The Federal Reserve Board announced Friday that it had issued a cease-and-desist order instructing Riggs National Corp. of Washington to substantially improve its compliance with the Bank Secrecy Act.
The order was also issued against Riggs International Banking Corp. of Miami.
Riggs National was ordered to improve its board's oversight, conduct a review of the management, and develop a risk management plan. The Miami subsidiary was ordered to comply with laws against money laundering, properly file suspicious-activity reports, and review previous transaction for suspicious activity. (Riggs said in April that it would close the Miami company.)
The Fed order came a day after the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network fined Riggs National's bank subsidiary $25 million. That same day the OCC issued a new, stricter consent order.
The OCC said that it issued the fine because the $6 billion-asset Riggs failed to implement an effective anti-laundering program and properly monitor its foreign banking relationships, specifically those with Saudi Arabia and Equatorial Guinea. In its new consent order, the regulators point to "tens of millions of dollars in cash withdrawals" from accounts related to the Saudi Arabian embassy. It also said that "millions of dollars" from the Equatorial Guinea account were deposited into a private investment company owned by one of the country's officials and into a private investment company owned by the Riggs Bank employee in charge of overseeing the account.
The new OCC order, replacing one issued in July, came nearly two months after the regulator designated Riggs Bank as a troubled institution.
Riggs National said in a press release that it remains "well capitalized" and "is 100% committed to fulfilling all of our regulatory responsibilities, and doing our part to protect the financial system."
