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Harry Cassin
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U.S. Bank pays $613 million penalties for defective money laundering program

The parent company of U.S. Bank agreed Thursday to pay criminal and civil penalties of $613 million to resolve charges that it willfully ran a defective anti-money laundering program and hid the defects from federal regulators.

U.S. Bancorp entered into a two-year deferred prosecution agreement (pdf) with the DOJ. It also reached settlements with FinCEN, the Office of the Comptroller of the Currency (OCC), and the Federal Reserve.

The Minneapolis-based bank is the fifth largest in the United States. It has about 74,000 employees.

A U.S. Bank customer, Scott Tucker, was sentenced in January to more than 16 years in prison. A jury convicted the former racecar driver of defrauding 4.5 million borrowers through deceptive loan terms and illegal interest rates.

In a statement Thursday, the DOJ said:

From October 2011 through November 2013, the Bank willfully failed to timely report suspicious banking activities of Scott Tucker, its longtime customer, despite being on notice that Tucker had been using the Bank to launder proceeds from an illegal and fraudulent payday lending scheme using a series of sham bank accounts opened under the name of companies nominally owned by various Native American tribes.

The DOJ said from 2008 through 2012, Tucker’s companies made five million loans that generated more than $2 billion in revenues and hundreds of millions of dollars in profits. 

“Most of this money flowed through accounts that Tucker maintained at the Bank,” the DOJ said.

From 2009 to 2014, U.S. Bank capped the number of alerts generated by its transaction monitoring systems, according to the DOJ.

Rather than setting thresholds for alerts based on a transaction’s risk, the bank set alerts according to its staffing levels and resources.

“The Bank deliberately concealed this from the OCC, the Bank’s primary regulator,” the DOJ said.

U.S. Bank’s president and CEO, Andy Cecere, said Thursday, “We regret and have accepted responsibility for the past deficiencies in our AML program.”

Cecere said the bank has made “significant investments” to improve AML controls under a 2015 OCC consent order.


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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