Overview

Typical money laundering violations by U.S. financial institutions often include systemic noncompliance with the requirements of the BSA, such as the following: 

1. Failure to Establish or Maintain an Effective AML Program: Whistleblowers can report instances where a financial institution fails to develop and implement an adequate AML program, including policies, procedures, and controls to detect and prevent money laundering and other illicit activities. BSA Bittrex Case 31 USC 5318
2. Failure to File Suspicious Activity Reports (SARs): Whistleblowers can report situations where a financial institution negligently or willfully fails to file SARs for transactions that appear suspicious or involve funds derived from illegal activities. BSA Bittrex Case  31 USC 5311
3. Failure to File Currency Transaction Reports (CTRs): Whistleblowers can report instances where a financial institution negligently or willfully fails to file CTRs for cash transactions exceeding a certain threshold or engages in structuring transactions to evade reporting requirements. BSA Capital One Case 31 USC 5311
4. Inadequate Customer Due Diligence (CDD) and Know Your Customer (KYC) Procedures: Whistleblowers can report cases where a financial institution has weak or ineffective CDD and KYC processes, leading to insufficient customer identification, verification, or ongoing monitoring of high-risk accounts. BSA Global Trading Case FINCEN Final Rule CDD
5. Failure to Maintain Adequate Record-Keeping: Whistleblowers can report situations where a financial institution fails to maintain or retain required records, such as customer transactions, CTRs, SARs, or other relevant documentation for the specified time periods. 31 CFR 1010.410
6. Structuring: Also known as smurfing, structuring involves conducting multiple transactions in small amounts to evade reporting requirements and avoid detection. Whistleblowers can report instances where individuals or entities engage in smurfing activities, such as conducting repetitive transactions below the reporting threshold for Currency Transaction Reports (CTRs) or splitting a large sum of cash into smaller amounts to avoid triggering the reporting requirement. 31 USC 5324
7. Failure to register as a financial institution: Failing to register as a financial institution refers to the failure of a business or entity to properly register with the appropriate regulatory authority as required by the Bank Secrecy Act (BSA) in the United States. Under the BSA, certain types of financial institutions, such as banks, credit unions, money services businesses (MSBs), and securities brokers and dealers, are required to register with the Financial Crimes Enforcement Network (FinCEN). Failure to complete the registration process or intentionally operating as a financial institution without proper registration can be considered a violation of the BSA. BSA Helix Case 31 CFR 1010 Failure to Register as MSB
8. Failure to Report Foreign Bank and Financial Accounts (FBAR): U.S. persons with financial interests in foreign bank accounts exceeding a certain threshold are required to report those accounts annually. Violations occur when individuals fail to file FBARs or provide inaccurate or incomplete information. 31 USC 5314 

Whether FinCEN and other enforcement agencies pursue BSA violations depends on a range of factors including the nature and seriousness of the violations, their impact on the financial system, the pervasiveness of wrongdoing within an entity, any history of similar violations, and financial gain arising from the violations.