U.S. Bank National Association
Outcome
U.S. Bancorp entered a Deferred Prosecution Agreement and agreed to pay $613 million in February 2018 — including a $75 million OCC civil money penalty and $528 million in DOJ forfeiture and penalties — for systemic BSA/AML failures from 2011–2014 including deliberately capping transaction monitoring alerts to avoid investigating and reporting suspicious activity, allowing a large money transmitter to conduct millions in risky currency transfers without monitoring, and filing over 5,000 incomplete CTRs.
Details
U.S. Bank National Association — $613 Million BSA/AML Deferred Prosecution: Alert Capping Scheme (2018)
Outcome: U.S. Bancorp and its subsidiary U.S. Bank National Association entered a Deferred Prosecution Agreement with the DOJ in February 2018 and agreed to pay $613 million in combined penalties for systemic BSA/AML failures from 2011 through 2014 — including deliberately capping transaction monitoring alerts to avoid investigating thousands of suspicious transactions, allowing an unmonitored money transmitter to process millions in risky currency transfers, and filing over 5,000 incomplete Currency Transaction Reports.
U.S. Bank National Association, headquartered in Cincinnati, Ohio and operating as the fifth-largest U.S. bank, maintained an AML program that had material deficiencies identified by the OCC in a 2015 consent order. The OCC found that despite being under a consent order, U.S. Bank continued to devote inadequate resources to its AML program through 2018.
The most significant and deliberate violation was the bank's practice of "alert capping" — placing artificial limits on the number of transaction monitoring alerts that the system could generate. Internal testing by U.S. Bank itself demonstrated that this alert capping caused the bank to fail to investigate and report thousands of suspicious transactions. When confronted with this evidence, the bank's response was not to remove the caps and investigate the missed activity — it was to terminate the internal testing that was revealing the problem. This active suppression of evidence of BSA violations represented a particularly serious form of willful noncompliance.
The bank also allowed, and failed to monitor, non-customers conducting millions of dollars in currency transfers at its branches through a large money transmitter — a high-risk customer category that should have received enhanced monitoring. Additionally, the bank filed over 5,000 CTRs with incomplete or inaccurate information, directly impeding law enforcement's ability to identify and track potentially unlawful financial activity.
The $613 million combined resolution included a $75 million OCC civil money penalty for noncompliance with the 2015 consent order, a FinCEN civil money penalty, and DOJ forfeiture/penalties totaling the balance. FinCEN also separately penalized U.S. Bank's Chief Operational Risk Officer, Michael LaFontaine, with a $450,000 individual civil money penalty for his role in the alert-capping failures — one of the few instances of FinCEN assessing a penalty against a senior bank executive for AML compliance failures.
Primary Source: OCC Press Release — $75 Million Civil Money Penalty Against U.S. Bank National Association
How Crucible Prevents This
Crucible's instinct-observer hook would detect the alert-capping pattern — where the number of generated SAR alerts was artificially constrained rather than reduced through legitimate compliance improvements. The quality-gate would block any transaction monitoring configuration change that reduced alert volume without a documented reduction in monitored transaction risk. The config-protection hook would prevent alert threshold settings from being changed without board-level approval documentation.
Don't let this happen to your organization. See how Crucible works.
See How Crucible Works