CCO hit with quarter-million dollar fine in AML Compliance settlement


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FinCEN holds individual CCO accountable for AML Compliance failures

Thomas Haider, former chief compliance officer at Moneygram, won’t be on anyone’s AML Compliance payroll for the next three years—and his wallet is also a quarter-million dollars lighter. The terms of Haider’s settlement with FinCEN were announced yesterday.

In a case closely watched by the Compliance industry, FinCEN announced yesterday that Thomas Haider has agreed to a three-year injunction barring him from performing a compliance function for any money transmitter and has agreed to pay a $250,000 penalty.

Haider “also has admitted, acknowledged, and accepted responsibility for the following, among other things:  (1) failing to terminate specific MoneyGram outlets after being presented with information that strongly indicated that the outlets were complicit in consumer fraud schemes; (2) failing to implement a policy for terminating outlets that posed a high risk of fraud; and (3) structuring MoneyGram’s anti-money laundering (AML) program such that information that MoneyGram’s Fraud Department had aggregated about outlets, including the number of reports of consumer fraud that particular outlets had accumulated over specific time periods, was not generally provided to the MoneyGram analysts who were responsible for filing suspicious activity reports with FinCEN.”

From 2003 to 2008, Haider was the CCO for MoneyGram International Inc. and oversaw MoneyGram’s Fraud Department, which “collected thousands of complaints from consumers who were victims of fraudulent schemes,” according to FinCEN. Haider also headed MoneyGram’s AML Compliance Department. FinCEN initiated its suit against Haider in 2014.

Acting FinCEN director Jamal El-Hindi emphasized the critical importance of compliance professionals and their level of accountability in his statement on the matter.

“Compliance professionals occupy unique positions of trust in our financial system. When that trust is broken, it is important that we take action so that the reputations of thousands of talented compliance officers are not diminished by any one individual’s outlying egregious actions,” El-Hindi said. “We have repeatedly said that when we take an action against an individual, the record will clearly reflect the basis for that action. Here, despite being presented with various ways to address clearly illicit use of the financial institution, the individual failed to take required actions designed to guard the very system he was charged with protecting, undermining the purposes of the BSA. Holding him personally accountable strengthens the compliance profession by demonstrating that behavior like this is not tolerated within the ranks of compliance professionals.”

A Reuters report about this settlement references a statement made by Haider in which he describes how “proposals made by MoneyGram’s fraud department to terminate and discipline agents at its outlets had been shot down by the sales division. He also said that MoneyGram’s anti-money laundering, or AML, programs were audited by state regulators more than three dozen times,” according to Reuters.

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