The Financial Crimes Enforcement Network (FinCEN) announced on August 20, 2014, that it had reached an agreement with a casino official permanently barring him from working in financial institutions as a result of his willful violations of the Bank Secrecy Act (BSA).
The individual in question, Mr. George Que, assisted high-end customers in avoiding detection of their large cash transactions by agreeing not to file suspicious activity reports (SARs) or currency transaction reports (CTRs), which are required under the BSA to assist law enforcement in detecting money laundering. As a result, Mr. Que was criminally charged for (a) willfully participating in causing the casino to fail to report transactions in currency;1 and (b) willfully participating in causing the casino to fail to report suspicious activity.2 He entered a deferred prosecution agreement and agreed to a civil monetary penalty of $5,000. In addition, he is permanently barred from working in the financial industry.
The lesson here reaches well beyond the gaming industry, however. Relationship managers for banks, hedge funds and all financial institutions should certainly deny any requests to assist a customer in evading the BSA’s reporting requirements. But they must do more. Individuals with day-to-day customer interaction are often the only ones who receive such an illicit request, making them the only ones with knowledge of the request. For example, in Mr. Que’s case, the consent order points out that he “was in a unique position to ensure that the Casino reported the suspicious activity. He had personal knowledge, based on multiple conversations … in which the request was made. Nonetheless, Mr. Que, and through him, [his employer], failed to report the activity as suspicious.”
As a result, simply denying a customer’s request for help in evading the BSA’s reporting requirements is not enough. The request itself should be reported as suspicious activity through the organization’s anti-money laundering compliance channels. If not, it could be grounds for a finding of willful participation in causing the organization to fail to report suspicious activity, which is a violation of federal law.
A series of poor choices, which may or may not have benefitted Mr. Que financially, have resulted in his debarment from the financial industry. Let this be a reminder to all in the industry that compliance with the BSA’s reporting requirements begins, and sometimes fails, at the ground level.