Pamrapo Savings Bank Of NJ Pleads Guilty To Bank Secrecy Act Violations And Forfeits $5 Million

Pamrapo Savings Bank S.L.A., a wholly-owned subsidiary of Pamrapo Bancorp Inc., based in Bayonne, N.J., pleaded guilty today to conspiracy to violate the Bank Secrecy Act (“BSA”) and agreed to forfeit $5 million to the United States.  

According to the criminal information, Pamrapo conspired with others to conceal its customers’ illegal or suspicious activities by failing to file currency transaction reports (“CTRs”) and suspicious activity reports (“SARs”) and by willfully failing to maintain adequate anti-money laundering programs. Pamrapo admitted that it willfully violated the BSA to avoid the expenses associated with compliance, despite federal and state banking regulators telling Pamrapo as early as 2004 that its BSA and anti-money laundering programs contained serious and systemic deficiencies in critical areas required under the law. 
 
Specifically, Pamrapo admitted during its guilty plea that it unlawfully failed to file CTRs and SARs related to approximately $35 million in illegal and suspicious financial transactions, including more than $5 million in structured currency transactions. The bank acknowledged that its willful failure to maintain adequate BSA and anti-money laundering programs resulted in numerous and repeated violations of the law. 
 
In one specific example outlined in court documents, from approximately March 2005 to September 2006, a co-conspirator cashed approximately 586 checks worth a total of $3.2 million, payable to "cash" at multiple branches of Pamrapo. Each check was under $10,000, thus structured to evade the bank’s obligation to file CTRs. Ultimately, according to the court documents, Pamrapo willfully failed to file a SAR related to these known and repeated violations of the BSA. 
 
In addition, Pamrapo admitted that it made false and misleading statements to bank regulators, including OTS, to prevent regulatory oversight and enforcement of its deficient BSA compliance programs. 
 
The Office of Thrift Supervision (“OTS”) assessed a $5 million civil money penalty against Pamrapo for violations of the BSA, which will be deemed satisfied by the $5 million forfeiture. The Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury is also investigating Pamrapo for noncompliance with the BSA and may impose additional civil money penalties.