FinCEN Assessment of Civil Monetary Penalty Against Unlicensed Money Transmitter Reveals the Importance of Compliance with Federal Regulations

Dec 20, 2010   

On December 16, 2010, the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”) announced an assessment of a civil money penalty of $12,000 against a New Jersey money transmitter for non-compliance with the Bank Secrecy Act (“BSA”). A copy of the announcement can be read here. The civil penalty serves as an important reminder to all money services businesses (“MSB”) of their requirements to remain in compliance with federal law.

FinCEN assessed the penalty against Baltic Financial Services, a money transmitter operating out of Montclair, New Jersey, for its non-compliance with money transmitter registration requirements under the BSA. The BSA requires money transmitters to register with FinCEN by filing a registration of money services business (“RMSB”) form, and renewing the registration every two years. There is no fee to register with FinCEN.

Though Baltic maintained a state money transmitters license in New Jersey, FinCEN stated that between 2005 and 2010, Baltic failed to maintain its federal registration and reporting requirements under the BSA despite knowledge of its requirements to do so. According To FinCEN, Baltic also ignored numerous contacts by FinCEN notifying Baltic that its registration had expired.

This case highlights the multiple levels at which an MSB must be compliant in order to operate. Most states require a MSB to obtain a license to conduct business in the state; however, an MSB is also required to register with the federal government and comply with the BSA and its applicable regulations. While the state licensing requirements are generally the more complex of the two, as revealed by this case, companies may face serious consequences for failing to keep up to date with federal registration requirements.

If you have questions pertaining to the BSA, FinCEN regulations, anti-money laundering compliance or how to ensure that your business maintains regulatory compliance at both the state and federal levels, contact Fuerst Ittleman PL at contact@fidjlaw.com.