"Compliance Lapses Cost King Mail & Wireless Inc. $12K in Penalties"

BRIEF INTRO

King Mail & Wireless Inc., a financial institution and money services business based in Michigan, was fined by the Financial Crimes Enforcement Network (FinCEN) for multiple violations of the Bank Secrecy Act (BSA). The primary violations included failing to maintain an anti-money laundering program and not filing required reports for suspicious activities.

WHAT WENT WRONG

King Mail & Wireless processed millions of dollars in wire transactions to Yemen without appropriate monitoring or documentation, despite numerous "red flags" indicating potentially illicit activity. In the six-month IRS examination period, King Mail completed 2,606 “Send” transactions to Yemen for a total dollar amount of $2.7 million. These transactions showed several "red flags," such as:

· Dollar amounts inconsistent with family support

· Large amounts sent within a short period of time

· Large dollar amounts with no apparent business or lawful purpose

· Transactions sent to multiple beneficiaries in different locations in Yemen

· Multiple sends within one business day below the recordkeeping threshold

In addition, Ali Al Duais operated another money services business, Al Malik Wireless, Inc., which also exhibited similar BSA deficiencies. The owner, Ali Al Duais, and the company admitted to the violations and agreed to pay a civil penalty of $12,000. Both businesses have since been closed.

LESSONS LEARNED

Key Learnings for Other Financial Institutions:

1. Compliance is Non-Negotiable

2. Effective AML Programs are Essential

3. Automated Screening of Individuals and Transactions is Crucial

4. Regular Training for Personnel is Necessary

5. Independent Reviews are Vital

6. Up-to-Date Compliance Data is Essential

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Email: haris@fpmamlcheck.com