WASHINGTON — Regulators announced Thursday that they are imposing $4 million in fines against Gibraltar Private Bank and Trust Co. in Coral Gables, Fla., for defective anti-money-laundering programs.
The Treasury Department's Financial Crimes Enforcement Network announced the $4 million civil money penalty against the bank, including $2.5 million levied by the Office of the Comptroller of the Currency.
The $1.6 billion-asset bank failed to file at least 120 suspicious activity reports on time between 2009 and 2013, according to Fincen. Fincen said that may have helped mask a $1.2 billion Ponzi scheme orchestrated by Scott Rothstein, a Florida attorney who has since been sentenced to 50 years in prison.
Gibraltar admitted to violating Bank Secrecy Act provisions with Fincen but neither admitted nor denied wrongdoing in a separate OCC order.
"We may never know how that scheme might have been disrupted had Gibraltar more rigorously complied with its obligations under the law," Fincen Director Jennifer Shasky Calvery said in a press release. "This bank's failure to implement and maintain an effective AML program exposed its customers, its banking peers, and our financial system to significant abuse."
After Gibraltar's Bank Secrecy Act compliance programs were deemed ineffective in a 2010 examination report, the now-defunct Office of Thrift Supervision issued a consent order requiring the bank to modify its policies and procedures by reinforcing its customer identification, risk assessment and other AML compliance programs.
The initial October 2010 order was replaced in October 2014 with a new consent order from the OCC.