| Daniel Stipano, deputy chief counsel at the Office of the Comptroller of the Currency (OCC), told Congress June 2 that mistakes were made in the agency’s oversight of Riggs Bank’s compliance with the Bank Secrecy Act (BSA). However, he stressed that the case is not emblematic of overall OCC action in the anti-money laundering arena. Washington D.C.-based Riggs Bank was fined $25 million last month for failing to report suspicious transactions made by its customer, the Embassy of Saudi Arabia. Stipano told the House Financial Services Subcommittee on Oversight and Investigations that “with hindsight it turns out that decisions we made were not the correct ones” in the Riggs case. “It is clear that the supervisory actions that we previously took against the bank were not sufficient to achieve satisfactory and timely compliance with the BSA, that more probing inquiry should have been made into the bank’s high risk accounts, and that stronger, more forceful enforcement action should have been taken sooner,” Stipano said. He noted that the OCC “trusted management too much to get the problems fixed.” He told members that while efforts were made at Riggs to fix problems, “the effort took a long time and it took longer than it should have…we were willing to give management too much slack.” Stipano noted that Riggs had been cited for deficiencies in its BSA compliance program as far back as 1997, but he added that the deficiencies were “ somewhat technical in nature” and wouldn’t normally have required formal enforcement actions. In January 2003, however, the OCC conducted an extensive examination of Riggs’ Saudi accounts, which “discovered all sorts of problems,” Stipano said. This information was shared with the Federal Bureau of Investigation (FBI), and the case was referred to the Financial Crimes Enforcement Network (FinCEN). |
