FDIC Tells Banesco USA in Florida to Fix Anti-Laundering Controls

The Federal Deposit Insurance Corp. has ordered Banesco USA in Coral Gables, Fla., to improve its anti-money laundering controls.

The $806 million-asset company and the FDIC entered into a consent order related to AML and Bank Secrecy Act controls, staffing and administration, Banesco said Friday. The bank did not disclose the specific requirements of the consent order, and the FDIC has not yet made the order public.

Banesco said it has already completed many of the changes the order required, such as creating a BSA committee on its board; adding compliance staff; increasing BSA/AML training; hiring consultants to review its controls; improving its method for rating AML risk; upgrading its reporting systems; and reviewing procedures for wire transfers and new accounts. Banesco said it expects to be in full compliance with the order next year.

"The bank's management, board of directors and shareholders are fully committed to an enhanced BSA/AML program and to meeting all requirements necessary to emerge from the order," said Banesco USA Chairman Carlos Palomares in a press release. "We discovered in late 2012 that the bank had deficiencies in its BSA/AML area and have been working very judiciously, and we are in ongoing contact with regulators to improve our systems, procedures and staff."

Banesco USA is a division of Venezuela's largest bank, Banesco International Financial Group, which has $35 billion in assets and operates in seven countries.

Lapses in Banesco USA's money-laundering and BSA controls reportedly led the division to oust former Chief Executive Rafael Saldaña, in September. Banesco named board member Seno Bril its interim CEO. The company also hired Alba Prestamo as chief risk officer in December 2012.

Banesco attributed the deficiencies in its internal controls to its recent growth, including the FDIC-assisted purchase of Security Bank in North Lauderdale, Fla., last year. The bank's "policies and procedures on BSA/AML did not keep pace with the volume of work generated" by the growth, it said Friday.

Banesco raised $17 million from its investors in the past two quarters, according to reports. It has raised a total of $37 million in the past two years, it said.