U.S. Bancorp Says Its Relationship With Race-Car Driver Scott Tucker Under Investigation
06 August 2016 - 6:05AM
Dow Jones News
By Rachel Louise Ensign
U.S. Bancorp disclosed in a securities filing Friday that it is
the subject of an investigation into its relationship with indicted
race-car driver Scott Tucker.
The bank said the Manhattan U.S. attorney's office is
investigating its relationship with Mr. Tucker and has asked for
information on aspects of the lender's anti-money-laundering
controls, which are supposed to spot and prevent nefarious account
activity.
While U.S. Bank had previously disclosed it was cooperating with
an investigation of Mr. Tucker, it hadn't mentioned the scrutiny of
its own internal controls.
In February, Mr. Tucker, a businessman-turned-race-car driver,
and his lawyer were charged with overcharging customers hundreds of
millions of dollars in undisclosed fees in one of the largest
federal criminal payday-lending cases ever. Mr. Tucker had bank
accounts with U.S. Bank, the Minneapolis lender has said.
The disclosure adds to anti-money-laundering issues at U.S.
Bank. In October, it entered into a consent order with the Office
of the Comptroller of the Currency over issues with its
controls.
Under anti-money-laundering laws, banks can be penalized for
failing to spot suspicious activity running through customer
accounts. The size of such penalties have increased dramatically in
recent years.
For instance, in 2014, J.P. Morgan Chase & Co. paid a $1.7
billion penalty for failing to file a certain kind of
anti-money-laundering report to U.S. authorities on Bernard Madoff,
who was convicted of orchestrating an infamous Ponzi scheme.
Meanwhile, HSBC Holdings PLC in 2012 agreed to pay a $1.9 billion
penalty to settle allegations that included inadequate
anti-money-laundering controls.
In its recent disclosure, U.S. Bank didn't specify the size of
any potential penalty. The bank added $110 million to legal and
regulatory reserves in the second quarter, but didn't link this to
any specific cases.
Write to Rachel Louise Ensign at rachel.ensign@wsj.com
(END) Dow Jones Newswires
August 05, 2016 15:50 ET (19:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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