Capital One’s “wilful” AML failures land the bank a $290m penalty
Capital One Financial has landed itself a $290 million fine after it emerged the bank “wilfully” violated anti-money laundering (AML) requirements for six years.
Between 2008 and 2014, the major US bank committed “both wilful and negligent violations” in breach of the Bank Secrecy Act.
That’s according to Financial Crimes Enforcement Network (FinCEN), one of America’s Treasury Department bureaus.
Capital One has admitted to all the bureau’s claims. They say it “wilfully failed to file thousands of suspicious activity reports (SARs) and negligently failed to file “thousands” of Currency Transaction Reports (CTRs).
Capital One’s corporate headquarters in San Francisco
Check Cashing Group
These breaches were in relation to the bank’s Check Cashing Group, which became part of the bank after its 2006 purchase of New York-based North Fork Bank.
In all, the bank “admitted to negligently failing to file CTRs on approximately 50,000 reportable cash transactions”. These represented more than $16 billion in cash handled by this group.
According to FinCEN, the group consisted of 90-150 check cashers based out of New York and New Jersey. With banking services provided by Capital One, the group provided armoured vehicles to transport large amounts of money. It also processed checks deposited by customers.
“Capital One was aware of several compliance and money laundering risks associated with banking this particular group,” says FinCEN.
These included “warnings by regulators” and “criminal charges against some of the customers”. It also entailed “internal assessments” of the bank’s top 100 highest risk customers for money laundering.
By ignoring such illegal activities, the bank allowed “millions of dollars” to pass through its platforms on behalf of “organised crime, tax evasion, [and] fraud”.
American-Italian mafia links
Domenick Pucillo, who FinCEN calls “a convicted associate” of the American-Italian Mafia family, Genovese, was one of the group’s largest check cashers.
According to the bureau, Capital One was aware of Pucillo’s crime links “on several occasions”. One such warning arrived in early 2013. The bank was made aware of two potential criminal charges in two different jurisdictions.
“Despite this information, Capital One failed to timely file SARs on suspicious activity by Pucillo’s check cashing businesses,” says FinCEN.
The US bank then went on to process more than 20,000 transactions for Pucillo’s businesses, valued at around $160 million.
Last year, Pucillo finally met a sentence of ten years imprisonment. His jailing, which arrived five years after Check Cashing Group’s closure, was in part down to the money he laundered through his Capital One accounts.
“Egregious failures”
FinCEN’s director, Kenneth Blanco, calls Capital One’s AML violation “egregious failures” which “allowed known criminals to use and abuse our nation’s financial system unchecked”, “flourishing at the expense of victims and other citizens”.
“These kinds of failures by financial institutions, regardless of their size and believed influence, will not be tolerated,” Blanco concludes.
A Capital One spokesperson tells Reuters this was the last remaining government inquiry into a now-defunct business.
“The bank has invested heavily in the enhancement of its AML programme over the past several years under new AML leadership,” the spokesperson added.
The bank will only pay $190 million of the fine. It will be credited $100 million due to a fine it paid to the Office of the Comptroller of the Currency in 2018. This was on behalf of failures from the same check-cashing group.
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This does not surprise me at all — I worked at Capital One for 18 yrs – we were always having to take continuing education on AML / keeping up with cutting banking regulations – but then turning a blind eye – appearing to play the game – being above board – talking the talk – but not walking the walk — I could not stay & play their deceitful game any longer – I’m glad they finally got caught – shame they did not have to pay more.
just use the laundered money to pay the fine. money is money to govt.
Explains why i am being sued
Once again big banks doing what they will. Only a 190 million fine. What did they make off of 16 billion.???
Jesus I just had to read this story, cause I have a credit card with this bank. My fear now although I owe couple hundred dollars. I just sure hope this bank doesn’t go over charging interest on me n others to make up for that loss of millions of dollars in fines. I am kinda shocked over this situation. I’d never thought such a bank would be purposefully so
negligentt. I just hope this negligence doesn’t fall on the hands of us clients. This is an embarrassment, I’m feeling very uneasy over this type of news.
This would explain why my name was used for a silver credit card and they claimed they could not talk about it to me. Because it was being looked into. I don’t own a silver credit card at all. And they never reached back out to me.
I was with CAPTAL one for two years I made a altomated payment to them in December 2020 when I payed that I was waiting to pay my next payment only to be told that my first payment was not received I also had the code number from the altomated and proof on my bank statement that it was paid I was on a plan with them so couldn’t pay my next payment absolutely disgraceful I now pay a token to them through my bank never trust these again I argued my case with them but did not get the truth whot happend to my money
Wow! My daughter has a first car loan through this bank and the other has a nerve to put his name on her loan with her consent. And now the other person 80 day pass due. We are trying to pick up the vehicle but the capital one cant do anything about..Its been 11months dealing with situations.
