Biggest AML Fines of 2024

Posted by

Emmeline de Chazal

on 26 Apr 2024

AML penalties have already made headlines this year. We unpack 2024's largest fines thus far and explain how these could have been avoided.

AML fines 2024

Anti-money laundering (AML) failures have been widespread, with firms failing to meet their AML obligations. Fines have been well into the millions, indicating the severity of these failings.

Key AML fines in 2024

  1. MGM Grand & The Cosmopolitan - $7.45m settlement
  2. Estate Agents - £1.6m fine
  3. Commerzbank - $1.5m fine
  4. Fairbrother & Darlow - $16k fine

The causes of these penalties are varied, including a lack of due diligence and failure to fulfil AML responsibilities. 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, in 2022 and the latest penalties in 2023.

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Key AML fines of 2024 in detail

1. MGM Grand & The Cosmopolitan - $7.45m settlement

Two major Las Vegas casino resorts, MGM Grand and The Cosmopolitan, will collectively pay a settlement of $7.45 million for violating AML regulations linked to an illicit sports betting scheme. 

The US Attorney’s Office for the Central District of California revealed that the casinos failed to adhere to Bank Secrecy Act (BSA) requirements concerning the reporting of suspicious transactions. Former MGM Grand President Scott Sibella pleaded guilty to failing to report such transactions during his tenure from August 2017 to February 2022.

The charges against Sibella and subsequent legal actions against MGM Grand and The Cosmopolitan are connected to an illegal bookmaking operation managed by Wayne Nix. Sibella admitted to knowing about Nix's illegal sports betting ring but allowed him to gamble at the casino nonetheless.

By permitting Nix to gamble at the MGM Grand, the casino failed to conduct proper source of funds (SOF) checks and potentially facilitated the laundering of criminal proceeds from illegal gambling activities.

Similarly, The Cosmopolitan admitted that one of its casino hosts was aware of Nix's illegal business and allowed him to gamble with illicit funds without informing the compliance department.

2. Estate Agents - £1.6m fine

HMRC has revealed that 254 estate agency businesses faced fines totalling over £1.6 million for failing to register or re-register for AML compliance. Penalties ranged from £1,500 to over £50,000.

“Registering with HMRC is one of the most basic requirements of the Money Laundering Regulations (MLR). However, so many businesses fail to complete this simple obligation, either by ignorance or by believing that the regulations simply do not apply to them.”

- Malcolm Driscoll, Lead AML Consultant, FCS Compliance

HMRC plans to release a follow-up list detailing additional penalties for breaches, including inadequate documentation, incomplete or incorrect Customer Due Diligence (CDD), and failure to recognise specific risks.

Driscoll emphasised the need for businesses to comply with AML obligations, likening them to legal requirements for driving. HMRC's inspections will inform further penalties, highlighting the necessity for accurate AML policies, regular staff training, and thorough CDD procedures to mitigate risks and avoid hefty fines.

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3. Commerzbank - $1.5m fine

Germany's financial watchdog, BaFin, has penalised Commerzbank with a fine of 1.45 million euros ($1.5m) for failing to fulfil its anti-money laundering responsibilities. BaFin stated that both Commerzbank AG and its predecessor, comdirect Bank AG, neglected their supervisory duties.

The bank failed to update customer data promptly and implement sufficient security measures, leading to inadequate due diligence in three instances, thus breaching anti-money laundering obligations.

4. Fairbrother & Darlow - $16k fine

Fairbrother & Darlow, a law firm in Bracknell, has been fined £16,000 by the Solicitors Regulation Authority (SRA) for lacking adequate AML controls over nearly six years. This penalty is part of a trend, with other firms collectively fined almost £50,000 last month for similar breaches.

The SRA's review, conducted almost two years ago, revealed the firm's failure to comply with the Money Laundering Regulations of 2017, including the absence of firm-wide risk assessments and policies. Despite submitting a declaration of compliance in 2020, the firm only achieved compliance in 2023, demonstrating a prolonged pattern of non-compliance and recklessness.

The SRA emphasised that the firm disregarded guidance and warning notices, posing risks to the public interest and confidence in the legal profession. Based on a percentage of annual domestic turnover, the financial penalty was placed in the mid-range due to the seriousness of the misconduct. However, the SRA recognised the firm's cooperation with the investigation, admissions, and efforts to remedy the breaches as mitigating factors.

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Are there trends in 2024 AML fines?

In terms of trends, there's a pronounced global shift towards emphasising enhanced due diligence. In Europe, recent regulations in 2024 spotlight Customer Due Diligence (CDD) and the disclosure of beneficial ownership information for financial institutions.

Meanwhile, in the Asia-Pacific region, regulators are advocating for more rigorous due diligence procedures to mitigate risks inherent in cross-border transactions. Africa is also working to bolster transparency regarding beneficial ownership for various entities.

This concerted global effort underscores the necessity of acquiring comprehensive information about customers and entities to fortify AML/CFT programmes and ensure compliance, curbing money laundering and terrorist financing activities.

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