Exclusive: U.S. weighs $5 million fine against ex-MoneyGram compliance chief

Thu Apr 17, 2014 9:59am EDT
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By Brett Wolf

ST. LOUIS (Reuters) - The U.S. Treasury Department has notified a former compliance chief at MoneyGram International Inc that he may face a fine of up to $5 million over the money transfer giant's previously admitted failures to properly police transactions for illicit activity, sources familiar with the matter said.

Several months ago Treasury's Financial Crimes Enforcement Network (FinCEN) sent a letter to Thomas Haider, who was MoneyGram's chief compliance officer when the anti-money laundering lapses occurred, notifying him of the potential multi-million dollar penalty, the sources said.

They added that Haider and his legal counsel are expected to meet with FinCEN officials early next month to argue that he should not face a penalty.

FinCEN's push to hold Haider personally liable comes as the Justice and Treasury departments, as well as regulators, face pressure from Congress to hold accountable individuals at financial services firms where systemic anti-laundering failures have occurred and opened the U.S. financial system to criminal abuse.

Smaller penalties levied against individuals are increasingly common. In February, Wall Street's industry-funded watchdog, the Financial Industry Regulatory Authority, announced that New York-based investment firm Brown Brothers Harriman had agreed to pay $8 million over "substantial" anti-money laundering lapses. Its compliance officer, Harold Crawford, was personally fined $25,000.

A multi-million dollar penalty against a person accused of playing a role in an institution's anti-laundering failures would be unprecedented, however. That would send shock waves through the compliance profession and perhaps cause some top executives to rethink their decisions to do such work, compliance officers who asked not be named said.

Haider left MoneyGram in 2008 after 16 years with the firm, according to his LinkedIn profile. During 2008, Haider received more than $1.8 million in total compensation, although the lion's share of that money was part of a severance package, a 2009 filing with the Securities and Exchange Commission states.

Haider, who according to his LinkedIn profile now is a lobbyist for a league of credit unions in Texas, Oklahoma and Arkansas, did not respond to telephone and email messages seeking comment.   Continued...