Former US Bank Risk Officer fined for AML oversight

Michael LaFontaine, former chief risk officer at U.S. Bank has been imposed a fine of $450,000 by the Financial Crimes Enforcement Network (FinCEN) on the 4th March. He was charged for his negligence in failing to impede violation of the Bank Secrecy Act (BSA). 

Aaron Huber tweeted:

Ex-US Bank Risk Officer Fined For AML Failure https://t.co/itJnoFKeKb

— Aaron Huber (@kycisrael) March 4, 2020

The U.S. Bank had placed an automatic transaction monitoring system mistakingly covered the number of alerts, which inhibited the law enforcement’s capability to spot suspicious activities. The bank was fined $613 million over weak money-laundering controls in 2018. U.S. Bank stated the prosecution is specific to Mr. LaFontaine and not against the bank itself. 

Mr. LaFontaine’s spokesperson claimed that numerous steps were taken by Mr. LaFontaine to enhance the bank’s anti-money laundering program. He advocated and even received funding for a system replacement. The steps were, however, described as unsatisfactory to address the deficiencies by FinCEN. 

The Spokesperson stated, “Mr. LaFontaine is proud of the work he did for U.S. Bank for more than a decade, spanning many important areas such as consumer compliance, privacy, vendor management, business continuity planning, and operational risk management,”

According to FinCEN, Mr. LaFontaine was instructed that the bank’s transaction-monitoring system was ineffective and its anti-money laundering staff was stretched too thin. Kenneth Blanco, the FinCEN Director, gave a statement that Mr. LaFontaine’s negligence prevented U.S. Bank from filing reports about suspicious and potential criminal activity. 

Mr. Blanco further stated that FinCEN encourages technological innovations to manage money laundering but the technology must be used properly.