The Financial Crimes Enforcement Network, or FinCEN, is an enforcement branch of the U.S. Treasury Department. FinCEN was established in 1990 to investigate financial crimes, such as money laundering and fraud. In 1994, the branch increased in power when it was delegated with authority to enforce regulations under the Bank Secrecy Act (BSA).
Today FinCEN issued a financial penalty assessment against Altima, Inc., located in Norcross, Georgia. Altima is a money services business and therefore subject to specific reporting regulations under the BSA. Typically, a money services business is any entity that engages in transactions relating to money orders, traveler’s checks, check cashing and currency exchange. Such businesses are required to register with FinCEN once every two years, in addition to other reporting requirements.
According to the assessment, Altima failed to comply with the registration requirements and implement an anti-money laundering program. The assessment alleges that Altima engaged in numerous monetary transactions with entities in Iran. The assessment goes on to state the potential civil penalties it has the ability to impose, specifically, up to $5,000 for each registration violation and up to $25,000 for failure to implement an anti-money laundering program. However, FinCEN only imposed a $5,000 fine against Altima.
The imposition of only $5,000 is great news for Altima. The fact that Altima failed to register repeatedly and implement the required program could have resulted in much larger fines. Altima was owned and managed by one individual, and dissolved in September 2010, which is perhaps why the assessment is minimal. The last money services business that received an assessment, in March of this year, was required to pay $25,000 in civil fines.
Any institution that engages in monetary transactions within the U.S. must be aware of FinCEN and it’s regulatory power. Further, for institutions engaging in transactions with sanctioned countries, such as Iran, investigations by the Office of Foreign Assets Control (OFAC) is also a possibility. It is extremely important to follow proper compliance procedures regarding the U.S. financial system in order to avoid legal action.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or firstname.lastname@example.org.