Home > Uncategorized > TD Bank Assessed $37.5 M For Violations of Bank Secrecy Act

TD Bank Assessed $37.5 M For Violations of Bank Secrecy Act

Scott Rothstein is serving a 50-year prison sentence for running a $1.2 billion scheme from Fort Lauderdale-based Rothstein Rosenfeldt Adler PA.

He sold wealthy investors stakes in what he said were payouts in confidential sexual-harassment and workplace-bias cases. The cases were fabricated. Back in July his law firm his liquidation was confirmed in a Chapter 11 Bankruptcy case. See article http://www.bloomberg.com/news/2013-07-18/ponzi-schemer-rothstein-s-law-firm-liquidation-confirmed.html

 

TD Bank was the unfortunate Bank where Scott Rothstein ran the money through his operation.  Suffice it to say, TD Bank is paying for not catching its mistakes beginning in 2008.

The Bank ultimately provided more than $600 million in restitution to investors impacted by Rothstein’s Ponzi scheme.  

Yesterday, the OCC announced a hefty penalty assessed against TD Bank for its failures which constitute violations of the Bank Secrecy Act. You can check out the Consent Order entered into by TD Bank here: http://www.occ.gov/static/enforcement-actions/ea2013-142.pdf

 

According to the OCC’s website:

“The OCC found that from April 2008 to September 2009, the Bank failed to file suspicious activity reports (SARs) on activity in accounts belonging to Rothstein Rosenfeldt Adler, P.A., the Ft. Lauderdale, Florida law, firm through which Scott Rothstein ran a $1.2 billion Ponzi scheme.”

“These failures by the bank resulted in violations of the OCC’s SAR regulation (12 C.F.R. § 21.11(c) and (d)), which requires banks to file SARs in 30 to 60 days, depending on the circumstances.”

 

Further, “[t]he failures to file SARs were significant and egregious for a number of reasons, including the number of alerts generated by these accounts and the volume and velocity of funds that flowed through them.

 The $37,500,000 civil money penalty reflects a number of factors, including:

  • the scope and duration of the violations and
  • the financial harm that resulted to the Bank.

The penalty will be paid to the U.S. Treasury.

The OCC is coordinating its action with the Financial Crimes Enforcement Network (FinCEN) and the Securities and Exchange Commission (SEC). FinCEN is ordering the Bank to pay a $37,500,000 penalty. The SEC is ordering the bank to pay an additional $15,000,000 penalty and to cease and desist from violating sections 17(a)(2) and (3) of the Securities Act of 1933.

 

 

 

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