28-Jan-2008: Sigue Corp. and Sigue, LLC of California to Pay $15 Million to U.S. Government for Anti-Money Laundering Program Deficiencies

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The Financial Crimes Enforcement Network (FinCEN) announced the assessment of a civil money penalty in the amount of $12 million against Sigue Corporation and Sigue, LLC, a money services business headquartered in San Fernando, California, for violations of the Bank Secrecy Act (BSA). Sigue, without admitting or denying the allegations, consented to the civil money penalty. Concurrently, the Department of Justice announced today that Sigue has also entered into a deferred prosecution agreement on charges of failing to maintain an effective anti-money laundering program and will forfeit $15 million to the U.S. government. FinCEN’s penalty will be deemed satisfied by a portion of the $15 million payment to the Department of Justice.

Sigue has more than 7,000 agent businesses or “authorized delegates” located throughout the United States, providing money transmission services from the United States to Mexico and Latin America. The authorized delegates, which are typically small businesses, and Sigue each earn a small fee for the transactions conducted through these agents.

FinCEN determined that Sigue failed to establish and implement an anti-money laundering program reasonably designed to ensure compliance with the Bank Secrecy Act which led, in turn, to a failure by management at Sigue to implement measures to respond to continued patterns of suspicious activity, with repeated common characteristics, at certain agent locations. Specifically, on multiple occasions over an extended period of time, 47 agents assisted customers in the structuring of transactions represented to be drug trafficking proceeds to avoid the currency transaction reporting requirements of the Bank Secrecy Act. Sigue’s failure to implement effective internal controls, training or independent testing to manage the risk of money laundering was serious, longstanding and systemic.

Detailed news link: here

Assessment of Civil Money Penalty link: here