2024 witnessed several significant Anti-Money Laundering (AML) penalties imposed on financial institutions and businesses. These substantial fines underscore the growing importance of enhanced AML compliance programs and the severe consequences of regulatory non-compliance. This article highlights some of the largest AML fines imposed in 2024, analysing the underlying violations. By examining these cases, entities can get valuable lessons to enhance their own AML compliance efforts and minimise the risk of similar penalties.
TD Bank – $3 Billion
In October 2024, TD Bank faced staggering penalties totalling approximately $3.09 billion due to violations of the Bank Secrecy Act (BSA) and AML compliance requirements. This included the following fines:
- A $1.8 billion penalty from the U.S. Department of Justice (DOJ) as part of a plea agreement, marking the largest penalty ever imposed under the BSA.
- A $1.3 billion penalty assessed by the Financial Crimes Enforcement Network (FinCEN), setting a record for a depository institution in U.S. history.
- An additional $450 million civil money penalty from the Office of the Comptroller of the Currency (OCC) alongside a cease and desist order for compliance program deficiencies.
The bank failed to maintain an effective AML program, allowing suspicious activities to go undetected. Notable issues included instances of bribery and corruption, such as bank employees accepting bribes to facilitate money laundering through processing suspicious cash deposits and opening accounts for shell companies. TD Bank also failed to file thousands of Suspicious Activity Reports (SARs) on transactions totalling approximately $1.5 billion and delayed submitting Currency Transaction Reports (CTRs) for large cash transactions. These violations enabled criminals to launder over $670 million, including proceeds from drug trafficking.
City National Bank – $65 Million
In January 2024, City National Bank faced a $65 million fine imposed by the U.S. Office of the Comptroller of the Currency (OCC). This penalty stemmed from the bank’s failure to maintain effective risk management and internal controls, which OCC described as ‘unsafe or unsound practices’.
OCC identified systemic deficiencies across multiple areas, including operational risk management, compliance with the BSA, AML measures, fair lending practices, and investment management operations. Alongside the financial penalty, a cease and desist order required City National Bank to implement comprehensive corrective actions to address these deficiencies.
SkyCity Adelaide Pty Ltd – A$67 Million (Approximately $42 Million USD)
In June 2024, the Federal Court of Australia ordered SkyCity Adelaide Pty Ltd, a casino, to pay a A$67 million penalty for breaching the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act). This penalty followed AUSTRAC’s civil penalty proceedings, which revealed serious deficiencies in the casino’s AML/CTF programs and customer due diligence practices.
The court’s findings showed that these failures allowed high-risk customers to move millions of dollars through the casino without adequate scrutiny, raising significant concerns about potential money laundering activities.
Klarna Bank AB (Klarna) – SEK 500 Million (Approximately $45 Million USD)
In December 2024, the Swedish regulator Finansinspektionen (FI) imposed a SEK 500 million penalty on Klarna Bank AB for violating AML regulations. An investigation covering April 2021 to March 2022 highlighted serious deficiencies, including inadequate risk assessments and insufficient due diligence procedures, particularly for customers utilising its invoice product.
The investigation found that Klarna’s risk assessment failed to evaluate the potential use of its products and services for money laundering or terrorism financing adequately. Furthermore, the bank lacked comprehensive procedures and guidelines for implementing due diligence measures in all relevant customer situations.
Starling Bank – £28.9 Million (Approximately $36 Million USD)
In 2024, Starling Bank was fined £28.9 million by the Financial Conduct Authority (FCA) in the UK for significant failings in financial crime controls, particularly in its financial sanctions screening process.
The FCA’s 14-month investigation revealed that Starling opened over 54,000 accounts for high-risk customers, despite a requirement prohibiting such actions until improvements were made to its AML framework. Additionally, the investigation uncovered that Starling’s automated screening system only matched customers against a fraction of the financial sanctions list since 2017, exposing the bank to potential criminal activities and regulatory breaches.
Conclusion
The significant AML fines imposed in 2024 underscore the critical importance of enhanced compliance programs across all sectors. These penalties demonstrate regulators’ increasing focus on combating financial crime. By examining these cases, financial institutions and businesses can gain invaluable insights into the consequences of non-compliance and proactively strengthen their own AML frameworks to mitigate risks and safeguard against similar repercussions.
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