Saddle River Valley Bank, a community bank in New Jersey, will pay $8.2 million to settle claims that it violated anti-money-laundering laws by processing $1.5 billion in suspicious transactions, U.S. authorities said.
The two-branch bank, which closed last year, failed to properly monitor transactions for three currency exchange businesses in Mexico and one in the Dominican Republican from 2009 to 2011, U.S. Attorney Paul Fishman said today in a statement. The U.S. has warned that such businesses, known as casas de cambio, often launder the proceeds of narcotics sales.
SRVB willfully violated the Bank Secrecy Act, which requires adequate steps to prevent money laundering, according to the Treasury Department’s Financial Crimes Enforcement Network. The $8.2 million penalty represents most of the bank’s assets, which are valued at $9.2 million, according to Fishman.
“It’s pretty remarkable that a small community bank in suburban New Jersey was attracting more than a billion dollars in transactions with customers in Mexico and the Dominican Republic, and nobody thought it was too good to be true,” Jennifer Shasky Calvery, FinCEN’s director, said in a statement.
The bank failed to monitor transactions properly, file timely suspicious-activity reports, conduct sufficient due diligence on the casas de cambio, employ an experienced Bank Secrecy Act officer, adequately train workers or hire independent testers of its anti-money laundering program, according to Fishman.
The case was investigated by Fishman’s office, FinCEN and the Office of the Comptroller of the Currency. The settlement agreement was signed by SRVB President Ralph Valvano.
Center Bancorp Inc. (CNBC), based in Union, New Jersey, bought the bank in August 2012 by assuming $85.6 million in deposits and $87.2 million in loans and securities, according to a bank statement at the time. Center Bancorp spokeswoman France Delle Donne had no immediate comment on the settlement.
Financier J. Christopher Flowers won approval from the U.S. Office of Thrift Supervision in October 2010 to buy SRVB in a rare bank takeover by a private-equity fund manager.
The case is U.S. v. $4,100,000 in U.S. Currency, U.S. District Court, District of New Jersey.
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