Capital One Penalized $390M for ‘Willful’ Violation of the Bank Secrecy Act

Financial Crimes Enforcement Network (FinCEN) has imposed $390 million as penalty on Capital One for violating both “willful and negligent violations of the Bank Secrecy Act (BSA) and its implementing regulations.”

The Bank has agreed that it has purposely failed to come up with an effective strategy to comply with the Anti-Money Laundering program. The bank has also admitted to deliberately turning a blind eye on the thousands of suspicious transactions. 

The regulators believe that the violations have been occurring since 2008 and are linked with the Check Cashing Group of Capital One. 

Domenick Pucillo, Genovese’s crime family’s associate has been using the bank for money laundering but the bank has failed to report these suspicious transactions and has deliberately neglected the occurrence of such crime. Even after being aware of Pucillo’s association with the illegal activity, Capital One still enabled over 20,000 transactions worth $160 million.

Director of FinCEN, Kenneth Blanco, has declared the violation to be “egregious” and has expressed his views that the bank’s behaviour has put the people of the country at risk for violating law enforcement guidelines. 

FinCEN has assessed over $390 million worth fines but under the settlement, they have agreed to give the bank credit for a $100 million penalty. This was paid to the Office of Comptroller. Financial institutions and banks are required to comply with the Bank Secrecy Act to prevent financial crimes. 

The Bank Secrecy Act requires banks and financial institutions to identify their potential customers and record their basic information to verify their identity. The transactions of funds of more than $10,000 must be investigated. Any suspicious activity regarding the transactions must be reported to the concerned authorities and failing to do so can result in penalties. Capital one has failed to comply with all these regulations and has allowed money laundering to be done through their platforms.