Puerto Rico’s Financial System Rocked by $15 Million Penalty for Bank Secrecy Act Violations

Washington D.C. Imposes Staggering Fine on Puerto Rico-Based Bank

The United States has imposed a significant penalty of $15 million on Puerto Rico-based Bancrédito International Bank and Trust Corporation (Bancrédito) for willful violations of the Bank Secrecy Act (BSA) and its implementing regulations. This marks the first-ever enforcement action against a Puerto Rican International Banking Entity (IBE), and includes the first-ever violation for failure to implement an Anti-Money Laundering (AML) program under 31 C.F.R. 1020.210(b).

Bancrédito’s Violations

According to officials, 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 conducting required due diligence and reporting. The bank failed to comply with its reporting obligations, allowing for years of unreported suspicious activity, including transactions linked to foreign bribery and money laundering.

Egregious Actions Put US Financial System at Risk

The Financial Crimes Enforcement Network (FinCEN) alleged that Bancrédito admitted to willfully violating the BSA by failing to timely report suspicious transactions to FinCEN, establishing a due diligence program for correspondent accounts established in the United States, and implementing an AML program. The bank’s actions were deemed so egregious that they put the integrity of the US financial system at risk.

Significant Blow to Bancrédito

The $15 million penalty is a clear message from FinCEN that the era of easy money laundering through Puerto Rican IBEs is over. “With today’s action, we are sending a strong message to all international banking entities that operate in the United States: you must comply with our laws and regulations,” said FinCEN Director Andrea Gacki.

The penalty marks a significant blow to Bancrédito, which was once the oldest and largest IBE in Puerto Rico. The bank’s failure to implement an AML program and conduct due diligence on correspondent accounts allowed for nearly unfettered flow of funds through the US financial system, putting national security at risk.

Assistance from Puerto Rico Office of the Commissioner of Financial Institutions

FinCEN appreciates the assistance of the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF) in this matter. The Enforcement and Compliance Division is responsible for investigating violations of the BSA.

The full consent order between FinCEN and Bancrédito can be viewed online.