The Justice Department has put Wall Street on notice that it intends to introduce additional enforcement actions against banks that have not done enough to fight the flow of illicit funds into the United States’ financial system.
A top Justice Department official said that banks have stepped up efforts to guard against money laundering in the wake of several high-profile federal enforcement actions, but the United States is still finding problems as it investigates banks.
Banks have come under increasing pressure from regulators and law enforcement to bolster their anti-money-laundering efforts as part of a broad attempt to eradicate money laundering by going after the financial institutions they say enable such activity.
In 2012, HSBC Holdings PLC paid $1.9 billion after admitting violations of the Bank Secrecy Act and other laws. Regulators also reached a smaller settlement with Standard Chartered PLC and cited Citigroup Inc. and J.P. Morgan Chase & Co. for deficient money-laundering controls. Citigroup and J.P. Morgan said they are working to fix the issues. Last year, the Federal Reserve cited problems with the anti-money-laundering program at M&T Bank Corp., delaying a proposed merger.
The increased focus on banks is a shift for law enforcement, which traditionally added money-laundering charges when prosecuting alleged drug dealers or mobsters for other crimes. It also went after specific individuals or institutions that allegedly helped them launder money in specific instances.