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| DC Bank May Be Fined More Than $25 Million |
| 2004-04-28 |
| ...for money laundering and numerous irregularities in Saudi and other embassy accounting. The Allbritton family owns Riggs as well as the ABC-TV affiliate here in town. Federal bank regulators are preparing to impose on Riggs Bank what could be the largest civil penalty ever against a financial institution for violations of anti-money-laundering laws, sources familiar with the discussions between Riggs and government officials said yesterday. The fines being contemplated by regulators could top $25 million, the sources said. The penalty will be imposed for what the bank acknowledges have been years-long deficiencies in complying with the Bank Secrecy Act, which requires financial institutions to report suspicious activities to federal authorities. In imposing fines, the Office of the Comptroller of the Currency, Riggs’s main federal banking regulator, and the Financial Crimes Enforcement Network, a law enforcement unit of Treasury, will cite the bank and its holding company for deficiencies in risk management and internal controls, sources said. The Federal Reserve Board, which regulates bank holding companies as well as a Riggs unit that engages in foreign transactions, will also cite the company for similar deficiencies, sources said. The penalties and management changes would come as the FBI, bank regulators and three congressional committees continue to delve into Riggs’s international banking relationships, particularly its two-decade role as chief banker for the Embassy of Saudi Arabia in Washington. That relationship, as well as other multimillion-dollar embassy accounts, ended in recent weeks as a result of the ongoing probe. Riggs says it terminated the relationship. The Saudis say they ended it. Either way, friction stems from a review by investigators of the Saudi accounts for evidence of money laundering. Investigators have reached no conclusions about the reasons for series of layered transactions over several years in the embassy accounts, including the personal accounts of the Saudi ambassador, Prince Bandar bin Sultan, sources say. Riggs is also being subpoenaed by lawyers representing the victims of the 9/11 terror attacks. |
| Posted by:Seafarious |