Biggest AML Fines of 2023

Posted by

Emmeline de Chazal

on 19 Oct 2023

AML penalties in 2023 were widespread. We unpack the year's largest fines and explain how these could have been avoided.

AML fines 2023

Anti-money laundering (AML) failures have made headlines this year, with some international banks falling short of AML laws. Penalties have been well into the millions, indicating the severity of these failings.

Key AML fines in 2023

  1. Binance - $4.3bn fine
  2. Crown Resorts - $450m fine
  3. Deutsche Bank - $186m fine
  4. Bank of Queensland - $50m capital penalty
  5. William Hill - £19.2m fine
  6. Guaranty Trust Bank UK Ltd - £7.6m fine
  7. ADM Investor Services International Ltd - £6.47m fine
  8. In Touch Games - £6.1m fine
  9. Royal Bank of Canada - $5.5m fine
  10. Al Rayan Bank - £4m fine

The causes of these penalties centre around a lack of due diligence and failure to conduct adequate risk assessments. In each case, the offenders fail to show regulators that they took reasonable steps to prevent money laundering, which results in a financial penalty.

We track these fines on an ongoing basis; find out more in our posts about the biggest AML fines of 2020, the biggest AML fines of 2021, and the latest penalties in 2022.

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Key AML fines of 2023 in detail

1. Binance - $4.3bn fine

Cryptocurrency exchange Binance has pleaded guilty and agreed to pay a $4.3bn fine after admitting that it engaged in money laundering, unlicensed money transmitting and sanctions violations, according to US regulators.

Its founder and CEO, Changpeng Zhao, who is known by his initials CZ, has resigned and will pay a $50m fine. He pleaded guilty to failing to maintain an effective AML program and now faces a possible jail term.

Prosecutors said that Binance had such poor controls that terrorists, cybercriminals, sanctions violators and child abusers channelled payments for years via its platform.

The crypto exchange failed to implement know-your-customer (KYC) protocols or monitor transactions and never filed a suspicious activity report (SAR) with FinCEN. It allowed users to open accounts and trade without submitting any information other than an email address, only requesting information in August 2021, while allowing existing users to keep trading until May 2022 without checks.

2. Crown Resorts - $450m fine

Crown Resorts has been fined $450m by the Australian Transaction Reports and Analysis Centre (AUSTRAC) for historical breaches of Australian AML laws at its Melbourn and Perth casinos. The financial intelligence agency admitted a failure to assess the money laundering and terrorist financing risks that its casinos faced.

The fine amount has been agreed upon by AUSTRAC, and Crown Resorts; however, it requires final approval from the Federal Court. Once approved, this will be the third-largest fine in Australian corporate history. The company's CEO, Ciarán Carruthers, Crown Resorts, is committed to rectifying its past failings.

3. Deutsche Bank - $186m fine

The Federal Reserve imposed a $186 million fine on Deutsche Bank and its U.S. affiliates for their inadequate efforts in addressing money laundering control issues and other previously identified shortcomings.

The Federal Reserve has warned Deutsche Bank that it must prioritise addressing several previously identified issues related to money laundering control problems and other deficiencies, or else it may face additional and more severe penalties.

The Fed has also instructed the bank to enhance its risk and data management. These issues were initially flagged in 2015 and 2017 consent orders, which were linked to inadequate controls in Deutsche's dealings with the Estonian branch of Danske Bank.

Deutsche Bank has responded, expressing its commitment to rectify the shortcomings identified by the Fed in the near future and noted that the fine has been mostly covered by provisions set aside in prior financial quarters.

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4. Bank of Queensland - $50m capital penalty

The Bank of Queensland (BOQ) has been issued a capital penalty of $50m. Regulators revealed that BOQ had breached prudential standards and failed to comply with anti-money laundering laws.

Based on other banks that have been caught in regulatory breaches, the costs for the BOQ could escalate as it is forced to improve its systems.

In a separate undertaking that BOQ has entered into with financial regulators AUSTRAC and the Australian Prudential Regulation Authority (APRA), the bank needs to hold $50m extra until it has addressed the regulator's concerns by implementing a remedial action plan.

5. William Hill - £19.2m fine

William Hill and its sister brand Mr Green have been fined a record £19.2m fine for social responsibility and anti-money laundering failures.

