$300 Million in Fraud, $30 Million Penalty
White-collar crime pays quite nicely
The most “successful” thieves wear a shirt and tie, the saying goes.
Or, I think that’s a saying of some sort.
Anyway, Jason Mikula at Fintech Business Weekly has a story of a bank facilitating some $300 million in fraud. The penalty? Just 10% — $30 million.
The case involves lax oversight by Metropolitan Commercial Bank and one-time prepaid debit card issuer MovoCash.
Here’s more:
The Fed and NYDFS found that MCB’s BSA/AML and TPRM failures enabled bad actors to channel some $300 million of illegally obtained state unemployment benefits through MCB and MovoCash. Both MCB and MovoCash benefited from the fraud in the form of interchange and transaction fees.
The penalty assessed for MCB’s role? $30 million.
While MCB knew or had reason to know fraud was occurring as early as January 2020, they failed to act for nearly 7 months. As the Federal Reserve Board notes:
On July 6, 2020, the Bank was informed that at least 60,000–80,000 fraudulent MovoCash accounts were opened each week, and at least $2 million was being taken out of the system through ACH card-to-bank transactions per day.
