WASHINGTON (3/28/16)--The owner and compliance officer of Thriftway Food Mart were hit with a civil money penalty last week, stemming from “willful and repeated” violations of the Bank Secrecy Act (BSA). The compliance officer, Kustandy Rayyan, has admitted to the conduct and agreed to a $10,000 penalty, according to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
According to FinCEN, Thriftway was the subject of a prior investigation based on a 2009 Internal Revenue Service (IRS) examination conducted that found systemic anti-money laundering (AML) program violations, recordkeeping violations and reporting violations.
FinCEN issued a warning letter at that time, advising the company that FinCEN expected it to take corrective actions. A subsequent IRS follow-up examination in 2013 found continued violations.
Among Thriftway’s violations:
Thriftway conducted roughly $1 million in check cashing volume and money order sales per month, but frequently failed to file timely, accurate Currency Transaction Reports (CTRs), which potentially deprived valuable investigatory information to law enforcement agencies.
The 2013 IRS examination found that one-third of the CTRs filed by Thriftway were delinquent, and 95% of the CTRs were filed with incomplete or inaccurate information.
Serving money services businesses, defined as businesses that transmit or convert money, can be complex for credit unions, as they often require enhanced due diligence.
FinCEN issued guidance earlier this month which does not directly involve credit unions, but a strong understanding of MSB accounts reflects positively on credit unions serving them.