What TD Bank knew about AML probe and didn’t say, identity red flags make up 40pc of US SARs and cyber test for EU banks (2024)

CANADA’s TD Bank knew about a US-led AML inquiry into the lender six months before disclosing the matter, it’s been claimed.Now analysts estimate the bank could be exposed to fines in the range of US$500M-US$1BN over the investigation being led by US prosecutors.

The allegation comes at the same time as it’s been revealed a staff member in New Jersey has been charged with creating shell companies and helping launder money for a Colombian drugs gang. The US DOJ investigation found that millions of dollars were laundered to Colombia through accounts opened by the TD Bank employee since early 2022.

The bank faces a multitude of problems over claims executives knew about an AML probe by the U.S. Department of Justice more than six months before the company publicly disclosed the investigation. The controversy derailed its acquisition of Tennessee-based First Horizon Bank and could lead to a multitude of legal actions.

FinCEN on Tuesday revealed that approximately 1.6 million suspicious reports it received were related to identity, indicating a staggering $212 billion in suspicious activity. The bureau said the activity accounted for more than 40pc of the Suspicious Activity Reports (SARs) it received in 2021, it said in its latest Financial Trend Analysis (FTA). We have the full story. Fines on cryptocurrency exchanges and digital payments companies reached $5.8 billion in fines last year – outstripping for the first time penalties against traditional finance. Not surprisingly the fines were primarily due to deficiencies in AML controls, sanctions violations and other financial crime regulations. Needless to say, Binance tops the list with its record-breaking fine in the US. We report. US Treasury Secretary Janet Yellen announced that over 100,000 businesses have already filed their beneficial ownership data with FinCEN. This new requirement aims to crack down on money laundering through shell companies. Secretary Yellen emphasized the importance of businesses disclosing their beneficial ownership as she visited FinCEN headquarters in Virginia. Danske Bank has recently imposed a new annual fee of €500 on corporate customers, attributing it to regulatory requirements, including AML checks. However, this move has sparked legal threats from one large client and customer complaints.Of course Danske is no stranger to AML controversies and it’s no surprise the lender is trying to recoup some of its outlays. We’ll be watching the legal action by a Norwegian corporate with interest! The Mayor of Amsterdam, Femke Halsema, has issued a dire warning about the escalating drug crisis in the Netherlands, expressing concerns that the country is at risk of becoming a “narco-state.” Mayor Halsema called for a fundamental change in the approach to drug policy to address the significant shift in the country's drug landscape. It’s something we have been reported on for the past two years. Let’s hope the mayor’s words don’t fall on deaf ears! Brazil has long been a frontrunner in embracing digital banking solutions, with a remarkable two-fifths of Brazilians already regular users of online banking. The country's population has shown a strong inclination towards digital financial services, placing Brazil at the highest rates globally. But it comes at a price as Brazil is now a financial crime and fraud breeding ground. We report. Canada's AML agency is stepping up its efforts to combat financial crimes by increasing its reliance on AI and espousing partnerships with banks. We carry an interview with FINTRAC’s Deputy Director for Supervision Donna Achimov.

Meanwhile, the European Central Bank (ECB) has announced its plans to conduct a cyber resilience stress test on 109 banks under its direct supervision in 2024. This stress test will focus on evaluating the banks' ability to withstand cyber threats and ensure their resilience in the face of potential cyberattacks.

HERE’S YOUR MID-WEEK NEWS FEED:

TD BANK IN BIG TROUBLE OVER US AML PROBE:CANADA's #TDBank knew about a US-led AML inquiry into the lender six months before disclosing the matter, it's been claimed. Analysts estimated the bank could be exposed to fines in the range of US$500M-US$1BN over the investigation being led by US prosecutors. The allegation comes at the same time as it's been revealed a staff member in New Jersey has been charged with creating shell companies and helping launder money for a Colombian drugs gang.

FINCEN REVEALS IDENTITY RED FLAGS:#FinCEN on Tuesday revealed approximately 1.6 million reportssuspiciousreports it received were related to identity - indicating $212 billion in suspicious activity. The bureau today issued its Financial Trend Analysis (FTA) on information linked to identity-related suspicious activity in Bank Secrecy Act (BSA) reports filed for 2021. The 1.6m suspicious reports accounted for 42% of the reports filed in that year.

