Repeat AML Violations: The Fix That Didn’t Fix It

Repeat AML violations in bank settlements become clearest when a later order identifies the anti-money laundering control that was supposed to be fixed and explains how it kept failing. For someone who worked on the promised fix, the important comparison is between what management said would change and what the business continued doing.

Standard Chartered’s Monitoring Rules Failed Their Own Test

Standard Chartered’s repeat anti-money laundering resolutions connect deliberate concealment in payment messages with a later failure in the system meant to detect suspicious transactions. The New York Department of Financial Services’ September 2012 consent order described the bank removing or omitting identifiers from payments with Iranian connections.

That concealment mattered to the business of dollar clearing. Information about the underlying customer and payment helps explain whose money is moving through that relationship. Removing identifiers changes what the bank handling the payment can see.

In its August 2014 consent order, the New York Department of Financial Services described deficiencies exposed by the independent monitor. Monitoring scenarios did not match the rulebook, contained errors or were incomplete. Testing had failed too. The department imposed a $300 million civil penalty for this later control failure. A written detection rule and the rule running in production had become different things.

The bank had also entered a federal deferred prosecution agreement in December 2012. Under its April 2019 amended agreement in the criminal case, Standard Chartered admitted conduct involving employees helping Iran-connected customers route dollar transactions through U.S. institutions. The later resolution included transactions for front companies during 2007 through 2011.

For an insider, the revealing comparison is the promised monitoring coverage against the scenarios actually deployed and tested. The later New York findings supply that comparison directly.

MoneyGram Breached the Agreement Meant to Fix Its Controls

MoneyGram’s later resolution expressly identified a breach of its earlier agreement. Under its 2012 deferred prosecution agreement in the criminal case, MoneyGram admitted aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program.

The admitted conduct reached decisions about the agents through whom customers sent money. Managers rejected fraud staff’s recommendations to terminate agents. Fraud and anti-money laundering information did not flow adequately, and the company failed to file suspicious activity reports on agents known to be involved in fraud.

A money-transfer network connects the agent accepting the customer’s money, the principal business, its banking arrangements and the agent paying the recipient. Managers kept those agents in the network while consumers lost money to the fraud they helped move.

The Justice Department’s November 2018 extension announcement said continuing deficiencies breached the original agreement. The company had promised to fix the controls that let corrupt agents keep operating. The later agreement documented the failure of that promise.

TD Bank’s Earlier Matter Had a Different Scope

TD Bank’s 2013 and 2024 matters concerned different scopes of failure. The Financial Crimes Enforcement Network’s 2013 assessment addressed failures to detect and report suspicious activity associated with a Ponzi scheme. The later resolution addressed enterprise-wide anti-money laundering failures.

In the October 2024 criminal case, TD Bank pleaded guilty to conspiring to fail to maintain a compliant anti-money laundering program, fail to file accurate currency transaction reports and launder money. In its guilty plea, the bank admitted conduct involving management choices, monitoring gaps and employee-assisted laundering. Its U.S. holding company separately pleaded guilty to causing failures in the bank’s anti-money laundering program and currency reporting.

How to Compare Penalty Orders Across Agencies Without Double Counting

Orders from different agencies can credit the same payment toward more than one penalty. Capital One’s January 2021 Financial Crimes Enforcement Network assessment, concerning controls and reporting for check-cashing customers, imposed $390 million. It credited an earlier $100 million payment to the Office of the Comptroller of the Currency and said $290 million was left to pay.

Bank of America Had to Make the Fix Work

Bank of America’s October 2026 order from the Office of the Comptroller of the Currency found insufficient remediation after its December 2024 order. The regulator had already told the bank what needed fixing.

The earlier order required an independent program assessment, transaction-monitoring validation and retrospective reviews for missed or defective suspicious activity reports. Governance, staffing, internal audit and training also needed strengthening. Compliance required implementation, sustained effectiveness and verification by the Office of the Comptroller of the Currency. Adopting a plan was only the beginning of that work.

