In 2018 the US Financial Crimes Enforcement Network penalised US Bank for failing to obey the Bank Secrecy Act 1970. Now Michael LaFontaine, the former chief operational risk officer (and, before that, chief compliance officer) at the bank, has to pay.

The first charge that FinCEN levels against LaFontaine in its assessment of a civil monetary penalty is its assertion (to which he admits) that he "failed to take sufficient steps to ensure that the bank’s compliance division was appropriately staffed to meet regulatory expectations."

Between 2005 and the time he left the bank in 2014, LaFontaine held senior positions in the bank’s anti-money-laundering (AML) hierarchy. He was CCO of the bank in 2005-10, deputy risk officer in 2010-12 and chief operational risk officer thereafter. He began overseeing the bank’s AML compliance functions in 2008. In his last job, he oversaw the bank’s AML compliance department (called Corporate AML) and he supervised the bank’s CCO (to whom its AMLO reported).

As mentioned before, during LaFontaine’s tenure, the bank improperly capped the number of alerts generated by its automated transaction monitoring system. It also failed to include Western Union money transfers in the automated transaction monitoring system and did not spot and deal with highly risky customers well. The bank's formal offence, according to the regulator, was to break 31 USC § 5318(h) by failing to maintain an adequate AML programme.

In February 2010, FinCEN and the Office of the Comptroller of the Currency (OCC) took public action against Wachovia Bank (being absorbed by Wells Fargo after a government-led takeover) for similar transgressions. Wachovia’s monitoring system was tuned so as to generate about 300 alerts each month with respect to international correspondent banks. FinCEN thinks that LaFontaine should have drawn a lesson from this.

Details of FinCEN's disciplinary action against the bank two years ago can be found here.