The OCC and FinCEN assessed concurrent $7 million civil money penalties against Pacific National Bank of Miami, Florida in March 2011 for BSA violations and failure to comply with a December 2005 OCC consent order — a single-location bank in a High Intensity Drug Trafficking Area and HIFCA that failed for five-plus years to monitor foreign correspondent accounts, conduct customer due diligence, or file timely and complete SARs despite ongoing regulatory orders.

Pacific National Bank — $7 Million OCC/FinCEN BSA Penalty: Five Years of HIDTA-Area Noncompliance (2011)

Outcome: The OCC and FinCEN assessed concurrent $7 million civil money penalties against Pacific National Bank — a single-location commercial bank in Miami, Florida located in both a High Intensity Drug Trafficking Area (HIDTA) and High Intensity Money Laundering Area (HIFCA) — in March 2011 for BSA violations and failure to comply with a December 2005 OCC consent order requiring AML program improvements, representing over five years of continued noncompliance in one of the nation's highest-risk banking locations.

Pacific National Bank was a full-service commercial bank with one location in Miami, Florida — a city recognized by federal law enforcement as both a HIDTA (High Intensity Drug Trafficking Area) and a HIFCA (High Intensity Money Laundering and Related Financial Crime Area). This geographic designation should have prompted the bank to maintain an elevated AML program appropriate for the heightened money laundering risk its location entailed. Instead, Pacific National Bank operated with systemic AML deficiencies for over five years.

The OCC had identified the deficiencies and issued a Consent Order in December 2005 requiring BSA compliance program enhancements. Rather than remediating the identified deficiencies, Pacific National Bank continued to fail across all key compliance dimensions through 2011: the bank inadequately identified, monitored, and reported suspicious activities; failed to adequately monitor foreign correspondent bank accounts that represented elevated risk; conducted insufficient customer due diligence; failed to audit high-risk areas and transactions adequately; and filed numerous SARs on a delayed or incomplete basis.

The combined OCC and FinCEN $7 million penalty — satisfied by a single $7 million payment to the U.S. Department of the Treasury — reflected both the severity and duration of the violations in a high-risk location, and the aggravating factor of continued noncompliance with a five-year-old OCC consent order.

Primary Source: OCC/FinCEN Press Release — Civil Money Penalties Against Pacific National Bank, Miami (March 2011)