Pamrapo Savings Bank Of New Jersey Pleads Guilty To Conspiracy To Commit Bank Secrecy Act Violations And Forfeits $5 Million

WASHINGTON, March 29 /PRNewswire-USNewswire/ -- Pamrapo Savings Bank S.L.A., a wholly-owned subsidiary of Pamrapo Bancorp Inc., based in Bayonne, N.J., pleaded guilty today in U.S. District Court for the District of New Jersey to conspiracy to violate the Bank Secrecy Act and has agreed to forfeit $5 million to the United States.

The announcement was made by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Paul J. Fishman for the District of New Jersey; Special Agent in Charge William P. Offord, Internal Revenue Service (IRS)-Criminal Investigation; Acting Director John E. Bowman of the Office of Thrift Supervision (OTS); and Inspector General Jon T. Rymer, Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG).  

"This case is a good example of how disregarding reporting and compliance can turn into a crime," said Assistant Attorney General Lanny A. Breuer of the Criminal Division.  "Today's guilty plea by Pamrapo Savings Bank should remind financial institutions, large and small across the country, of the high price they will pay for ignoring the law."

"Pamrapo Savings Bank's repeated and blatant violation of the Bank Secrecy Act shielded criminals and their activities from detection and prosecution by law enforcement.  This case should send a strong message to banks that we will vigorously investigate and prosecute financial institutions that provide safe harbor to criminals," said U.S. Attorney Paul J. Fishman.

"Law enforcement relies on banks as the first layer of defense against money launderers and other criminal enterprises who choose to utilize our nation's financial institutions to further their criminal activity," said William P. Offord, Special Agent in Charge, IRS-Criminal Investigation.  "Pamrapo Savings Bank's blatant disregard for the Bank Secrecy Act reporting requirement rules removed that layer of defense, making it more difficult to identify, detect and deter these types of criminals."

According to the criminal information filed today in U.S. District Court in Trenton, N.J., Pamrapo Savings Bank 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 Savings Bank admitted that it willfully violated the Bank Secrecy Act to avoid the expenses associated with compliance, despite federal and state banking regulators telling Pamrapo Savings Bank as early as 2004 that its Bank Secrecy Act and anti-money laundering programs contained serious and systemic deficiencies in critical areas required under the law.  

Specifically, Pamrapo Savings Bank 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 Bank Secrecy Act 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 Savings Bank.  Each check was under $10,000, thus structured to evade the bank's obligation to file CTRs.  Ultimately, according to the court documents, Pamrapo Savings Bank willfully failed to file a SAR related to these known and repeated violations of the Bank Secrecy Act.

In addition, Pamrapo Savings Bank admitted that it made false and misleading statements to bank regulators, including OTS, to prevent regulatory oversight and enforcement of its deficient Bank Secrecy Act compliance programs.

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