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Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

Capital One is having to pay a huge fine for years of money laundering failings.

Author: Syedur Rahman  21 January 2021

Syed Rahman of financial crime specialists Rahman Ravelli considers the case and the task now facing the bank.

Capital One has been given a $390 million penalty for money laundering failings over six years.

The US bank had the fine imposed by the United States Financial Crimes Enforcement Unit (FinCEN) for violations of the Bank Secrecy Act. Capital One had admitted wilfully failing to implement and maintain an effective anti-money laundering programme and not filing thousands of suspicious activity and currency transaction reports.

FinCEN said that the bank’s failures between 2008 and 2014 had led to millions of dollars’ worth of suspicious transactions going unreported; including many involving money linked to organised crime, tax evasion, fraud and other financial crimes. 

FinCEN’s director, Kenneth A Blanco, said: “The failures outlined in this enforcement action are egregious. Capital One wilfully disregarded its obligations under the law.

“Information received from financial institutions through the Bank Secrecy Act plays a critical role in protecting our national security, and depriving law enforcement of this information puts our nation and our people at risk.

“These kinds of failures by financial institutions, regardless of their size and believed influence, will not be tolerated. FinCEN is committed to protecting our national security and the American people from harm and we will bring appropriate enforcement actions where we identify violations.”

He added that Capital One had allowed known criminals to use the US financial system; enabling criminal activity to flourish at the expense of victims.

Capital One said it was pleased to resolve the matter, which it said related to “a small portfolio of check-cashing businesses that Capital One inherited as part of an acquisition’’. It added that it had invested heavily in recent years in its anti-money laundering programme, which is under new leadership. 

The bank is looking to move forward after what has been a costly and damaging episode. But there is no escaping the fact that the size of the fine is a clear indicator of the seriousness of Capital One’s anti-money laundering violations. It now has to meet the challenge of creating and maintaining a culture of compliance, and strict monitoring by FinCen is now inevitable.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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