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Top Ten Money Laundering Enforcement Actions of 2022

Posted  January 10, 2023

2022 was a big year for money-laundering enforcement.  It marked the first full year that the new FinCEN money laundering whistleblower office was up and running.  And, even more remarkably, by the end of the year, the FinCEN program expanded to welcome whistleblowers with information related to sanctions violations after Constantine Cannon attorneys called for this legal change following the Russian invasion of Ukraine.  This newly robust program shows the government’s commitment to stopping the flow of dirty money and recognition that whistleblowers are a critical component of that fight.

It’s not just FinCEN, however, that is tasked with stopping dirty money.  A number of state and federal agencies all work in tandem to accomplish this goal.  As the largest money-laundering recoveries of 2022 show, the entire government is ready to do the hard work to stop money laundering and the corruption it enables.  Notably, a significant number of these settlements relate to cryptocurrency companies failing to meet their compliance obligations.  This may not be surprising given the scale of crypto fraud, and may only be the start of things to come.

Below are a list of ten important money-laundering enforcement actions in 2022.  With the FinCEN whistleblower office fully operational and the newly amended program encouraging new whistleblowers, it is only to be expected that this list in 2023 and beyond will look even more impressive.

  1. Danske Bank: On December 13, 2022, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) announced a landmark settlement with the largest bank in Denmark for $2 billion stemming from Danske’s systematic failures to enact functional money-laundering controls. The settlement focused on problems in Danske’s Estonia branch which advertised itself to shady characters as an easy place to transfer large sums of money with little oversight.  That money then passed into the U.S. system as it was processed in dollars.  As Deputy Attorney General Lisa Monaco said in announcing the settlement, “Whether you are a U.S. or foreign bank, if you use the U.S. financial system, you must comply with our laws.”  As part of the settlement, Danske paid a $413 million fine to the SEC, in a stark reminder that the SEC is also a regulator with oversight for money-laundering violations.
  2. LaFarge: On October 18, 2022, Lafarge S.A. pleaded guilty to providing funds to terrorist organizations. Lafarge, a building materials manufacturer, paid funds to ISIS and the al-Nusrah Front (ANF) in exchange for “protection” for its cement plant in Syria during the Syrian civil war.  For these actions, Lafarge paid a $778 million penalty, or approximately ten times the amount of profit earned from the scheme.
  3. USAA: The USAA Federal Savings Bank paid $140 million in penalties on March 17, 2022. USAA admitted that its anti-money laundering (AML) controls were inadequate to meet the requirements of the Bank Secrecy Act (BSA).  USAA specifically admitted that it was failing to file adequate and timely Suspicious Activity Reports (SARs).
  4. National Bank of Pakistan: On February 24, 2022, the National Bank of Pakistan paid $55.4 million after an investigation by federal and New York state officials found that the bank’s New York branch failed to maintain an adequate AML compliance program. This latest fine came after the bank had previously been found to have an inadequate compliance program and had promised to remedy the deficiencies.
  5. Robinhood: The New York Department of Financial Services issued a $30 million penalty on Robinhood’s crypto division for failing to meet basic AML compliance requirements on August 1, 2022. The regulator found “significant deficiencies” in the staffing and resources Robinhood devoted to transaction monitoring and “critical failures” in the company’s cybersecurity infrastructure.  Despite these clear deficiencies, the company certified compliance with the state’s AML requirements.
  6. BitMEX: In February and March 2022, the three founders of the crypto exchange BitMEX all agreed to pay $10 million each, for a total of $30 million, as part of admitting their guilt in designing BitMEX to evade AML rules. This comes on top of a 2021 settlement with the company for an additional $100 million.
  7. Bittrex: On October 11, 2022, FinCEN announced a $29 million settlement with the crypto exchange Bittrex for failing to maintain an adequate BSA compliance program. Bittrex’s “willful” failures meant the company had failed to file any SARs for over three years and had specifically failed to flag hundreds of transactions involving sanctioned jurisdictions.
  8. Wells Fargo: The broker-dealer arm of Wells Fargo was charged by the SEC with failing to file SARs on May 20, 2022. Wells Fargo agreed to pay $7 million to resolve the matter.  Registered broker-dealers have essentially the same compliance obligations as banks under the Bank Secrecy Act, meaning that it’s not just FinCEN that has jurisdiction to look into AML violations, the SEC can too.  This recent settlement was an interesting example of the SEC flexing its AML enforcement muscle and may be a sign of things to come.
  9. CHS Hedging: On December 20, 2022, the Commodities Future Trading Commission (CFTC) announced a $6.5 million settlement with CHS Hedging, a registered futures trading company.  The settlement stemmed from CHS Hedging’s failure to properly implement the AML controls necessary to stop customers from speculative trading and verify sources of funds.
  10. Sterling Bank and Trust: On September 27, 2022, the Office of the Comptroller of the Currency (OCC) issued a $6 million penalty against Sterling Bank and Trust for failing to meet its BSA obligations while evaluating mortgage loan applications, many of which contained false or fraudulent information.

Please contact us if you would like more information on the FinCEN, CFTC, or SEC whistleblower award programs, or if you would like to speak with one of our experienced whistleblower lawyers.  To read more about money laundering and cryptocurrency fraud, please visit our website.  And make the most of an annual tradition by checking out our other Top Ten Lists.

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Annual Whistleblower Insider Top Ten Lists

Every January, Whistleblower Insider looks back at the significant government enforcement actions of the past year. Our Top Ten lists highlight the biggest recoveries and significant enforcement efforts by different government actors in cases of interest to whistleblowers.
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