The Department of Financial Services of New York State, USA has imposed penalties of $8.25 million on MoneyGram International Inc. for Bank Secrecy Act (BSA) and AML violations. MoneyGram has entered into a Consent Order with the department, agreeing to pay the penalties. MoneyGram failed to adequately oversee the activity of 6 local agents in New York City who processed a large volume of suspicious transactions to China. This failure violates BSA/AML requirements as well as New York law.
MoneyGram failed to identify some obvious red flags in the activity of the concerned agents. The number of transactions between New York and China increased from 7,500 in 2014 to over 25,000 in 2016 and the first half of 2017. In the same period, the transaction volume increased from $30 million to over $100 million. These were signs of a high ML risk, especially given the destination’s risk profile. Other red flags included a suspicious pattern of transaction wherein multiple senders sent money to the same recipient.
DFS has acknowledged that once MoneyGram was notified of the suspicious activity, it ended its relationship with the agents involved. Further, it took remedial measures to improve its supervision of its agents. DFS has asked MoneyGram to report to it on the remedial changes it makes to its BSA/AML compliance policies, its customer due diligence requirements, and its Suspicious Activity Monitoring and Reporting program.
Source: Department of Financial Services, New York State, USA