Court Rules On Anti-Money Laundering Accountability

A court ruling has found that compliance officers, among other executives, can be held responsible for anti-money laundering controls or lack thereof, as dictated by the Banking Secrecy Act.

[bctt tweet=”A court ruling has found that compliance officers, among other executives, can be held responsible for anti-money laundering controls.”]

That ruling came down from a United States district court in Minnesota, and that finding has, according to The Wall Street Journal, hurt the case of a former chief compliance officer who was levied a $1 million fine by the Financial Crimes Enforcement Network, known as FinCEN. Under the terms of that case, the organization fined former MoneyGram CCO Thomas Haider last year, tied to alleged compliance failures.

The case itself had its genesis in a settlement reached by the company with U.S. regulators, wherein MoneyGram admitted to wire fraud and laundering violations.

Lawyers for Haider argued in his defense that FinCEN did not have authority to hand down fines under the Bank Secrecy Act.

Yet, the Minnesota court this week denied the executive’s bid to have the case dismissed, stating that the money laundering programs do indeed tie in with the ability to decide on civil penalties, which also extend to partners and employees of firms. The judge in the case, David Doty, said the language in the act was plain and thus clear in intent. Meanwhile, Haider’s defense team also put forth the argument that its client had been deprived of a range of due process rights as stated under the law, having been compromised by press leaks during the case, and that the fine itself was too big. The judge also upheld the use of grand jury materials used as evidence in the Haider case that had originally been used to bring the United States government’s case forward against his employer, MoneyGram.