FinCEN Fines Bank for Failing to Report Suspicious Activity Tied to Judicial Corruption (with Lofchie Comment)

The Financial Crimes Enforcement Network ("FinCEN") fined the First National Community Bank ("FNCB") for failing to file suspicious activity reports on transactions involving illicit proceeds from a judicial corruption scheme.

The judicial corruption scheme involved two judges who were convicted of misusing their positions as judges to profit from, among other things, sending thousands of juveniles to detention facilities in which they had a financial interest. According to FinCEN, despite numerous red flags indicating suspicious activity, FNCB failed to file a single suspicious activity report related to these accounts until after one of the judge's guilty plea.

FinCEN fined FNCB $1.5 million.

Lofchie Comment: Following on the heels of a statement by the SEC's Enforcement Director (linked below) that firms are not being sufficiently energetic in filing suspicious activity reports, this is a further warning to firms to file early and often.

See also: SEC Division of Enforcement Director Urges Greater Diligence to Improve AML Compliance (with Lofchie Comment) (February 25, 2015).