Bank Settles OFAC Charges for "Kingpin" Sanctions Violations

A banking subsidiary of American Express settled OFAC charges for multiple violations of the Foreign Narcotics Kingpin Sanctions Regulations ("FNKSR"), 31 C.F.R. Part 598.

In an enforcement release, OFAC stated that the violations occurred when the bank failed to block an account whose secondary cardholder was designated by OFAC in connection with illegal drug distribution and money laundering. OFAC determined that an employee of the bank erroneously dismissed an alert that the individual was red-flagged under the FNKSR. OFAC found further human error that resulted in the account being reopened after the bank's AML review team had flagged it. While the account was eventually closed, the account holders were able to conduct transactions worth more than $150,000 during the time period between the OFAC designation and the account's closure.

OFAC determined that the violations were the result of human error and sanctions compliance program deficiencies, and OFAC stated that the violations were not voluntarily disclosed but were non-egregious. Further, OFAC recognized that the bank "cooperated with OFAC and promptly responded to all requests for information throughout the investigation," and that it undertook remedial measures "intended to minimize the risk of recurrence of similar conduct in the future."

In the settlement, the bank agreed to remit $430,500 to settle potential civil liability.