DFS fines Mega Bank $180 million for voilating anti-money laundering laws

886

August 19, 2016

Financial Services Superintendent Maria T. Vullo today announced that Mega International Commercial Bank of Taiwan will pay a $180 million penalty and install an independent monitor for violating New York’s anti-money laundering laws.  The fine is part of a consent order entered into with the Department of Financial Services (DFS) pursuant to which Mega Bank shall take immediate steps to correct violations, including engaging an independent monitor to address serious deficiencies within the bank’s compliance program and implement effective anti-money laundering controls.  Mega Bank is a major international financial institution with approximately $103 billion in assets, including $9 billion at its New York branch.

Violations of anti-money laundering requirements at Mega Bank were uncovered in a recent DFS examination, which found that the bank’s head office was indifferent toward risks associated with transactions involving Panama, recognized as a high-risk jurisdiction for money-laundering. Mega Bank has a branch in Panama City and another in Panama’s Colon Free Trade Zone.  DFS’s investigation identified a number of suspicious transactions running between Mega Bank’s New York and Panama Branches.  The investigation also determined that a substantial number of customer entities, which have or had accounts at several other Mega Bank branches, were apparently formed with the assistance of the Mossack Fonseca law firm in Panama.  Mossack Fonseca is one of the law firms at the center of the formation of shell company activity, possibly designed to skirt banking and tax laws worldwide, including U.S. laws designed to fight money laundering.