Asheboro bank ordered to pay $400k to victims of Ponzi scheme
Published: April 29, 2011
CommunityONE Bank is charged with failing to maintain an effective anti-money laundering program. As a result, the prosecution agreement recognizes the bank has committed to overhauling its anti-money laundering program.
“Banks asleep at the switch need to wake up,” U.S. Attorney Anne Tompkins said. “Federal law requires banks to implement a robust and proactive anti-money laundering program to detect fraud and protect the public from harm.”
“By agreeing to pay restitution to the victims of a customer’s investment fraud scheme, and to overhaul its anti-money laundering program, the bank has begun the process of righting its wrongs,” Assistant Attorney General Lanny Breuer said. “We will take every necessary step to hold banks committing similar offenses to account.”
From April 2007 until September 2009, Simmons deposited more than $35 million in investor funds into one account with the bank and withdrew over the same time span more than $35 million from the same account.
The bank’s records also showed that Simmons diverted more than $2 million to other accounts with thebank that he controlled to operate his other businesses; diverted nearly $800,000 in cash withdrawals, gift cards and transfers to his personal account with the bank; and diverted numerous payments to support his luxurious lifestyle including payments for private jets, vehicles and gifts.
Under the Bank Secrecy Act, banks are required to establish, implement and maintain programs designed to detect and report suspicious activity indicative of money laundering and other financial crimes.
“The Bank Secrecy Act was enacted to protect the public from harm by identifying and detecting money laundering from criminal enterprises, terrorism, tax evasion or other unlawful activities,” Jeannine Hammett,special agent in charge for Internal Revenue Service Criminal Investigation, explained.