Puerto Rico Financial Institution Hit with $15 Million Penalty for Willful Violations of Bank Secrecy Act

The Financial Crimes Enforcement Network (FinCEN) has imposed a $15 million civil money penalty on Bancrédito International Bank and Trust Corporation, a Puerto Rican international banking entity, for willfully violating the Bank Secrecy Act (BSA) and its implementing regulations. This marks FinCEN’s first enforcement action against a Puerto Rican IBE and includes the first violation for failure to implement and maintain an Anti-Money Laundering (AML) program under 31 C.F.R. 1020.210(b).

Violations

According to FinCEN Director Andrea Gacki, Bancrédito processed millions of dollars in suspicious transactions through the United States on behalf of high-risk customers. The bank:

Failed to establish a due diligence program for correspondent accounts
Ignored violations cited by its primary regulator, the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF)
Failed to timely report suspicious transactions to FinCEN
Did not implement and maintain an AML program

Suspicious Transactions

The transactions included:

Suspicious activity by a Bancrédito executive
Suspicious activity involving customers in the high-risk jurisdiction of Venezuela, including customers linked to foreign bribery and money laundering
Failure to timely and accurately file SARs (Suspicious Activity Reports) deprives law enforcement of critical financial intelligence used to safeguard the financial system from illicit use and combat money laundering.

Consequences

Bancrédito’s failure:

Jeopardized the integrity of the United States financial system
Allowed an unfettered flow of funds through the U.S. financial system
Further compromised the effectiveness of AML programs

Penalty and Significance

The $15 million penalty is a result of FinCEN’s first enforcement action against a Puerto Rican IBE, highlighting the importance of implementing and maintaining effective AML programs to prevent money laundering and other financial crimes. As Director Gacki said, “With today’s action, FinCEN is sending the message that the era of easy money laundering through Puerto Rican IBEs is over.”