The later findings described continuing control gaps. Management had received reports identifying potentially suspicious activity that never reached investigation and lacked required reporting. The investigative backlog peaked at nearly 200,000 cases in 2024. Those findings connect management information, investigation capacity and the work left undone.

The Financial Crimes Enforcement Network’s separate order records the bank’s admissions about the decisions behind the monitoring. Its account of the Event Processor system describes a threshold the bank retained despite testing that found substantial suspicious-activity-reporting yields below it. Older alerts stopped contributing to customer scores. Suppression rules lacked adequate testing, and resource concerns affected the system’s operation.

The Financial Crimes Enforcement Network found failures to file timely and accurate suspicious activity reports on over $5 billion in suspicious transactions. It assessed a $1.2 billion civil penalty, crediting the $750 million payment to the Office of the Comptroller of the Currency.

The Treasury’s Office of Foreign Assets Control separately described prior cautionary letters about substantially similar sanctions conduct.

UBS Financial Services Replaced the System and Kept the Gap

UBS Financial Services’ 2026 Financial Crimes Enforcement Network consent order imposed a $125 million civil penalty after the broker-dealer’s earlier $14.5 million penalty in 2018. UBS admitted the stated facts and violations. Its monitoring problem survived the software replacement meant to correct it.

Before entering its December 2018 consent order, UBS Financial Services told the Financial Crimes Enforcement Network it expected a new automated monitoring system by mid-2019. It deployed the system in March 2021. Planning and testing deficiencies allowed the monitoring failure to persist into the second quarter of 2023. Management knew about the delays, but the firm failed to disclose the delayed and flawed upgrade until the agency’s own investigation was underway.

The interim process helps explain what that meant inside the business. Staff queried four systems and copied data into an Excel document. The report was error-prone and ran, at best, quarterly. Management wanted more frequent checks, but the change never reached the manual control before it was retired.

An Excel coding problem also undercounted foreign-currency wires and caused hundreds of transactions to miss alerts. Personnel who discovered the problem knew it affected earlier reports but took no immediate steps to escalate it or determine the scope. When the automated system arrived, many foreign-currency wires still escaped the intended monitoring scenarios. The agency’s investigation prompted questions about that coverage.

The order says UBS failed to appropriately monitor more than 61,500 foreign-currency wires worth more than $10.5 billion over more than four years. The software changed. The missing coverage survived.

What Are the Red Flags for AML Transaction Monitoring?

Anti-money laundering transaction monitoring red flags include gaps between written scenarios and deployed rules, excluded transactions, alert caps, growing backlogs and fixes that fail coverage testing. Whether a repeat bank AML settlement shows failed remediation or separate conduct turns on the original problem, the promised change and what later testing found.

U.S. Bank supplies a useful parallel about capacity. In the criminal deferred prosecution agreement announced in 2018, U.S. Bancorp accepted responsibility through stipulated facts describing a bank that limited transaction-monitoring alerts to staffing capacity. The staffing decision helped determine what the system would surface.

The Wharton Initiative on Financial Policy and Regulation’s 2024 paper, Anti-Money Laundering: Opportunities for Improvement, argues that anti-money laundering design has to reflect the capacity and information available to the institutions doing the work. One of its principles states:

The paper also argues for feedback about whether institutions collect and pass along the right information. The cases make that concern tangible inside a business: a monitoring specification, a deployment record, a failed test and a management response can describe different versions of the same promised repair. Someone who worked across those steps may know exactly where they stopped agreeing.

Whistleblower Rewards Follow Their Own Program

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For anti-money laundering information, the FinCEN whistleblower law can pay eligible whistleblowers a combined 10% to 30% of qualifying government collections in cases with monetary sanctions exceeding $1 million. Our whistleblower experts weigh which award program fits what you know.

You Know What Happened After the Promise

If you worked on an anti-money laundering repair that management called complete while the same gaps remained, tell our whistleblower experts where the fix broke down. We connect your knowledge of the systems and decisions to a case strategy, bring in AML whistleblower lawyers with the right enforcement experience and stay beside you through the case.