With FinCEN's recent enforcement action against Kingdom Trust Company for violations of the Bank Secrecy Act, it's clear that regulators are cracking down on companies with weak compliance programs.
Here are 6 takeaways from the recent $1.5 Million Civil Money Penalty against Kingdom Trust Company and how they apply to the Casino Industry.
The timeframe for these violations is 2016-2021. BSA violations made today could cost your casino well into the future.
Personnel with AML responsibilities acknowledged not fully understanding federal SAR filing requirements and may have missed important information about some of their riskiest clients.
Experience counts! Deficiencies in Kingdom Trust's SAR program were exacerbated by their failure to recruit sufficient personnel with experience in AML compliance.
Under-staffing and poor processes can create an environment where missed reporting is inevitable. "The manual nature of this process made it difficult to detect suspicious activity given the transactional volume."
Training matters! FinCEN found that SAR red-flag training provided to employees was not relevant for the types of transaction reviews their compliance staff were completing.
Compliance is everyone's job! Even though they had a policy that other departments were required to report potential SAR activity to Compliance: " personnel from other departments took little to no action to fulfill this requirement."
From the Consent Order:
"Kingdom Trust employees—including Compliance personnel—appear to have had very little awareness of, or appreciation for, how these red flags may apply to Kingdom Trust customers. This lack of awareness appears to be due to insufficient training, instruction, and an overall failure to build a culture of compliance.”
If you think compliance is expensive, try non-compliance
Vector Solutions’ AML training includes casino-specific SAR scenarios that are relevant to your employee’s daily duties and customer interactions. Our online training system is tailored to meet the specific needs of the casino industry, providing employees with the knowledge and skills they need to meet regulatory requirements and prevent money laundering.