December 30 2015
The Financial Crimes Enforcement Network (FinCEN) today announced the assessment of a $200,000 civil money penalty against a Los Angeles precious metals business, as well as its owner and compliance officer. B.A.K. Precious Metals, Inc. (B.A.K.), its sole owner, Bogos Karaoglanyan, and its designated compliance officer, Arman Karaoglanyan, have admitted to willfully violating federal anti-money laundering (AML) laws, known collectively as the Bank Secrecy Act (BSA). This is FinCEN’s first action against a dealer in precious metals, precious stones, or jewels.
B.A.K. failed to adequately assess its risks and did not conduct due diligence on its highest risk customers. In 2011, B.A.K. began dealing in large sums of gold with new customers, with transactions ranging between $14 and $23 million. This helped B.A.K. nearly double its total yearly volume, which reached $120 million by the end of 2012. Despite this significant change in volume and customer base, B.A.K. chose not to require any documentation or identification prior to conducting business with many of these new, high-volume customers.
In addition to the fine, B.A.K., Bogos Karaoglanyan, and Arman Karaoglanyan also agreed to several undertakings to extend through 2020, including retaining an external auditor, providing a comprehensive annual report to FinCEN outlining the implementation of its improved AML program, and annually providing a copy of, and certifying attendance and testing results of, B.A.K.’s AML training program.