New Jersey bank fined US$5 million for anti-money laundering failures

By Christine Duhaime | March 30th, 2010

Pamrapo Savings Bank, a subsidiary of Pamrapo Bancorp Inc., pleaded guilty in U.S. District Court in Trenton, New Jersey, to conspiracy to violate the Bank Secrecy Act for failing to file currency transaction reports and suspicious activity reports, and willfully failing to maintain adequate anti-money laundering programs. The failures to file reports were in connection with approximately US$35 million in illegal and suspicious financial transactions handled by the Pamrapo Bank. 

The Pamrapo Bank also admitted to making false and misleading statements to bank regulators to prevent regulatory oversight and enforcement of its anti-money laundering compliance programs. The Pamrapo Bank agreed to forfeit US$5 million to the U.S. and pay a civil money penalty of US$5 million assessed by the Office of Thrift Supervision.

The Bank Secrecy Act is a federal U.S. law enacted to prevent banks from being used to facilitate and perpetuate criminal activity, such as narcotics trafficking, organized crime, terrorist financing and other financial crimes.

It requires banks to file certain reports, including currency transaction reports  and suspicious activity reports. Currency transaction reports must be filed for every currency transaction involving more than US$10,000. Suspicious activity reports must be filed in instances of suspicious activity related to a violation of law, including transactions suspected of involving money laundering, tax crimes and transaction structuring.

Structuring involves conducting multiple cash transactions, each in an amount under US$10,000, to evade a bank’s obligation to file a currency transaction report and camouflage illegal activities from law enforcement. Additionally, under the Bank Secrecy Act, banks are required to establish and maintain an adequate anti-money laundering compliance program.

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