FinCEN slams Capital One with $390m fine for “egregious” AML breaches

January 19, 2021

FinCEN has fined Capital One with a $390m civil money penalty for engaging in both wilful and negligent violations of the Bank Secrecy Act.

The bank has admitted to wilfully failing to implement an anti-money laundering (AML) programme, failing to file thousands of suspicious activity reports (SARs) and causing millions of dollars of suspicious transactions to go unreported in a timely and accurate manner.

The violations occurred between 2008 and 2014 on the back of Capital One establishing the Check Cashing Group as a business unit within its commercial bank.

FinCEN alleges that Capital One was aware of a number of compliance and money laundering risks and that the financial institution was even warned by regulators, warnings that the bank is accused of having ignored.

“The failures outlined in this enforcement action are egregious,” said Kenneth A. Blanco, director at FinCEN. “Capital One wilfully disregarded its obligations under the law in a high-risk business unit. Information received from financial institutions through the Bank Secrecy Act plays a critical role in protecting our national security, and depriving law enforcement of this information puts our nation and our people at risk. Capital One’s failures did just that.

“Capital One’s egregious failures allowed known criminals to use and abuse our nation’s financial system unchecked, fostering criminal activity and allowing it to continue and flourish at the expense of victims and other citizens.

“These kinds of failures by financial institutions, regardless of their size and believed influence, will not be tolerated. Today’s action should serve as a reminder to other financial institutions that FinCEN is committed to protecting our national security and the American people from harm and we will bring appropriate enforcement actions where we identify violations.”

The fine adds to the $80m fine Capital One was slammed with in 2020 by the Office of the Comptroller of the Currency after a massive data breach in 2019 that exposed the private data of 106 million accounts.