WASHINGTON — Treasury's Financial Crimes Enforcement Network Wednesday announced a $100,000 civil money penalty against a former credit union employee in connection with a cross-border money laundering operation that transformed roughly $1 billion in Mexican cash and checks to electronic deposits using the credit union's Fed master account.
Fincen issued a consent order against Gyanendra Kumar Asre, formerly employed with the now-defunct New York State Employees' Federal Credit Union, which found that Asre willfully violated federal anti-money-laundering laws in his capacity at NYSEFCU and also by neglecting to register the money services business DDH Group LLC, where he served as chairman and chief executive officer, with the Treasury's crime unit. The consent order fined Asre $100,000 and barred him from working with any BSA-bound firm for five years. Asre has also pleaded guilty to related criminal charges filed by the Department of Justice.
"Asre allowed millions of dollars in high-risk transactions to be processed without required anti-money-laundering controls or reporting to Fincen," said Fincen Director Andrea Gacki. "Today's action serves as a reminder that Fincen will not hesitate to take action against individuals when their conduct jeopardizes the integrity of our financial system."
According to the order, Asre reportedly transformed the New York–based credit union from a single branch, not-for-profit credit union serving the state's civil servants with a single common-bond field of membership into a vessel for smuggling bulk paper notes and currency from abroad.
Asre was also a senior employee of IBI Armored Car at the time he approached NYSEFCU in early 2014. After arrival, he quickly began to co-opt the NYSEFCU to allow two large Mexico-based banks to transform foreign nationals' wholesale cash and checks into electronic deposits.
Asre offered to help manage the credit union — promising the credit union greater revenue — if, in turn, NYSEFCU would open its field of membership in order to bank IBI's 150 employees.
In March 2015, after Asre took over as NYSEFCU's Bank Secrecy Act Compliance Officer, the credit union requested — and later received authorization from — the National Credit Union Administration to convert its charter to a multiple common-bond charter to accommodate the credit union's ability to serve the 150 IBI employees. Around the same time, Asre successfully pushed NYSEFCU to open a master account at the Federal Reserve Bank of New York to facilitate international transfers for IBI.
Asre then used a money services business named NYSEFCU-CUSO, LLC — partially controlled by Asre and established in July 2014 as a special purpose Credit Union Service Organization — to accept bulk cash deposits from a large unnamed Mexican bank. IBI then began to accept bulk cash from the Mexican Bank, which it physically deposited in IBI's NYSEFCU account. Once deposited, the New York employee credit union internally transferred the money to Asre's MSB NYSEFCU-CUSO. Using the newly acquired Fed master account, the credit union then would transmit such funds by wire transfer back to the foreign bank. The scheme continued for over a year according to Fincen, with Asre directing the transactions.
Asre's promise to increase the credit union's revenue came to fruition. And while the cross-border cash-to-electronic-deposit scheme grew to encompass the vast majority of the credit union's revenue, Fincen noted, the alleged scheme also led to NYSEFCU's demise.
"NYSEFCU's business model changed drastically to incorporate bulk currency transactions from Mexico, which ultimately became 99% of NYSEFCU's revenue before currency repatriation services were ceased," the consent order noted. "Thereafter, Asre controlled almost the entirety of the Credit Union's revenue source until the Credit Union ceased operations in October 2017."
Asre also failed to register one of his money services businesses with Fincen, which he was required to do within 180 days of incorporation. While in his role as BSA compliance officer at the New York credit union, Asre was familiar with this requirement, and while he did register one MSB NYSEFCU-CUSO with Fincen in February 2015, DDH was never registered.
During his time at the credit union, Asre also knowingly failed to implement adequate internal controls to trigger BSA compliance or identify suspicious activity, failed to implement proper know-your-customer compliance and in his capacity as AML officer incorrectly assessed the credit union as low-risk in filings to the NCUA despite the previously unsophisticated firm's rapid ascent as a cross-border bulk cash importer and international check clearer. Asre also reportedly never provided formal BSA training to the NYSEFCU's compliance staff and the credit union did not file a single suspicious activity report during Asre's stint as an AML compliance officer.
According to the order, this negligence aroused the suspicions of the NCUA, the credit union's primary supervisor.
"In early 2016, the NCUA mandated a suspicious activity lookback, which concluded that during Asre's tenure NYSEFCU failed to file dozens of SARs on the MSBs associated with Asre," noted the consent order. "The total unreported suspicious transaction volume associated with Asre's scheme that should have been reported in SARs is over $940,000,000."
The NCUA instructed the credit union to discontinue services to Asre's "customers" by June 17, 2016, and commission an independent audit of its AML program. Naturally, the auditor identified multiple issues in NYSEFCU's compliance programs and Asre's actions and the ensuing BSA violations played a significant role in NCUA's decision to liquidate NYSEFCU in October 2017 according to the order.
Asre allegedly had a history of funneling high-risk transactions from Mexico. He worked in a senior role facilitating bulk cash transactions at HSBC's U.S. branch in the 2000s. HSBC was involved in a
Asre also worked as vice president of correspondent banking at CBW Bank of Weir, Kansas. CBW was directed — in an August 2020
As part of Wednesday's consent order, Asre admitted to willfully violating federal anti-money-laundering statutes by failing to register his money services business with Fincen and failing to maintain an effective AML program at NYSEFCU. Asre simultaneously entered into a
