Financial Sanctions Implemented Against Puerto Rican Bank for Money Laundering Violations

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Washington, D.C. - $15 Million Civil Money Penalty Imposed on Bancrédito International Bank and Trust Corporation

The Financial Crimes Enforcement Network (FinCEN) has taken action against Bancrédito International Bank and Trust Corporation, imposing a $15 million civil money penalty for wilful violations of the Bank Secrecy Act (BSA) and its implementing regulations.

Wilful Violations of the BSA

According to FinCEN’s Director Andrea Gacki, “Bancrédito processed millions of dollars in suspicious transactions through the United States on behalf of high-risk customers, providing correspondent accounts to foreign financial institutions without the required due diligence and reporting.” She added that “with today’s action, FinCEN is sending a message that the era of easy money laundering through Puerto Rican IBEs is over.”

Violations and Admissions

Bancrédito admitted to wilfully violating the BSA between October 2015 and May 2022 by:

Failing to timely report suspicious transactions to FinCEN
Not establishing a due diligence program for correspondent accounts
Not implementing an anti-money laundering (AML) program

Failure to Comply with Reporting Obligations

The bank also failed to comply with its Suspicious Activity Report (SAR) reporting obligations, neglecting to file SARs for years despite being cited by its primary regulator, the Puerto Rico Office of the Commissioner of Financial Institutions. The transactions in question included suspicious activity by a Bancrédito executive and customers linked to foreign bribery and money laundering in high-risk jurisdictions such as Venezuela.

Consequences

Bancrédito’s failure to establish a due diligence program for correspondent accounts held at the bank by foreign financial institutions allowed an unfettered flow of funds through the US financial system, jeopardizing its integrity. The bank also failed to implement and maintain an AML program since March 15, 2021, which is required under the BSA.

Significance

This enforcement action marks FinCEN’s first against a Puerto Rican International Banking Entity (IBE) and includes the first violation for failure to implement and maintain an AML program under 31 C.F.R. 1020.210(b), also known as the “Gap Rule”.

Collaboration and Appreciation

FinCEN appreciates the invaluable assistance of the OCIF in this matter, which highlights the importance of effective anti-money laundering measures to prevent financial crimes.

Takeaway

This enforcement action serves as a warning to all financial institutions that failure to comply with anti-money laundering regulations will be met with severe consequences.