A former MoneyGram compliance head will pay a $250,000 fine and be barred from performing a compliance function for a money transmitter for the next three years after agreeing to a settlement over alleged AML and fraud prevention failures that took place at the company under his watch. Thomas Haider, who served as MoneyGram’s chief compliance officer from 2003 to 2008, reached the deal with FinCEN and the U.S. Attorney’s Office for the Southern District of New York, over claims he violated the Bank Secrecy Act.
Under terms of the settlement, Haider admits and accepts responsibility for several violations, including: failing to terminate specific MoneyGram agent locations despite strong evidence those outlets were complicit in consumer fraud schemes; failing to implement a policy for terminating outlets that posed a high risk of fraud; and structuring the company’s AML program such that information about potential fraud held by MoneyGram’s fraud department (which was headed by Haider) often was not shared with staff responsible for filing suspicious activity reports with FinCEN.
FinCEN initially issued a $1 million civil penalty against Haider in December 2014, in connection with an investigation into complaints from consumers who used MoneyGram’s wire transfer service to send funds to third-party fraudsters running various scams. The U.S. Attorney’s Office subsequently filed a complaint in U.S. District Court in Minnesota that sought to enforce the penalty and to restrict Haider from employment in the financial industry. In early 2016, the court denied a request by Haider to dismiss the complaint under the argument that an individual could not be held personally responsible for those types of compliance failures.
While the final settlement amount of $250,000 was significantly lower than the initial $1 million penalty, it’s still one of the largest fines ever imposed by FinCEN on an individual, an agency spokesperson told Reuters.
The fine could pave the way for more regulators to take aim at individual executives over AML and other corporate compliance failures. Holding Haider personally accountable “strengthens the compliance profession by demonstrating that behavior like this is not tolerated within the ranks of compliance professionals,” said acting FinCEN Director Jamal El-Hindi.
Acting U.S. Attorney Joon Kim said his office is “committed to working with FinCEN to enforce the requirements of the Bank Secrecy Act and to hold individuals like Haider accountable.”
In 2015, then-Superintendent of the New York Department of Financial Services Benjamin Lawsky floated a plan to hold top bank executives personally responsible for accounting fraud, and encouraged other regulators to adopt similar measures in monitoring AML controls.