SALT LAKE CITY — Zions First National Bank has agreed to pay $8 million to settle allegations it failed to monitor billions of dollars of illegal wire transfers.
The Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network worked together in an investigation that uncovered 132 cases of suspicious activity worth $12.3 billion over the course of more than two years.
"These violations occurred in 2006 and 2007, when the bank opened a new wire transfer business but failed to meet anti-money-laundering regulations," said Kevin M. Mukri, a spokesman for the Office of the Comptroller, in an interview with the Associated Press on Monday.
The Salt Lake City-based bank, which has offices in 10 Western U.S. states, has not acknowledged or denied the allegations. It closed its foreign correspondent banking business in 2008 and agreed to pay an $8 million to settle the allegations.
"We take very seriously our obligations to comply with federal laws and regulations," President and CEO Scott Anderson said in a statement. "We regret the circumstances that led to the regulatory actions relating to our discontinued foreign correspondent banking business."
Anderson said the bank, a subsidiary of Zions Bancorp, has since increased its resources to better detect and report suspicious activities.
The Office of the Comptroller said Zions Bank developed a product that enabled customers to deposit images of items electronically from remote locations and marketed the product to high-risk customers in 2006 and 2007. Regulators said the product facilitated illegal transactions and violated the Bank Secrecy Act and the USA Patriot Act.
After shutting down the operation in 2008, Zions conducted a voluntary review and reported suspicious activity, the Office of the Comptroller said.
In assessing Zions' civil penalty, the Financial Crimes Enforcement Network said the bank facilitated "sequentially numbered travelers checks, possible black market peso exchange, transactions involving entities and accounts alleged to have been involved in drug trafficking activities and unusual wire transfers."
Federal agencies said the penalty should also be a warning to other banks to maintain effective anti-money-laundering programs.
"With these actions, we are sending another strong message that banks need to be vigilant and ensure that they have effective anti-money-laundering programs in place," said John Walsh, acting comptroller of the currency, in a statement.
Comments