Large Korean bank to pay a huge fine for violating AML law

NEW YORK, April 20 (Reuters) – Industrial Bank of Korea 024110.KS, one of South Korea’s key banks, is alleged with $35 million as a penalty to settle charges of violating New York laws to prevent money laundering and other dubious transactions, a state regulator remarked on Monday.

Industrial Bank of Korea settles U.S., New York criminal probes over $1 billion Iran transfer https://t.co/EyxRjzQ7BS

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The Seoul-based bank also signed a consent document in which it consented to improve its customer due diligence and management governance.

Linda Lacewell, superintendent of New York’s Department of Financial Services, remarked that the settlement reconciled allegations that IBK breached New York’s Bank Secrecy Act and anti-money laundering laws.

She stated IBK and it’s New York branch experienced a lack of internal controls from 2010 to 2019, which persisted even after an agreement in 2016 with the department and the Federal Reserve Bank of New York to address its flaws.

She stated this led to IBK’s failure in 2011 to prevent a $1 billion fraud where a client allegedly portraying himself as a small-business owner used fraud contracts and receipts to convert funds he received in Korean won from a regulated IBK account into U.S. dollars and then payout the cash worldwide.

A lawyer for IBK refused to immediately respond to the statements. 

The bank-owned a total of $242 billion of assets as of June 30, 2019, with about $180 million in its New York branch. It has been licensed to work in the state since 1990.