Capital One Financial has received a $ 290 million fine after admitting to the U.S. Treasury Department that it intentionally violated anti-money laundering requirements between 2008 and 2014.
The problems, which involved a unit serving cash-checking companies and which has since closed, were first revealed years ago. But documents released Friday by the Treasury’s Financial Crimes Enforcement Network contained new details, including Capital One’s admission that it was unable to file reports of suspicious activity, even when it knew of criminal charges against specific clients.
“The failures outlined in this enforcement action are flagrant,” Fincen director Kenneth Blanco said in a press release. “Capital One has intentionally ignored its obligations under the law in a high-risk business unit.”
Bloomberg
A Capital One spokesman said in an email that the McLean-based company, Va, is pleased to resolve the matter, calling it the last remaining government investigation into a now-defunct business and saying the company was fully booked to pay the nine-digit penalty.
“Capital One takes its obligations against money laundering very seriously,” the company spokesman said. “The bank has invested heavily in improving its AML program in recent years under the new AML leadership and has worked closely with regulators and law enforcement to ensure that our processes and compliance protocols are robust and comprehensive. “.
Capital One acquired the check collection group in the 2006 purchase of New York-based North Fork Bank. The unit’s customers included dozens of ATMs in the New York and New Jersey areas, according to a document Fincen released Friday. Services that the unit included processing checks and cash shipments of armored vehicles.
Capital One acknowledged errors related to foreign exchange transaction reports, which banks must file with the government when customers make cash transactions of more than $ 10,000. The $ 422 billion asset admitted to being negligent in failing to report on approximately 50,000 transactions totaling more than $ 16 billion.
Capital One also admitted that it did not file reports of suspicious activity in connection with Domenick Pucillo, owner of numerous checkout companies in the New York area. Pincillo was described on Friday by Fincen as a convicted member of the Genoese organized crime family and the fourth largest customer of Capital One’s business unit that served ATMs.
The bank learned in 2013 about possible criminal charges against Pucillo in New Jersey. However, Capital One later allowed Pucillo’s entities to make more than 20,000 transactions worth approximately $ 160 million through 23 deposit accounts, according to Fincen.
Capital One closed the commercial banking unit that served check-in companies in 2014. Five years later, Pucillo pleaded guilty to conspiring to launder money in connection with loan exchange and gambling proceeds. illegals going through their Capital One accounts, Fincen claimed.
“Capital One’s serious failures allowed known criminals to use and abuse our nation’s financial system uncontrollably, encouraging criminal activity and allowing it to continue and thrive at the expense of victims and other citizens,” Blanco said. “Such failures of financial institutions, regardless of their size and influence, will not be tolerated.”
Fincen said Capital One took significant steps to cooperate with its investigation and troubleshooting, which it took into account in determining the size of the fine assessed. The civil money penalty amounted to $ 390 million, but Capital One was credited with $ 100 million for a fine it paid to the Currency Controller’s Office in 2018.
The OCC imposed an enforcement action on Capital One in 2015 in relation to compliance against money laundering within the same business unit. This consent order was closed in 2019.