Kingdom Trust fined $1.5m for lax controls in first enforcement action of its kind by FinCen

South Dakota-based Kingdom Trust Company agreed to a $1.5 million civil penalty for lax controls and ‘willful violations’ of the Bank Secrecy Act (‘BSA’), in the first enforcement of its kind by the US Treasury Department’s Financial Crimes Enforcement Network (‘FinCEN’).

‘Kingdom Trust had virtually no process to identify and report suspicious transactions, resulting in it processing over $4 billion in international wires with essentially no controls,’ FinCEN’s Acting Director Himamauli Das said, 26 April.

‘This enforcement action is an important statement that we will not tolerate trust companies with weak compliance programs that fail to identify and report suspicious activities, particularly with respect to high-risk customers whose businesses pose an elevated risk of money laundering,’ he warned.

FinCEN said this is its first enforcement action against a trust company.

It added: ‘Kingdom Trust admits that it willfully failed to accurately and timely report hundreds of transactions to FinCEN involving suspicious activity by its customers, including transactions with connections to a trade-based money laundering scheme and multiple securities fraud schemes that were the subject of both criminal and civil actions. These failures stemmed from Kingdom Trust’s severely underdeveloped process for identifying and reporting suspicious activity.’