FinCEN Fines Michigan Money Services Business and Its Owner/Compliance Officer for Ignoring Anti-Money Laundering Responsibilities
The U.S. Treasury Department's anti-money laundering unit has fined a defunct Michigan wire transfer firm and its owner $12,000 because the business sent millions of dollars to Yemen on behalf of customers it knew nothing about and it failed to report suspicious transactions, the department announced Monday. Treasury also barred the owner from operating any financial institution.
King Mail & Wireless Inc, which was based in Hamtramck, Michigan, engaged in money transfers between 2009 and August 2011. It and a sister company, Al Malik Wireless, Inc, which also had compliance problems, were owned by Ali Al Duais, Treasury's Financial Crimes Enforcement Network (FinCEN) said when announcing the fine. Both companies are now closed.
FinCEN said King Mail and Al Duais admitted to the conduct and agreed to pay the $12,000 penalty and that as part of the settlement he would no longer be permitted to "conduct the affairs" of any financial institution in the United States. Thomson Reuters was unable to reach Al Duais for comment.
In 2012, the Internal Revenue Service examined King Mail for compliance with the Bank Secrecy Act (BSA), the U.S. anti-money laundering law, and found that it "willfully violated the program, reporting, and recordkeeping requirements of the BSA and its implementing regulations," FinCEN said in its penalty assessment.
King Mail failed to implement a written anti-money laundering program and therefore had no policies, procedures, and internal controls to monitor, detect and report suspicious activities or obtain and retain identification information for fund transfers over $3,000, FinCEN said.
The business completed more than 2,600 transactions to Yemen totaling $2.7 million but ignored "red flags, FinCEN said. It added that the business failed to react to: dollar amounts inconsistent with family support; large amounts sent within a short period of time; large dollar amounts that had no apparent business or lawful purpose; transactions sent to multiple beneficiaries in different locations; and multiple transfers on single business days below the recordkeeping threshold.
The IRS examiners found that King Mail did not file any Currency Transaction Reports (CTRs) or Suspicious Activity Reports (SARs), including in 23 instances where there were "significant patterns of potentially suspicious transactions," FinCEN said.
News Release: http://www.fincen.gov/news_room/nr/pdf/20150601.pdf
Enforcement Action: http://fincen.gov/news_room/ea/files/20150601Assessment.pdf