The Financial Crimes Enforcement Network, a division of the Treasury Department, has assessed a $1 million civil penalty against MoneyGram International's former chief compliance officer.
Fincen assessed the penalty on Thomas E. Haider for allegedly failing to make sure the company complied with anti-money laundering aspects of the Bank Secrecy Act between 2003 and 2008.
A call to an office number apparently belonging to Haider went unanswered yesterday evening.
The large fine for an individual comes at a time when financial institutions have been "derisking," or dropping relationships with broad categories of clients, because of mounting compliance costs and potentially stiff penalties should they make mistakes.
According to the Treasury Department, thousands of MoneyGram customers were defrauded out of millions of dollars some of it laundered through MoneyGram's network during Haider's tenure.
"The often elderly victims were solicited through the mail, e-mail, and telephone, and told, among other things, that they had won a lottery, had been hired for a 'secret shoppers' program, had been approved for a guaranteed loan, or had been selected to receive an expensive item or cash prize," a Dec. 18 press release from the department says.
In a prepared statement, MoneyGram said that Haider "has not been an employee of MoneyGram since May 2008. Since that time, MoneyGram's management, organizational structure, and programs have changed significantly. It is MoneyGram's policy not to comment on ongoing litigation."
Fincen also claims that Haider failed to bring attention to suspicious activities by "agents whom he knew or had reason to suspect were engaged in fraud, money laundering, or other criminal activity," and that he "denied critical information to law enforcement which could have been used to combat the fraud and dismantle the criminal networks."
In the press release announcing the penalty, Fincen Director Jennifer Shasky Calvery called Haider's alleged actions "an affront to his peers and to his profession."
The U.S. Attorney's Office for the Southern District of New York filed a complaint Thursday in U.S. District Court to enforce Fincen's penalty and bar Haider from employment in the financial services industry.
MoneyGram settled a fraud compliance case with the Department of Justice and U.S. Attorney's Office for the Middle District of Pennsylvania in 2012, agreeing to set aside $100 million for victims of consumer fraud scams that took place largely during Haider's tenure as compliance officer. According to the Justice Department, a major phishing scam exploited tens of thousands of MoneyGram's customers.