M&T Bank (MTB) has been ordered to forfeit $560,000 that a teller laundered for drug traffickers.
The teller converted proceeds of illegal drug sales from small denominations to $100 bills in at least eight transactions, ranging from $20,000 to $100,000, without making the necessary reports, according to a complaint for forfeiture filed by the government in February. Banks are required by law to submit reports on any cash transaction in excess of $10,000.
The forfeiture was announced today by Maryland U.S. Attorney Rod Rosenstein.
Chet Bridger, a spokesman for Buffalo, N.Y.-based M&T, didn't immediately respond to an e-mail and phone call requesting comment on the forfeiture.
The M&T teller in the case, Sabrina Fitts, 29, was sentenced to a month in prison followed by eight months of home detention for her role in the filing failure. She worked at the bank's Perry Hall, Md., branch outside of Baltimore.
Fitts was paid a 1% fee by a member of a drug trafficking organization for each transaction made without filing a currency report, according to the forfeiture complaint.
The headlines have been unkind to M&T in recent months. The bank and federal law enforcement officials were conducting an investigation of $5 million of potentially fraudulent loans made by a former loan officer, according to news reports this spring.
Compliance issues -- especially in regards to anti-laundering controls -- have been a broader issue for the $90 billion-asset M&T, stalling its takeover of Hudson City Bancorp (HCBK); the deal was announced nearly two years ago. The Federal Reserve has delayed the deal twice and pushed M&T to bolster its internal controls.
M&T is spending $200 million to fix technology and compliance issues, and Chief Executive Robert Wilmers has urged shareholders to be patient and promised them the Hudson City deal is still worthwhile.
Regulators haven't given any assurances that they'll approve the acquisition, which was originally valued at $3.7 billion when it was announced in August 2012.