A recent Department of Treasury’s Financial Crimes Enforcement Network (FinCen) enforcement action raised the eyebrows of many compliance professionals, as Thomas Haider, Moneygram’s CCO, during a period of sustained money-laundering violations by the company, was individually prosecuted in the first anti-money laundering (AML) enforcement action for the failure to implement a compliance program. In a civil settlement, Haidar agreed to a fine of $250,000 and to not work in the industry for three years. The question for CCOs is: Does this portend a shift in enforcement strategies?
There was no doubt as to the culpability of MoneyGram, which contemporaneously agreed to a $100 million penalty for failures in its AML compliance program. Haider’s role in this included deliberately structuring the company’s AML compliance program to restrict analysts’ access to analytical information regarding cumulative fraud analyses and specific analysis of individual MoneyGram money-transfer centers. Haider restricted access to such information with the apparent intention to prevent analysts from generating information needed to support the filing of a Suspicious Activity Report (SAR). As a result, even though there were a number of company outlets that were identified as engaged in consumer fraud, the company did not file any SARs for these entities. Haider also designed, but apparently never implemented, a more robust compliance program.
Yet, as one commentator noted, “Haider was charged willfully failing to implement an AML policy at MoneyGram. There are many definitions of willful but, at a minimum, it means more than negligent. It means more than simply doing a bad job. There must be some evidence of intent to do something wrong.” If Haider was prosecuted for this willful violation for failing to implement a compliance program, rather than active obstruction of compliance, it would seem to move government enforcement toward something closer to a negligence standard. If such a move is true, it could well be a worrisome development for CCOs.