I asked for a late fee removal i paid my payment on the date due but I was told it was past the cut off time eastern time I was denied the credit they fo nothing for their loyal consumer clients
Cap1 Continue to exercise many predatory and financial schemes thru their ACH payment processing and their fees being pass to consumers @ their highest amount
possible. Cap 1 underserved the middle and lower classes and preserve the finances of the most obscure characters along with deceiving financial practices. They should be restructured and regulated with the largest microscope. The next financial banking scheme its coming from their business characters and practices. Cap 1 hurt taxpayers and Americans in whole. They take from the hard working class to fullfilled their bonuses and gift themselves and others that hold the door wide open for them. Exposure is the only way we will know and shame among their business and financial leaders is the start. We’ll see.
Nothing surprises me. Capital One is the most atrocious bank I know. While looking to make extra funds the past few months, I first was going to have a weap put on my vehicle from fritos lay for played advertisement. Took the checks I was sent to fritos lay and did not try to deposit them. But instead had their teller at the bank look at them to see if they looked right. She said they were fake, so I did not try to deposit them, but called and reported it to fritos lay. A month later, a reputable drink company offered same deal to me. When their payment to me, which I received by fed ex arrived I took to the bank and had same teller look at them. She said they were fine and deposited them into my account. With a standard hold on them until they cleared. They said I could draw 300 in 2 days, then remaining balance in 2 more days. I told her I would not touch them until they cleared. Next thing I know they are closing my bank account without telling me anything, account which I had my social security direct deposit going to every month. Because they didnt tell me, i had to wait a month on my benifits because my payment was sent back to the social security office. Capital one should pay me for my month long struggle financially for closing my account and not telling me anything. I will not bank with them again and tell everyone not to.
I love this credit card company!!!!
They may have compliance issues in a particular field, but they are awesome at protecting me.
My interest rates are high 29.99,it takes over half of my payment
Good to know. I will close my accounts ASAP.
Honestly Capital One has been good to me. I have been with them for 7 years I never had one issue. With all that being said I’m still not surprised that they broke the law period greed comes in all shapes and sizes they profited 3 times of what they was find they still winning ?
Ever notice when we do something illegal we go to jail. A company only gets a fine when they are involved in criminal activities. Slap on the wrist, and business as usual.
I bank with them and I don’t have a problem with them. This bank helped me when I was struggling – they weren’t so quick to sue me but worked with me when I got behind on my cc- now I am back on my feet and paid them off- thank you capital one. Bank Number 1 in my book.
I don’t no what they do butt even wen I pay my bill like they take forever to proceed I start with a 200 dollars secure cardand like less than a month he went up $23 and then it went up to another $25 I still payed my bill an just recently they closed my account
I took out a loan and when I had finished they offered me a top up loan then preceed to put the two loans together. Wouldn’t respond not even to my solicitor 17yrs later I am still being chased for money I don’t owe them
I have been battling them over a dispute. The company that filed a charge on my credit card has tried to refund the money back to the credit card, Capital One has continued to deny the refund many times. I know it sounds buzarre but it is true.
Inwas told by Capital One not to worry because “We’ve got your back.” I told them that might be true if they were holding a knife!
I have neverchad a company work so hard against a customer.
Have had a card with them for more than 10 years, they charge me a fee to have this card. Have previously asked for this fee to be dropped. Have VERY good credit rating. Have paid this card off numerous times, only thing they would offer me is a card with no fee but a rate of nearly 25%. Needless to say I will no longer do business with Capital One. What I have in my wallet,will not be Capital One!!
And they couldn’t give me a lousy $200 increase! I have a $300 limit and every month they get paid in full and they get the payment before it’s due. Cheap! Cheap! Cheap! Well the saying goes the rich get richer.
I have been with Capitalone for as long as I can remember. I LOVE THEM. They have texted me when a possible fraudulent purchase has been made and I have referred them to my friends and family. I do have a car loan with them and am surprised that they won’t give me a better rate. My credit score is over 800 and after all these years being an excellent customer you’d think they would be a little bit more passionate. That’s my only gripe. All in all I really love my card.
My card was overcharged and capital one told me they couldn’t do anything file a dispute i did that but capital one said it was my fault which it wasn’t im still paying this large bill so stressful
If this is willful, why is no one going to jail