers of phony official checks used in —

  • Lotteries and other sudden riches scams
  • Online auctions, classified listing sites, and overpayment scams
  • Secret or mystery shopper employment scams

Also included are a number of tips for spotting fake checks and steps a consumer should take if a bogus check scam is suspected.


Fake IRS emails to taxpayers

The IRS has issued a warning to taxpayers about a new IRS impersonation scam campaign spreading nationally on email. The IRS does not send unsolicited emails and never emails taxpayers about the status of refunds.


HUD awards $5.2M for safety and security improvements

HUD has announced it is awarding $5.2 million to 23 public housing authorities in 15 states to make needed improvements to their safety and security systems:


OFAC and FinCEN attack the opiod crisis

Treasury has announced coordinated OFAC and FinCEN actions to bring additional financial pressure upon those who manufacture, sell, or distribute synthetic opioids or their precursor chemicals.

OFAC identified Chinese national Fujing Zheng (Zheng) and the Zheng Drug Trafficking Organization (DTO) as significant foreign narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). OFAC also designated one additional Chinese national, Guanghua Zheng, for his support to the Zheng DTO’s drug trafficking activities, as well as one Chinese entity, Qinsheng Pharmaceutical Co. Ltd., for being owned or controlled by Fujing Zheng. OFAC is also identifying Xiaobing Yan (Yan) as a significant foreign narcotics trafficker pursuant to the Kingpin Act. Further identification information can be found in BankersOnline's OFAC Update.

FinCEN has issued Advisory FIN-2019-A006, "Advisory to Financial Institutions on Illicit Financial Schemes and Methods Related to the Trafficking of Fentanyl and Other Synthetic Opioids," to alert financial institutions and assist them in detecting and reporting related criminal activity.


Fed enforcement actions

The Federal Reserve Board has announced three enforcement actions:

  • a $20,000 civil money penalty to be paid by First Ipswich Bank, Ipswich, Massachusetts, for flood insurance violations
  • a $36,000 civil money penalty to be paid by Brookline Bank, Brookline, Massachusetts, for flood insurance violations
  • a Notice of Intent to prohibit from banking, seeking restitution, and assessing a civil money penalty, issued to a former employee of Farmers & Merchants Bank, Baldwyn, Mississippi

A Notice of Intent is not a final action. It notifies the respondent of the Board's intent and provides the respondent an opportunity for a hearing on the allegations made in the Notice and on the Board's intended action. In this case, the respondent is charged with embezzling over $441,000 by taking cash from the bank's vault and making unauthorized withdrawals from customers' certificate of deposit accounts, and with forging bank records and lying to bank personnel about her actions. The Board intends to bar the respondent from the banking industry, require her to make restitution to the bank of $20,264.27, and assess a civil money penalty of $10,067.


Treasury designates Dominican Republic-based organization

The Department of the Treasury has announced that OFAC has identified Dominican national Cesar Emilio Peralta and the Peralta Drug Trafficking Organization (Peralta DTO) as significant foreign narcotics traffickers under the Foreign Narcotics Kingpin Designation Act. OFAC designated eight additional Dominican nationals for providing material support to, or acting for or on behalf of, Peralta and the Peralta DTO. OFAC also designated six entities in Santo Domingo, Dominican Republic, including a number of nightclubs owned or controlled by Cesar Emilio Peralta. For identification details on the individuals and entities designated by OFAC, see BankersOnline's OFAC Update.


Fed issues prohibition letters

The Federal Reserve Board issued 13 "Section 19" letters during the second quarter of 2019. The letters notified individuals they are legally prohibited under Section 19 of the Federal Deposit Insurance Act and Section 205 of the National Credit Union Act from becoming or continuing as an institution-affiliated party with respect to any federally-insured financial organization (and certain other organizations) without permission, and that violation of the prohibition can result in daily criminal fines of up to $1 million or up to five years imprisonment.

The letters were issued to former institution-affiliated parties of:

  • East West Bank, Pasadena, CA (conviction for conspiracy to launder money instruments and making false entries in bank records)
  • Bank of New York Mellon (pleaded guilty to one count of wire fraud)
  • Copiah Bancshares (pleaded guilty to "aiding and abetting the attempt to evade or defeat tax")
  • Regions Bank (pleaded guilty to a charge of theft)
  • Regions Bank (pleaded guilty to a charge of grand theft)
  • Regions Bank (pleaded guilty to a charge of embezzlement)
  • Compass Bank, Mansfield, TX (entry into pretrial diversion program to resolve indictment for property theft)
  • Clear Mountain Bank (pleaded guilty to bank fraud)
  • Regions Bank (entry into pretrial diversion program to resolve indictment for exploitation of the elderly involving $50,000 or more)
  • First Citizens Community Bank (pleaded guilty to theft by unlawful taking or disposition)
  • Fifth Third Bank (pleaded guilty to criminal conversion)
  • Fifth Third Bank (pleaded guilty to grand theft (more than $7,500 but less than $150,000), ID fraud (elderly/disabled adult), ID fraud, and telecommunications fraud
  • Fifth Third Bank (pleaded guilty to bank fraud)


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