SURGE IN CRYPTO FINCRIME FINES:CRYPTO and digitalpaymentsenterprises collectively paid a $5.8 billion in fines last year - outstripping for the first time penalties on traditional finance. The fines were, primarily for deficiencies in customer verification processes, anti-money laundering (AML) controls, and violations of sanctions and other financial crime regulations, said the Financial Times. The total includes the $4.3 billion penalty imposed on the #crypto exchange #Binance, characterized as a significant warning by U.S. prosecutors.

*** The ’European Anti-Financial Crime Summit 2024’ is taking place in Dublin on May 16 2024. The leading AML and FCC conference attracts 450 decision-making executives from across the EU, UK and elsewhere. The 2024 will also feature the importance of the transatlantic FCC alliance. EAFCS2024 at the RDS convention centre in central Dublin next year will also have extended exhibition and networking opportunities. Have you booked your tickets yet? You can do so HERE:

EARLY BIRD RATES STILL AVAILABLE 

100,000 FILE BO REGISTRATIONS IN US:MORE than 100,000 businesses have so farfiledtheir beneficial ownership data with FinCEN, Treasury Secretary Janet Yellen said. She announced as she visited FinCEN headquarters to promote the new requirement that businesses file disclosures of their beneficial ownership, as part of new laws to crack down on money laundering through shell companies. Since the registration opened a week ago, Yellen said more than 100,000 companies have registered ownership data.

DANSKE BANK FACING LEGAL ACTION:#DANSKE Bank has blamed regulatory requirements - including#AMLchecks - for new €500 annual fees it has imposed on corporate customers. But the move has already led to the threat of legal action by one large client and customer complaints. On January 1, the Copenhagen-based lender introduced a new annual customer fee of NOK 5,000 or €500 in Norway. The fee must be paid by the bank's large corporate customers, in the so-called "Large & Institutional Customers" segment.

NACRO-STATE WARNING:THE Mayor of Amsterdam, Femke Halsema has issued a direwarningabout the escalating drug crisis in the Netherlands – saying the country was at risk of turning into a narco-state. “Without a fundamental change of course, the Netherlands is in danger of becoming a narco-state,” she warned. In a call to action the Mayor, renowned for her progressive views, called attention to the significant shift in the country’s drug landscape and urged a fundamental change in the approach to drug policy.

BRAZIL FINCRIME HOTSPOT INSIGHT:Brazil has emerged as a frontrunner with its population displaying an inclination towards embracing digitalbankingsolutions. According to a study conducted by #EY in 2017, a staggering two-fifths of Brazilians were already regular users of online banking, placing the country among the highest rates globally. This trend continued to gain momentum, as evidenced by a survey conducted by #Accenture in 2020, which revealed that 44% of customers in Brazil possessed digital-only accounts.

#FINTRAC INTERVIEW:CANADAs AML agency is increasing its reliance on AI to detect suspicious transactions, betting the use of the latest#will help better fight financial crimes, a top official said. The Financial Transactions and Reports Analysis Centre (FINTRAC) raised a few eyebrows last month when it fined the country's two biggest banks - Royal Bank of Canada (RY.TO) and CIBC (CM.TO) - for a total of C$9 million ($6.7 million) for violations that included failing to submit suspicious transaction reports, setting a record for fines issued on individual banks.

ECB LAUNCHES STRESS TESTS:The European Central Bank (ECB) has announced plans to conduct a cyber resilience stress test on 109 banks under its direct supervision in 2024. In a statement, the #ECB revealed the stress test will focus on 109 directly supervised banks in 2024.

☝️ We have special offers for Individual and Corporate Members. Your Chief Compliance Officer, Department Head, or Chief Librarian can contact us about our Enterprise Membership for your organisation. Please reach out to James Treacy atjtreacy@amlintelligence.comfor further information.

Join the world’s fastest-growing FinCrime community andbecome anAML Intelligencemember.

Have a great Wednesday 👋

Stephenand the team at AMlintelligence.