Alert April 06, 2010

Pamrapo Savings Bank Assessed $5 Million Fine for Bank Secrecy Act Violations

Pamrapo Savings Bank, SLA (the “Bank”) of Bayonne, New Jersey, consented to the assessment of a $5 million civil money penalty by the OTS for violations of the Bank Secrecy Act (the “BSA”).  The Bank also pleaded guilty in the U.S. District Court for the District of New Jersey to conspiracy to violate the BSA. 

As explained in a press release issued by the U.S. Department of Justice, the Bank, which had previously consented to a cease and desist order with the OTS in September 2008 based on anti-money laundering deficiencies, admitted that it willfully violated the BSA to avoid the costs of compliance with the law.  As a result of its ineffective compliance program, the Bank failed to file currency transaction reports (“CTRs”) and suspicious activity reports (“SARs”) related to approximately $35 million in illegal and suspicious financial transactions, including more than $5 million in structured currency transactions.  In discussing this new enforcement action, OTS Acting Director John E. Bowman cautioned that “[e]ven during an economic downturn, institutions must remain focused on complying with important laws and regulations to ensure that criminals do not use our nation’s financial system for their illicit enterprises.”

The $5 million civil money penalty assessed by the OTS will be satisfied through an asset forfeiture payment to the U.S. Justice Department.  FinCEN is also investigating the Bank’s BSA failures and may impose additional civil money penalties.