CommunityBank of Texas, National Association
Outcome
FinCEN assessed an $8 million civil money penalty and OCC assessed a $1 million civil money penalty against CommunityBank of Texas for willful BSA/AML program failures and failure to report hundreds of suspicious transactions involving illegal financial activity.
Details
CommunityBank of Texas, N.A. — BSA/AML Program Failure and Suspicious Activity Reporting Failures (2015–2019)
Outcome: FinCEN and OCC assessed a combined $9 million in civil money penalties for willful BSA/AML failures including failure to report hundreds of suspicious transactions connected to tax evasion, illegal gambling, and money laundering.
CommunityBank of Texas, National Association (CBOT), headquartered in Beaumont, Texas, admitted that from at least 2015 through 2019 it willfully failed to implement and maintain an effective anti-money laundering program reasonably designed to guard against money laundering. The bank acknowledged it did not have adequate internal controls, and that these failures enabled suspicious transactions involving illegal financial activity to flow through the bank undetected and unreported.
The most serious finding was CBOT's admission that it willfully failed to report hundreds of suspicious transactions to FinCEN, even after the bank became aware that certain customers were the subjects of active criminal investigations. The unreported suspicious activity included transactions connected to tax evasion, illegal gambling, and money laundering. FinCEN found that CBOT's failures caused millions of dollars in suspicious activity to go unreported to FinCEN in a timely and accurate manner.
The Office of the Comptroller of the Currency (OCC) conducted its own parallel investigation and assessed a $1 million civil money penalty for related BSA violations, specifically finding that the bank failed to adopt and implement a BSA/AML system of internal controls sufficient to timely file complete Suspicious Activity Reports for approximately $100 million in suspicious activity. The FinCEN action was coordinated with the OCC enforcement to avoid double-counting of penalties.
FinCEN assessed the $8 million civil money penalty under 31 U.S.C. § 5321 for willful violations of the Bank Secrecy Act's requirements for financial institutions to maintain adequate AML programs and file timely and accurate Suspicious Activity Reports. The willful standard requires more than negligence — FinCEN found that CBOT's leadership knew of the deficiencies and failed to correct them.
Primary Source: FinCEN Announces $8 Million Civil Money Penalty against CommunityBank of Texas
How Crucible Prevents This
Automated SAR workflow tracking with deadlines and escalation paths would have flagged the hundreds of unreported suspicious transactions. A BSA/AML program audit checklist enforced at regular intervals would have identified the absence of adequate internal controls years before the violation period ended. Documentation controls requiring sign-off on customer criminal investigation referrals would have prevented the failure to file SARs even after the bank knew customers were under criminal investigation.
Don't let this happen to your organization. See how Crucible works.
See How Crucible Works