Extreme examples of failings included allowing a customer to open an account and spend £23,000 in 20 minutes without any checks. Other customers were allowed to spend £18,000 over 24 hours and £32,500 over two days, respectively, again without any income evidence and AML checks.

Customers were allowed to deposit high sums of money - which they subsequently lost - without appropriate anti-money laundering checks.

Many of the extreme examples occurred during lockdown, despite companies being warned by the Gambling Commission not to exploit vulnerable people during this time.

“When we launched this investigation, the failings we uncovered were so widespread and alarming serious consideration was given to licence suspension. However, because the operator immediately recognised their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history.”

- Andrew Rhodes, Gambling Commission.

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6. Guaranty Trust Bank UK Ltd - £7.6m fine

Guaranty Trust Bank UK Ltd was fined £7.6 million for serious weaknesses in its AML systems and controls. Among other things, it failed to conduct adequate customer risk assessments and due diligence on high-risk customers or establish the source of funds and wealth.

Since it was not a first-time offence for the bank, the fine was substantially increased. However, the bank has not disputed the FCA's findings and agreed to settle, which has allowed them to qualify for a 30% discount.

7. ADM Investor Services International Ltd - £6.47m fine

The FCA of the United Kingdom announced a fine of £6.47 million (equivalent to $7.9 million) imposed on ADM Investor Services International Limited, a commodities services broker. This fine was levied due to the company's "inadequate" anti-money laundering systems and controls.

The FCA emphasised that the company's business operations and its client base posed significant money laundering risks. This was attributed to the company's widespread global activities and its client list, which included individuals classified as politically exposed persons, known for their higher risk in terms of money laundering.

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8. In Touch Games - £6.1m fine

The UK Gambling Commission (UKGC) has fined an online gaming operator £6.1m for social responsibility and money laundering failings.

In Touch Games – which operates 11 online gaming platforms in the UK – failed to interact with a customer for seven weeks, although erratic play patterns and extended play periods were flagged. It also accepted a customer's claim that they earned £6,000 a month without seeking evidence, even when red flags were raised.

It's the third time the operator has faced action. It paid a £2.2m settlement in 2019 and was fined £3.4m in 2021. The Gambling Commission had warned of escalating fines for repeat offenders.

"Considering this operator’s history of failings, we expected to see significant improvement when we carried out our planned compliance assessment. Disappointingly, although many improvements had been made, there was still more to do. This £6.1m fine shows that we will take escalating enforcement action where failures are repeated, and all licensees should be acutely aware of this."

- Kay Roberts, Executive Director of Operations, UKGC

9. Royal Bank of Canada - $5.5m fine

Canada's largest bank, Royal Bank of Canada, faces a hefty C$7.48 million ($5.5 million) fine for failing to report suspicious transactions and lacking adequate anti-money laundering and terrorist financing safeguards.

Fintrac, the country's financial watchdog, found 16 missed reports out of 130 reviewed, raising concerns about the bank's internal procedures and potential vulnerabilities within the Canadian financial system.

While Royal Bank didn't admit wrongdoing, they agreed to the fine and promised improvements, leaving questions lingering about the effectiveness of existing regulations in combating financial crime.

10. Al Rayan Bank - £4m fine

The UK's biggest Islamic bank was fined £4m by the FCA for failing to conduct adequate checks on high-risk customers' wealth. Al Rayan Bank didn't keep due diligence records up-to-date or have proper processes for handling large cash deposits. There was also a lack of AML training.

Despite being warned of shortcomings by its Second Line of Defence, problems hadn't been addressed.

“Maintaining strong defences against the evolving threats of financial crime is an essential part of our business plan and is being led by the new board and executive team.”

- Giles Cunningham, CEO Al Rayan Bank

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Are there trends in AML fines imposed in 2023?

There are no definitive trends in AML fines imposed in 2023. However, the war in Ukraine sparked numerous sanctions, which has put financial crime in the spotlight for businesses with a growing need to comply with regulations.

The trend of repeat offending by big firms is apparent in the USA and the UK, which can see a rise in penalty amounts issued. Post fines, companies generally invest more in compliance, but this is found to be quite poorly monitored and enforced, which could continue this trend.

Which countries have the most AML fines in 2023?

The top 5 countries with the most AML fines in 2023 are:

  1. United States
  2. United Kingdom
  3. Switzerland
  4. Singapore
  5. Hong Kong

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