Manulife has admitted that it was the bank fined $1.2 million last year by Canada’s money laundering and terrorism financing watchdog, Fintrac.
Fintrac had kept the bank’s name secret when it announced the fine last April, and continued to refuse to name the bank, even after all legal avenues of appeal had been exhausted.
Last December, the Star and the National Observer revealed that the unnamed bank was fined for failing to report more than 1,200 electronic funds transfers of $10,000 or more made by Andrew Strempler, a convicted felon in the United States.
In an attempt to identify the bank, the Star and the National Observer surveyed all 32 Schedule I banks in Canada, asking them to clearly state whether they were the bank involved.
While virtually all the banks responded unequivocally, Manulife wrote: “We do not comment on any matters regarding our regulators, whether they are rumour, speculation or fact.”
On Monday, Manulife issued a statement publically confirming it was the bank in question.
“The penalty essentially related to administrative lapses in reporting to Fintrac. Although we operate at the highest ethical standard, we are capable of administrative errors. They were remedied in the first half of 2014. There is no evidence to suggest that the administrative reporting violations were connected to any financial misconduct.”
Fintrac documents obtained by the Star and the National Observer, through access to information legislation, show Manulife’s fine, which was reduced twice from an initial $1.8 million, was for five different types of violations of anti-money laundering and anti-terrorism financing law, involving a failure to report transfers totalling at least $12.2 million.
Manulife failed to report one suspicious transaction to Fintrac, a “very serious” violation that experts say undermines Canada’s system to detect financial crimes and trace dirty money.
The bank also failed to report 1,174 outgoing international electronic transfers of $10,000 or more, 45 deposits of $10,000 or more in cash and four incoming international electronic transfers of $10,000 or more.
Manulife was also fined for failing to “develop and apply compliance policies and procedures.”
Records show the violations related to Manulife’s business with Andrew Strempler, a Winnipeg-based pharmacist who made millions selling counterfeit medication to Americans over the Internet. Strempler was arrested in Panama, where he had moved with his family, and extradited back to the U.S, where he was convicted for mail fraud and sentenced to four years in prison.
“Manulife did not enable or facilitate money-laundering and media reports to the contrary are inaccurate,” said Manulife in its statement.
“One violation involved a customer who had already been reported to law enforcement and Fintrac by Manulife. Additional information released by Fintrac in 2016 shows that Manulife proactively worked with law enforcement in both Canada and the United States in relation to the matter underlying the one suspicious transaction report (STR) violation, including advising law enforcement prior to the failure to file this one STR.”
“As we have paid the penalty and remedied the administrative reporting lapses, we consider this matter behind us and will be providing no further comment.”
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