Fincen announces Shinhan Bank America will pay $15M for BSA Violations

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WASHINGTON — The Financial Crimes Enforcement Network announced Friday a $15 million civil penalty against New York City-based Shinhan Bank America for willful violations of the Bank Secrecy Act involving transactions connected to tax evasion, public corruption and money laundering.

"SHBA willfully disregarded its obligations under the [Bank Secrecy Act] to maintain an effective anti-money laundering program and to identify and report suspicious transactions to Fincen, despite being informed of its deficiencies as far back as 2015," said Fincen's director, Andrea Gacki. "Today's action should serve as a reminder to banks of all sizes that [anti-money-laundering] program deficiencies must be promptly and effectively addressed, and that Fincen takes seriously repeated failures to remediate violations of the BSA."

Fincen said in its consent order leveling the penalty that since 2015 when the bank had been notified that it was violating the BSA, it continued to break the law even after the FDIC issued a consent order in 2017 requiring the bank to take corrective actions.

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The FDIC said, in a release accompanying Friday's coordinated agency actions, that it also assessed a civil penalty of $5 million for related violations and that the payment of $15 million will satisfy both FDIC and Fincen assessments. The New York State Department of Financial Services will also assess a separate penalty of $10 million for related violations.

"The FDIC determined that the bank failed to implement an adequate AML Program over an extended period of time," FDIC's release noted. "The inadequate BSA/AML internal controls resulted in the Bank being unable to adequately identify and manage illicit financial activity risk to the institution."

Fincen has worked with banks' primary prudential regulators to penalize BSA/AML violations before. In collaboration with the Office of the Comptroller of the Currency in March last year, Fincen and the OCC charged USAA Federal Savings Bank a combined $140 million for violations of the Bank Secrecy Act.

Shinhan Bank, when reached for comment, indicated Friday's enforcement actions included various mandates that could ultimately improve customer confidence in the bank.

"As part of this process, the government acknowledged that Shinhan Bank America has taken steps to strengthen compliance, including dedicating additional resources to improving the AML program, significantly increasing its AML staffing, adopting improved BSA policies and procedures, and investing in a sophisticated transaction monitoring system, they wrote in an email. "We are proud of the steps we continuously take to remain a trustworthy financial partner to our many valued customers."