A Puerto Rico bank took previously this year by regulators will pay a $15 million fine in the very first enforcement action under a two-year-old federal guideline focused on closing spaces in anti-money-laundering enforcement.
Bancrédito International Bank and Trust Corp. — which was positioned in receivership this year by banking regulators in the U.S. area in the middle of a political bribery scandal — consented to the fine after stopping working to effectively keep track of the circulation of worldwide funds through it into the U.S. monetary system, according to an authorization order released by the Financial Crimes Enforcement Network.
Bancrédito “willfully violated” the Bank Secrecy Act and its carrying out policies, according to the order, which was revealed Friday. The order was signed by Ryan Marín, who ended up being receiver of the bank after it was closed down by the Office of the Commissioner of Financial Institutions of Puerto Rico in January.
Marín did not react to an ask for remark.
Under the order, Bancrédito needs to surrender its license to run in the U.S. as a global banking entity and maintain all service records associated with BSA compliance.
Bancrédito breached a BSA policy referred to as the “gap rule,” which worked in March 2021 as part of a regulative effort to require banks that service worldwide banks to abide by anti-money-laundering guidelines, according to Fincen.
Under the guideline, worldwide banking entities in Puerto Rico are now needed to keep anti-money-laundering programs comparable to the wider banking market, Candice Basso, a Fincen representative, stated in an emailed declaration.
Bancrédito “shirked this obligation,” Basso stated in the declaration.
Between 2015 and 2022, Bancrédito improperly kept track of the transfer of funds from accounts connected to a Panamanian bank maintenance business and people in Panama and Venezuela, according to the order.
During this duration, the bank likewise stopped working to submit suspicious activity reports or execute an “adequate” anti-money-laundering program, even after coming under examination from regulators in Puerto Rico, the order states.
Bancrédito supplied “correspondent accounts to foreign financial institutions without the required due diligence and reporting” mandated by the BSA, Fincen Director Andrea Gacki stated in a news release revealing the fine.
“Bancrédito processed millions of dollars in suspicious transactions throughout the United States on behalf of high-risk customers,” Gacki stated.
Bancrédito was established as a global banking entity in 2008 by Julio Herrera Velutini, who is a resident of Venezuela and Italy. It supplied banking services to foreign banks mostly found in Central America and the Caribbean.
In August of 2022, Velutini pleaded innocent to charges of sincere services wire scams and bribery of previous Puerto Rico Gov. Wanda Vázquez as part of an effort to weaken an examination into Bancrédito that started in 2019 in the middle of Vázquez’s election project, according to a U.S. Department of Justice press release at the time and report.
Around the exact same time, Vázquez was detained on charges implicating the previous guv of accepting project allurements.
Enforcement of the BSA’s space guideline is “a long time coming” for entities such as Bancrédito, which can function as a “first-line stop for where money gets into the United States,” according to Andrew Bernstein, a white-collar criminal defense attorney at Armstrong Teasdale who wasn’t associated with the matter.