Money laundering is in the headlines after the FSA fined the Bank of Ireland £375,000 for failing to implement anti-laundering protocols.
The failures enabled cash transactions totalling £2m to proceed through the bank’s systems over a period of four years.
These transactions are currently being investigated by police because of “suspicions”, the FSA says.
The size of the fine reflects failures by the bank to monitor the transactions, and ensure staff had sufficient training to understand their responsibilities under money laundering rules.
In this particular case, a single customer was able to buy 40 bank drafts for cash, payable to the Bank of Ireland, which effectively hid the identity of the owner of the cash.
Additionally, the cash was passed straight into a branch internal account, but not through the customer’s own account. Thus the customer was able to use the internal account effectively as a deposit account without necessary checks being made either of the customer’s identity or the source of the money.
The customer had also asked staff not to use his name on any formal correspondence relating to the draft transactions or facilities. This they did, in direct contravention of anti-laundering rules.
The case was only discovered after a branch audit in early 2003, at which point the bank called in the FSA and police to investigate.IFAonline
Partner Insight Video: Advisers have had to adapt to the changing investment landscape.
Investment trust savings scheme