On May 4, 2017, the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury and the U.S. Attorney’s Office for the Southern District of New York announced an agreement with former MoneyGram Chief Compliance Officer Thomas Haider to settle claims under the Bank Secrecy Act (“BSA”). FinCEN initially assessed a $1 million civil monetary penalty against Mr. Haider in December of 2014, which the U.S. Attorney for the South District of New York then sought to enforce in federal court. The case was transferred to the U.S. District Court for the District of Minnesota, where Mr. Haider settled the allegations for $250,000. Under the agreement, Mr. Haider will also be barred from similar jobs for three years. The settlement marks the end of a long running and closely watched money laundering case and, according to a FinCEN spokesman, is one of the largest fines ever imposed against an individual related to failures or omissions under BSA requirements for a financial institution. In November 2012, MoneyGram entered into a separate deferred prosecution agreement with the U.S. Department of Justice, in which it agreed to forfeit $100 million and retain an independent compliance monitor.
As outlined in the FinCEN press release, Mr. Haider admitted responsibility for: (1) failing to take action after being presented with information that certain MoneyGram outlets engaged in consumer fraud schemes, (2) failing to implement a policy to terminate outlets posing a high risk of fraud, and (3) overseeing the MoneyGram anti-money money laundering (“AML”) compliance program with alleged deficiencies that prevented appropriate filing of suspicious activity reports (“SARs”).
The case was particularly notable due to its focus on individual, rather than corporate, wrongdoing. Recent FinCEN actions against similar companies, such as Western Union, have not resulted in individual liability. According to a statement from Jamal El-Hindi, the Acting Director of FinCEN, “holding [Mr. Haider] personally accountable strengthens the compliance profession by demonstrating that behavior like this is not tolerated within the ranks of compliance professionals.” Mr. Haider asserted that the BSA did not provide for individual liability, but Judge David S. Doty of the U.S. District Court for the District of Minnesota rejected that argument and found the BSA permitted civil liability for corporate officers and employees responsible for designing and overseeing AML compliance programs.
Many commentators attributed this result to increased focus by the U.S. government on pursuing individuals for wrongdoing, as outlined in a September 2015 memo from former U.S. Deputy Attorney General Sally Yates. Although FinCEN has initiated cases against individuals since first fining Haider in 2014, there has not been a flood of such actions.