FinCEN Imposes Civil Money Penalty Against Owner of Kentucky-Based Money Services Business

Anti-Money Laundering FinCEN Bank Secrecy Act

On March 24, FinCEN assessed a civil money penalty against a Kentucky-based MSB and its owner for violations of the Bank Secrecy Act (BSA). As the designated AML compliance officer of the MSB, the owner willfully violated the BSA’s AML program and reporting requirements by failing to ensure that the MSB complied with obligations under the BSA and its implementing regulations. In 2009, after an IRS Small Business/Self-Employed Division (IRS SB/SE) examination of the MSB’s activities, FinCEN issued a warning letter advising the company to take corrective actions. A subsequent 2013 IRS SB/SE examination found continued violations. Specifically, the MSB failed to (i) establish and implement an effective AML program by “failing to implement policies, procedures, and internal controls reasonably designed to assure ongoing compliance, failing to designate an adequate compliance officer, failing to provide adequate training, and failing to conduct independent testing of its compliance program”; and (ii) file accurate and timely currency transaction reports. The MSB’s owner admitted to violating the BSA’s AML program and reporting requirements and agreed to a $10,000 civil money penalty.