Liberty fined $600,000 for AML breach

NEW YORK – US regulators imposed a $600,000 civil fine on the Manhattan-based Liberty Bank in mid-May. The bank, which focuses on Korean-American customers, was upbraided for violations of federal and state anti-money laundering laws in a statement issued by the Financial Crimes Enforcement Network (FinCEN), the Federal Deposit Insurance Corporation and the New York State Banking Department. Liberty did not admit wrongdoing.

Liberty itself is being acquired by Los Angles' Wilshire Bancorp – which also serves Korean-American customers – for $15.7 million of cash and stock. Final regulatory approval for the deal was received in April.

The regulators said Liberty Bank had failed to implement an adequate Bank Secrecy Act/anti-money laundering programme, with internal controls and appropriate measures to detect and report money laundering and other suspicious activity in a timely manner. The regulators also found that systemic defects in Liberty Bank's anti-money laundering programme resulted in a failure to comply with information-sharing requests from law enforcement under section 314(a) of the USA Patriot Act.

"Today's action against Liberty Bank of New York is a great example of what can be accomplished when state and federal regulators share information," says Diana Taylor, New York state banking superintendent. "The memorandum of understanding signed by the banking department and FinCEN in April 2005 has greatly improved regulators' and law enforcements' ability to take action against institutions that violate the Bank Secrecy Act and anti-money laundering laws."