Merchants Bank of California Fined $8m by OCC and FinCEN

Feb 27, 2017

The Financial Crimes Enforcement Network and Office of Comptroller of the Currency (OCC) announced penalties of $1 million and $7 million, respectively, for Merchant Bank’s alleged willful violations of BSA regulations. Investigations carried out by the regulators found the Bank to have a deficient BSA/AML Program, especially in the areas of risk assessment, AML controls, suspicious activity reporting and customer due diligence.

The enforcement action states that several violative transactions were processed by the Bank on behalf of money service businesses (MSBs) owned or managed by Bank insiders who compelled staff to process illegal transactions under duress.

Bank insiders also allegedly interfered with staff’s attempts to investigate suspicious activity related to these transactions.

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