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FinCEN AND IRS RELEASE MSB BSA/AML EXAMINATION MANUAL9 December 2008 - The Financial Crimes Enforcement Network (FinCEN) and the Internal Revenue Service (IRS) released today the MSB Bank Secrecy Act/Anti-Money Laundering Examination Manual (MSB BSA/AML Examination Manual). The manual's release marks an important step forward in the effort to ensure the consistent application of the BSA to all Money Services Businesses. The MSB BSA/AML Examination Manual was developed by the Financial Crimes Enforcement Network (FinCEN), Internal Revenue Service (IRS), and the state banking agencies through the Conference of State Bank Supervisors (CSBS) and Money Transmitter Regulators Association (MTRA). The MSB BSA/AML Examination Manual emphasizes an organization's responsibility to establish and implement risk-based policies, procedures, and processes to comply with the BSA and safeguard its operations from money laundering and terrorist financing. The BSA/AML examination procedures will guide examiners through an evaluation of an organization's BSA/AML compliance program regardless of its size, complexity or business lines. The MSB BSA/AML Examination Manual provides narrative guidance and resource materials as well as specific examination procedures. This includes an overview of the BSA requirements and the federal and state banking agencies' supervisory expectations in this area. FinCEN is planning telephone conferences to brief the industry and field examiners on the MSB BSA/AML Examination Manual for early 2009. Registration details for the industry calls will be communicated shortly to the industry via separate notice. Money Service Businesses are encouraged to participate in these voluntary sessions. (More information on these events will be released at a later date.). The manual can be found at www.fincen.gov/news_room/rp/msb_exam_materials.html The Conference of State Bank Supervisors (CSBS) is the nationwide organization for state banking, representing the bank regulators of the 50 states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands, and approximately 6,100 state-chartered financial institutions. CSBS also is responsible for improving the quality of state bank supervision by providing department performance evaluation and accreditation programs and supervisory education/training programs for state banking department personnel. The Money Transmitter Regulators Association (MTRA) is a national non-profit organization dedicated to the efficient and effective regulation of money transmission industry in the United States of America. The MTRA membership consists of state regulatory authorities in charge of regulating money transmitters and sellers of traveler's checks, money orders, drafts and other money instruments. Incorporated in Texas in 1989, MTRA is governed by a ten-member board of directors elected to serve two-year terms. Information Contact:
NEWBERG APPOINTMENT TO MTRA BOARDSeptember 2008 - Stephanie Newberg, Deputy Commissioner, Texas Banking Department, has been appointed a member of the board of directors of MTRA to fill the unexpired term of Randal James, who announced his retirement at the end of August, 2008. Mr. James was vice president for the last three years. He was elected to the Board in 2003. Mr. James was honored by the board of directors of both MTRA and CSBS at the MTRA annual conference in September 2008 for outstanding services to both associations and for excellent public service. Stephanie Newberg is not a stranger to MTRA. She has been an active participant for a number of years. Stephanie joined the Department of Banking in November 1992 overseeing among other areas the regulation of money service businesses. She is also active on various BSAGAA committees. Stephanie is very excited about joining the board and contributing to the MTRA mission of advancing the efficient and effective regulation of the money transmission industry. MTRA HOLDS ANOTHER SUCCESSFUL CONFERENCESeptember 2008 - MTRA's 18th Annual Conference was held September 2-5, 2008 at Snow King Resort, Jackson Hole, Wyoming. More than 200 regulators and industry officials attended the four day event, representing 28 member states and numerous money transmitters across the country. The conference was opened by MTRA President Joseph E. Rooney of Maryland who outlined the objectives, goals and accomplishments of the association. Wyoming Commissioner Jeffrey C. Vogel welcomed the conferees to Wyoming and praised the record and achievements of MTRA. The conference included separate, as well as, joint sessions of regulators and industry representatives. In a closed session of regulators, there was a presentation from FinCEN and the IRS on Bank Secrecy Act issues emphasizing the need to improve cooperation between states and federal agencies. This year's theme was "Taking the High Road". The program provided an opportunity to facilitate networking and the exchange of ideas and information between and among industry and regulators. There were timely presentations on Mobile Payments, Private Equity Investments in Money Transmitters, and Monitoring Agents of Money Transmitters. There was also a discussion of the FinCEN case against Sigue, LLC. Lastly, a panel