FinCEN Penalizes Texas-Based Bank For AML Violations

The Financial Crimes Enforcement Network ("FinCEN") assessed a $2 million civil penalty against a Texas-based community bank in connection with anti-money laundering ("AML") related violations.

FinCEN determined that Lone Star National Bank ("Lone Star") failed to collect and analyze the information necessary to ascertain customer risk and develop individualized risk profiles. Such risk profiles are required to take into account the purpose of an account, the nature of a customer's business, the types of products and services a customer uses, geographic risk indicators, and other factors. Lone Star was found to have assigned improper risk ratings to several of its customers, resulting in a failure to identify high-risk activity. FinCEN determined that insufficient risk identification, coupled with an inadequate process to review and escalate AML alerts, "severely limited the effectiveness of Lone Star's AML program."