FinCEN and the United States Attorney's Office for the Southern District of New York announced the settlement of charges that FinCEN previously filed against Thomas Haider, the former Chief Compliance Officer ("CCO") of MoneyGram International.
In settling the action, the CCO acknowledged that he had (i) allowed MoneyGram International outlets to continue operations despite evidence of consumer fraud, (ii) failed to implement a policy for terminating outlets that posed a high risk of fraud, and (iii) developed an AML program that concealed fraud reports from company analysts required to file suspicious activity reports with FinCEN. As part of the settlement, the CCO agreed to pay a $250,000 fine and is barred from performing compliance functions for any money transmitters for three years.
Acting FinCEN Director Jamal El-Hindi emphasized the deterrent value of charging individual compliance officers who failed to aggressively enforce their responsibilities to prevent money laundering. He noted that:
"[D]espite being presented with various ways to address clearly illicit use of the financial institution, the individual failed to take required actions designed to guard the very system he was charged with protecting, undermining the purposes of the BSA. Holding him personally accountable strengthens the compliance profession by demonstrating that behavior like this is not tolerated within the ranks of compliance professionals."
Commentary / Jodi Avergun
It is not often that FinCEN brings charges against individuals in regulated financial institutions, and it is even less common that FinCEN brings charges against compliance professionals. However, due to the CCO's seemingly complete abdication of his responsibilities to ensure MoneyGram's compliance with its AML obligations, and the failure of the CCO to respond to numerous warnings about the weakness of MoneyGram's AML controls, FinCEN had no choice but to file charges.
It appears that, in announcing this settlement, the FinCEN acting director went to great lengths to distinguish the vast majority of compliance professionals from Mr. Haider. Nevertheless, the settlement serves as a reminder that compliance officers must be vigilant in ensuring that their entities' compliance programs are effective to prevent and deter money laundering. Where weaknesses are identified, FinCEN expects compliance officials to remediate them.
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