FinCEN assessed a $2 million civil money penalty against Lone Star National Bank of Pharr, Texas in November 2017 for willfully violating the Bank Secrecy Act — including deficiencies in its foreign correspondent banking program under Section 312 — while already under an OCC consent order since 2012 for the same underlying BSA/AML deficiencies, representing five years of recurring compliance failures.

Lone Star National Bank — $2 Million FinCEN BSA Penalty, Repeat Violations (2017)

Outcome: FinCEN assessed a $2 million civil money penalty against Lone Star National Bank of Pharr, Texas in November 2017 for willful Bank Secrecy Act violations — including failure to maintain an adequate Section 312 due diligence program for foreign correspondent accounts — while the bank was already under an OCC consent order from 2012 requiring remediation of the same underlying BSA/AML deficiencies.

Lone Star National Bank, headquartered in Pharr, Texas and serving the Rio Grande Valley along the U.S.-Mexico border, had been under regulatory scrutiny for BSA/AML deficiencies since at least 2012, when the OCC issued a $1 million consent decree requiring the bank to remediate identified weaknesses in its AML program, foreign correspondent banking controls, internal audit, and suspicious activity reporting. Despite this prior enforcement action and the specific remediation requirements it imposed, Lone Star National Bank continued to violate the Bank Secrecy Act through at least 2017.

The FinCEN November 2017 enforcement action focused particularly on the bank's Section 312 due diligence program for foreign correspondent accounts. Section 312 of the USA PATRIOT Act requires U.S. financial institutions to implement enhanced due diligence procedures for foreign correspondent bank relationships — a requirement particularly relevant for a border-area Texas bank with significant Mexican banking relationships. FinCEN's assessment of $2 million for willful BSA violations reflected both the nature of the violations and the aggravating factor that the bank had already been on notice since 2012 that its BSA/AML program was deficient.

The 2015 OCC consent decree for $1 million (preceding the 2017 FinCEN action) had already identified the same categories of deficiencies: internal controls, independent audit, suspicious activity reporting, and foreign correspondent banking — reflecting five years of failure to achieve lasting compliance after the initial 2012 enforcement action.

Primary Source: FinCEN Press Release — FinCEN Penalizes Lone Star National Bank for BSA Violations