consisting of FinCEN, the FDIC and Banco Popular North America officials lead a healthy discussion of what is being done to address the problem of closing bank accounts of money transmitters. President Joseph E. Rooney announced that MTRA will hold a 5-day examiners' school in the first quarter of 2009. The school's core objective is to provide examiners and analysts in-depth and comprehensive examination procedures and concepts for intrastate and interstate examinations of money transmitters. It will help many states which do not examine money transmitters develop examination programs. President Rooney thanked the MTRA Board of Directors and MTRA Administrator Susan Shermer for the organization of the conference. He also presented a commemorative plaque to Randall James, MTRA Vice President and Texas Banking Commissioner, who is retiring, and announced that Ms Stephanie Newberg, Deputy Commissioner, Texas Banking Department was appointed by the MTRA board to fill the remaining term of Mr. James. CSBS Chairman Timothy J. Karsky also presented a framed resolution from CSBS honoring Mr. James. Finally, President Rooney announced that the 2009 conference will be held at Stoweflake Resort & Conference Center, Stowe, VT - August 31-Sept 3, 2009. MTRA INTERMEDIATE EXAMINERS SCHOOL A BIG SUCCESS1 May 2008 - MTRA held a successful five-day intermediate examination school in Miami, Florida from April 21 - April 25, 2008. This five day, hands-on course was attended by 34 regulators from 17 states. The objective of the school was to offer the tools to become a proficient examiner, using MTRA joint examination procedures to evaluate money transmitters, and to provide networking opportunities with fellow state examiners. The school curriculum incorporated safety and soundness and compliance considerations in examining money transmitters, and the class used the MTRA rating system in simulated examinations. Students learned mining techniques using actual data to assure compliance with anti-money laundering laws and detect violations, and performed computer aided instruction and exercises. The school curriculum has been designed by the MTRA Education Committee. The school was taught by veteran State regulators: John Bishop, Senior Administrator, Ohio Division of Financial Institutions; Rollin Badal, Financial Examiner, Maryland Office of the Commissioner of Financial Regulation; Bert Gonzalez, Financial Examiner, Texas Department of Banking; and Tom McVey, Jr., Chief Examiner, West Virginia Division of Banking. Nick C. Kyrus, Deputy Commissioner of Financial Institutions in Virginia, and MTRA past president and current director attended, and commended the instructors for their hard work and dedication. Mr. Kyrus pledged MTRA's support of the professional development of examiners and announced that MTRA is planning a beginners school for early 2009. SIGUE OF CALIFORNIA SETTLES FOR AML DEFICIENCIES28 January 2008 - The Financial Crimes Enforcement Network (FinCEN) announced the assessment of a civil money penalty in the amount of $12 million against Sigue Corporation and Sigue, LLC, a money services business headquartered in San Fernando, California, for violations of the Bank Secrecy Act (BSA). Sigue, without admitting or denying the allegations, consented to the civil money penalty. Concurrently, the Department of Justice announced today that Sigue has also entered into a deferred prosecution agreement on charges of failing to maintain an effective anti-money laundering program and will forfeit $15 million to the U.S. government. FinCEN's penalty will be deemed satisfied by a portion of the $15 million payment to the Department of Justice. Sigue has more than 7,000 agent businesses or "authorized delegates" located throughout the United States, providing money transmission services from the United States to Mexico and Latin America. The authorized delegates, which are typically small businesses and Sigue each, earn a small fee for the transactions conducted through these agents. FinCEN determined that Sigue failed to establish and implement an anti-money laundering program reasonably designed to ensure compliance with the Bank Secrecy Act which led, in turn, to a failure by management at Sigue to implement measures to respond to continued patterns of suspicious activity, with repeated common characteristics, at certain agent locations. Specifically, on multiple occasions over an extended period of time, 47 agents assisted customers in the structuring of transactions represented to be drug trafficking proceeds to avoid the currency transaction reporting requirements of the Bank Secrecy Act. Sigue's failure to implement effective internal controls, training or independent testing to manage the risk of money laundering was serious, longstanding and systemic. "Today's enforcement action reinforces our message on the importance of compliance by all the diverse sizes and types of financial institutions subject to the Bank Secrecy Act," said James H. Freis, Jr., Director of the Financial Crimes Enforcement Network. "Principals of money services businesses must exercise effective oversight and control over the authorization, transactional activity and operations of their agents to ensure compliance with the BSA and prevent money |