The Financial Crimes Enforcement Network, FinCEN, has imposed a $300,000 civil fine, upon a tiny Miami MSB that was facilitating a global network of overseas money service businesses in high-risk jurisdictions, but conducting literally no AML/CFT compliance. These foreign MSB were running a huge number of financial transactions through an MSB that had only five employees, only $4m in assets, and no compliance program in operation.
The company, North Dade Community Development Federal Credit Union, is located in, and is authorized to serve, only the residents of North Dade/Miami Gardens, which is a very low income area. The owners of the MSB reportedly earned 90% of the MSBs profits by allowing an MSB that had 56 foreign MSBs, in Latin America and the Middle East, as its clients to hold sub-accounts at North Dade, and to allow those MSBs run all their US operations through those accounts.
Notwithstanding earlier regulatory efforts to encourage the MSB to operate an effective AML/CFT compliance program, including a 2013 C & D, and other suggestions by regulators on compliance program improvement, FinCEN found a dysfunctional, or completely inoperative,compliance program, with no designated compliance officer.
The funds that flowed through North Dade, totally unsupervised, included, in 2013 alone:
$1.1bn in outgoing wire transfers.
$984m in remote deposit captures.
$54m in cash orders.
Does this sound like a small inner-city credit union ? Not likely. it look like a clearing house for criminal proceeds, money of tax evaders, and possibly even terrorist financing programs. If there was ever a case where FinCEN and Florida MSB licenses should be the subject of revocation proceedings, this is certainly it. One wonders why FinCEN chose not to identify the MSB with the 56 MSB clients, and name the officers of North Dade. Otherwise, how will the financial services industry avoid hiring the individuals involved, when they seek employment ?
Readers who wish to review the complete text of the FinCEN action can find it here*.
*In the matter of North Dade Community Development Federal Credit Union