US Treasury’s stark warning to Financial Institutions on Financial Crime

Treasury deploys cutting-edge technology to target potential money laundering breaches

US Treasury Secretary, Scott Bessent, has issued a serious video warning to MSB’s, Banks and all Financial Institutions, cautioning that potential cartel related money laundering will be rooted out and that aggressive action is being taken against firms that allow money laundering through ineffective controls, as FinCEN and the IRS are in the process of conducting AML Compliance Reviews at over 100 MSB’s and Financial Institutions with numerous additional planned audits in the near future.

The Financial Crimes Enforcement Network (“FinCEN”) is using new technology to target MSBs and Financial Services sectors that it considers to be at higher risk of AML failures and Banking Secrecy Act violations.

According to a press release from FinCEN, it is now applying high-performance data processing to uncover illicit networks and protect the U.S. financial system from evolving threats. It states that the Treasury’s modernization efforts have strengthened FinCEN’s ability to transform fragmented financial information into reliable, decision-grade leads at scale.

Advanced computerized tools to evaluate AML programs remotely

FinCEN is implementing advanced Computerized Tools to evaluate MSB’s, Banks and other Financial Institutions AML Programs, including through the number of Currency Transaction and Suspicious Activity Reports they have filed, and the type of customers they have (including customer backgrounds, locations, financial activities etc).

Through this, they are now be able to scan large masses of data to identify ineffective / problem MSBs and other financial institutions (assessing / comparing number of Currency Transaction Reports and Suspicious Activity Reports filed by business type, size, location, quality of reports submitted, etc.).

FinCEN reminds MSBs and all Financial Institutions that they must implement Effective Risk Based AML Compliance Programs, containing the 5 Pillars of AML Compliance (core elements regulators expect financial institutions (and many non-financial businesses) to have in place):

1. Internal Policies, Procedures, and Controls

Documented AML policies tailored to the organization’s risk profile, including processes for customer onboarding, automated transaction monitoring, effective workflows, Regulatory Reporting (Currency Transaction, Suspicious Activity, OFAC / Sanctions Screening, etc.) and recordkeeping.

2. Customer Due Diligence (CDD), Know Your Customer (KYC) and Enhanced Due Diligence (EDD)

Risk-based CDD, KYC identification and verification of customers, including understanding the nature and purpose of relationships, beneficial ownership, and conducting enhanced due diligence for higher-risk customers.

3. Ongoing Employee Training

Regular, role-appropriate training so staff can recognize red flags, understand AML obligations, and know how to escalate suspicious activity.

4. Independent Testing and Audits

Periodic reviews (internal audit or external third party) to assess the effectiveness of the AML program and identify gaps or weaknesses.

5. Designation of a Compliance Officer

A qualified individual responsible for overseeing the AML program, ensuring regulatory compliance, updating policies, and acting as the point of contact with regulators.

As stated above, the article confirms FinCEN’s more extensive use of Currency Transaction Reports and Suspicious Activity Reports to include discovering firms with apparent ineffective AML Compliance programs,as well as, tracking and comparing by location which MSB’s, Banks and other Financial Institutions are filing by the numbers, Currency Transaction Reports and Suspicious Activity Reports.

Current multi-tiered operation targeting more that 100 MSBs

A current multi-tiered operation, targeting more than 100 U.S. money services businesses (MSBs) operating along the southwest border, has so far resulted in the issuance of six notices of investigation, dozens of examination referrals to the IRS, and over 50 compliance outreach letters. These tiered actions are designed to address the money laundering vulnerabilities created by MSBs that appear to be non-compliant with the Bank Secrecy Act.

“At President Trump’s direction, the Treasury Department is utilizing all tools to stop terrorist cartels, drug traffickers, and human smugglers,” said Secretary of the Treasury Scott Bessent.  “This sweeping operation will help root out potential cartel-related money laundering from the U.S. financial system.”

FinCen stressed that this is an ongoing operation in which it would follow the facts and, where appropriate, seek to impose civil money penalties, pursue civil injunctive actions, issue warning letters, and make referrals to criminal authorities for wilful violations of the Bank Secrecy Act (BSA).

Wider drive to strengthen AML enforcement regime

This announcement came shortly after FinCen announced it had assessed a $3,500,000 civil money penalty against Paxful in 2025 and historic $1.3 Billion civil money penalty against TD Bank in 2024 (Further details here) for willful violations of the Bank Secrecy Act (BSA) and reminded readers of its Whistleblower Incentive Program, through which individuals may be eligible for awards if the information they provide leads to a successful enforcement action that results in monetary penalties exceeding $1,000,000.

MSBs and FS Firms should review their AML frameworks and training

As the US Government steps up its focus on money laundering breaches, MSBs and other non-bank financial institutions, we recommend that FS firms undertake a review of their AML frameworks, controls and processes, as well as ensuring that their AML training is fit for purpose.

At Neopay Global, we help a wide range of clients ensure their AML and wider compliance frameworks are effective and balanced.  From informal reviews to formal audits, training and workshops and on going adhoc support, we support payments and emoney firms to achieving confidence that their compliance meets regulation whilst still enabling them to grow  and develop their business.

“Neopay Global truly take the time to understand our business and operations. This approach means we get recommendations that are actually relevant to what we do, rather than generic findings. The team is thorough, incredibly knowledgeable, and always quick to answer any questions we have. Their insights into the payments industry are invaluable, and we feel fully supported by such an engaged and responsive compliance partner.” Payfare

If you’d like support reviewing your AML framework, strengthening your controls, or preparing for regulatory scrutiny, click here to contact Neopay Global and speak with our AML specialists.

Source: https://home.treasury.gov/news/press-releases/sb0344