TD now facing into potential €4BN fines, who for AMLA chair and FinCEN feedback on SARs

TD now facing into potential €4BN fines, who for AMLA chair and FinCEN feedback on SARs

We have a real mixed bag for you today. At one end of the scale is the ever-deepening crisis at Canada’s TD Bank where analysts are now telling shareholders to prepare for a plethora of fines of up to $4 billion. Remember that’s twice the previous estimate of the downside Canada’s second-biggest lender faced. It’s also multiples of the $450 million the bank has currently provided for.

In Europe meanwhile, the top job in AML and AFC was advertised by the EU. The Chair of the new AML Authority (AMLA) will oversee the agency’s operations, lead the executive board of five and report to the agency’s oversight board. The role commands a €290,000 salary, not subject to national tax but a preferential EU agency rate, along with other allowances, including paid-for education for children and assistance in seeking spouse employment in Frankfurt; on the downside, you will have to love meetings – as there will be endless catch-ups! The successful candidate will also be responsible for the agency’s culture and vision – and after all the years AMLA has taken to establish, be ready to hit the ground running (we hope)!

In the US, FinCEN has given feedback on SAR reporting and also provided updates on how it is tackling the opioid crisis. While in Singapore, the massive money laundering scandal ended with a whimper. We report.

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WEEK IN FOCUS

TD WOES CONTINUE: For some, when it rains, it pours. But forget a bit of drizzle or even a rainstorm - TD Bank is currently trapped in the middle of a seemingly endless monsoon.

A raft of money laundering failings at the lender's US arm led to it setting aside $450 million to deal with a raft of expected fines. That now looks like it may be (relative) chump change compared to what the penalties could mount up to. Analyst predictions of potential charges of up to $2 billion were doubled to $4 billion when fresh allegations emerged last week of a TD Bank employee taking bribes to funnel illicit money to Colombia.

SINGAPORE CASE CLOSED: Shockwaves were sent through Singapore's financial world last August, when 10 foreign nationals linked to an online gambling ring were arrested in an island-wide raid.

The case turned out to be the biggest money laundering case in Singapore's history, with the group laundering more than $2.2 billion in dirty money sourced from abroad. There was some sense of finality earlier this week, when 36-year-old Su Jianfeng was sentenced to 17 months in jail for his part in the scheme. Su, who has now forfeited 95.5% of his assets to the state, was the 10th and final member of the group to be convicted following the crackdown.

AMLA CHAIR: Do you like Frankfurt? Do you like AML? Do you like a tax-free salary of €290,000? If you found yourself answering ‘who doesn’t?’ to any or all of these, you might be one of those throwing their hat in the ring for the race to be chair of the EU's new AMLA. But don't hang around brushing up your CV - there are already a raft of high profile EU candidates waiting in the wings. Full details of the role were published first on AMLi.

It will be the most important job in European anti-financial crime directly supervising the “riskiest” 40 banks, co-ordinating with the 27 national competent authorities and also ensuring the 27 FIUs are collaborating. Not to mention the international dimension of the job. Of course as we reported Friday because the agency is based in AMLA there is no point in a German applying as the unwritten protocol is the job does not go to a national of the host country. Applicants from France, Spain and Ireland – countries seen as being in the Top 4 of the applying host countries are fancied to take the position. Senior Correspondent Paul O’Donoghue’s analysis is available to read om AMLintelligence.com

***International Anti-Financial Crime Summit 2024 takes place in London on October 9 next. The summit will hear from top banking, regulator, fintech and law enforcement leaders from the UK, EU and North America. The conference is designed for AFC decision-makers motivated by a desire to be professionally successful. Are you attending? Book your place here: International Anti-Financial Crime Summit 2024

SARs, CASPs and GAMING

SUSPICIOUS TRANSACTIONS: Financial institutions file millions of suspicious activity reports (SARs) every year, but just how useful are they? Some insight was provided following the release of new figures from the U.S. Treasury's #FinCEN.

While nearly 16% of #FBI investigations were directly linked to these financial filings, just 22,000 SARs were actually involved in these probes. Some analysts have suggested the numbers raise doubts about the effectiveness of suspicious transaction reporting.

VIRTUAL ASSETS: MONEYVAL, a leading EU AML body, has been busy in recent weeks. The organisation has issued a string of reports evaluating whether countries have upped their AML game to ensure they are complying with FATF’s 40 key recommendations.

Most have seen their ratings improve and that was also partially true for Moldova, which has improved its approach to terrorist financing and sanctions. But MONEYVAL still struck a somewhat downbeat tone when noting how the nation is still falling short in its approach to virtual asset services providers. We explore what was said on AMLintelligence.com

CASINO MONEY LAUNDERING: Finally, last week the Australian Federal Court approved an order for SkyCity to pay $70 million due to lax checks on its wealthy customers. SkyCity, which owns several casinos operating in Australia and New Zealand, had previously agreed to pay $67 million after regulators found its Adelaide casino failed to carry out due diligence on over 120 customers.

This even included cases where “knew customers were the subject of law enforcement interest”. While the two parties had already agreed to the $67 million penalty, the agreement had to be approved by the court, which also ruled that SkyCity would cover the regulator’s $3 million legal costs.

FENTANYL: Financial Crimes Enforcement Network (FinCEN) Director Andrea Gacki attended an outreach event in Tucson, Arizona on Tuesday, where she engaged with small business owners and other key stakeholders about beneficial ownership information reporting requirements under the Corporate Transparency Act.

The exchange was part of the agency’s ongoing efforts to collaborate at the local level in U.S. cities highly impacted by the opioid crisis. In December, the Department of the Treasury launched a Counter-Fentanyl Strike Force to bring together personnel, expertise, intelligence, and resources across key Treasury offices and is jointly led by the Office of Terrorism and Financial Intelligence at Treasury, where FinCEN resides, and IRS Criminal Investigation.

As part of the Strike Force, FinCEN launched a new initiative: The Promoting Regional Outreach to Educate Communities on the Threat of Fentanyl — or PROTECT program. This is a nationwide series of meetings where local and regional banks and local, regional, and federal law enforcement can share information on illicit financial flows, including typologies and red-flag indicators of fentanyl-related activity, and discuss what types of information are particularly valuable when financial institutions report suspicious activity related to fentanyl.

“I’m confident that we will see results from this new chapter of public-private information sharing, to help us all identify related illicit activity and enable the further disruption of fentanyl trafficking,” Gacki told attendees.

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Have a great Wednesday??

Stephen and the team at AMlintelligence.