GRC Professional - February 2015 Edition | Page 11

IN DEPTH

PERSONAL LIABILITY
FEARS GROW

The demands and pressures of a risk and compliance role continue
to grow. And, now there is a concerning global trend towards
personal liability for risk and compliance staff. Daniel Sheehan.

From 2004
to 2009,
MoneyGram
profited from
the scheme
by collecting
fees and other
revenues on
the fraudulent
transactions.

THE PERSONAL RISK ASSOCIATED WITH
a risk and compliance role is sometimes an overlooked aspect to the function. But there has been
a growing trend across the world to make risk and
compliance staff personally responsible, if they fail
to act with due care. 
A number of recent cases has put the compliance profession on high alert about the dangers of
personal liability. Many compliance managers in the
United States (US) are increasingly worried about
personal liability for decisions they have made in
the course of doing their job. The US often leads the
rest of the world in regulatory trends, so the cases
may have global implications for the profession.
Leading the enforcement action has been the
US Treasury Department’s Financial Crimes
Enforcement Network (Fincen). Fincen fined
Thomas Haider, a former MoneyGram, chief compliance officer, $1 million last year for allegedly
failing to ensure that his former employer followed
anti-money-laundering laws.
In November 2012, MoneyGram agreed to
pay $100 million and enter into a deferred prosecution agreement with the US Justice Department to
resolve criminal charges for aiding and abetting
wire fraud and for failing to maintain an effective anti-money laundering program.
MoneyGram processed thousands of transactions for its own agents, known to be involved in
an international scheme that defrauded tens of
thousands of members of the US public out of at
least $100 million. From 2004 to 2009, MoneyGram
profited from the scheme by collecting fees and
other revenues on the fraudulent transactions.
Haider was chief compliance officer at the
money-transfer firm from 2003 to 2008. FinCEN

alleges that Haider failed to file suspicious-activity
reports on agents, “whom he knew or had reason to
suspect were engaged in fraud, money-laundering,
or other criminal activity.”
He also allegedly failed to take action against
agents based on complaints he received, which,
“led to thousands of innocent individuals being
duped out of millions of dollars,” Fincen said.
Haider has said he believes the allegations against
him are “unfounded.”
In February 2014, in another case, Harold
Crawford, Brown Brothers Harriman’s global antimoney-laundering compliance officer, was fined
for failing to establish an anti-money-laundering
program. Mr Crawford was fined $25,000 and suspended for one month. Brown Brothers Harriman
agreed to pay an $8 million fine.
More recently, a rogue compliance officer
was forced to resign and accept a ban from US
regulators. As part of the enforcement action by
the Superintendent of Financial Services, Bank of
Tokyo Mitsubishi was also fined $315 million. 
After demands from the regulator that Bank
of Tokyo Mitsubishi terminate his employment,
Tetsuro Anan (Manager, Anti-money Laundering
Compliance Office, Compliance Division) resigned
from the bank. On multiple occasions, despite being
responsible for anti-money laundering compliance,
Tetsuro Anan asked PwC to remove from its report
specific issues of material concern to regulators
about the Bank’s misconduct.
Additionally, two former Bank compliance
employees were also banned from conducting
business involving any New York banks (or other
financial institutions) regulated by the Department,
including BTMU’s New York branch.
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