Money Laundering and Corporate America
Money laundering has
jumped back to the top of the corporate crime charts, thanks to Steve Bannon’s
statements about Trump’s associates as well as the revelation by the founders of Fusion GPS that
they gave Congressional investigators leads about the president’s questionable
business transactions.
Amid all this, the
Office of the Comptroller of the Currency reminded us of the wider scope of
corporate ties to money laundering by announcing that it was fining Citibank $70 million for failing to
comply with a 2012 consent order the bank signed with the agency to resolve
allegations of violating the Bank Secrecy Act.
Western Union is paying a $60 million penalty in a similar case
brought by New York regulators.
According to data compiled for Violation Tracker, the Justice Department and federal financial regulators have since 2000 brought more than 80 successful cases against corporations for deficiencies in their anti-money laundering practices. These companies have paid a total of $5.9 billion in fines and settlements.
The targets of these
cases include several of the largest U.S. banks. JPMorgan Chase paid the largest penalty, $1.7 billion, to
resolve a criminal case connected to its role as the banker for Ponzi schemer
Bernard Madoff.
Wachovia, now owned by
Wells Fargo, was fined $110 million in 2010. Citigroup subsidiary Banamex agreed last year to forfeit $97 million to
resolve a criminal case involving remittances to Mexico.
Foreign banks have
also been involved. In 2012 HSBC had to pay $1.3 billion to resolve charges relating
to anti-money laundering deficiencies as well as violations of economic
sanctions.
Last year Deutsche
Bank – the same institution whose name keeps getting mentioned in connection
with the Trump investigation – was penalized $41 million by the Federal Reserve and was fined $425 million by New York State regulators for anti-money
laundering deficiencies said to be connected to the illicit transfer of more
than $10 billion out of Russia.
Federal prosecutors and regulators have also brought cases against non-bank entities that handle lots of cash, including Western Union, American Express and casinos. In 2015 the Tinian Dynasty Hotel & Casino was fined $75 million, and in 2013 the Las Vegas Sands Corp. paid $47 million to resolve criminal charges.
Also in 2015 the
Treasury Department imposed a $10 million penalty on the Trump Taj
Mahal Casino Resort, which by that time was no longer controlled by Donald
Trump.
Yet the justification for that penalty mentioned that the
casino had been found in violation of the Bank Secrecy Act many times in
earlier years, including 1998, when, with Trump running the show, it was fined
$477,000 by Treasury.
All of which is to say
that neither Donald Trump, his current and former business interests, nor many
of the largest financial institutions are strangers to issues of anti-money
laundering deficiencies.
For the most part, these cases involve a failure to detect and report suspicious transactions on the part of clients and customers. The big question for the Trump empire is whether it will faces charges of having engaged in such transactions on its own.
