Enforcement Actions And Termination Of Previous Actions - Company Business and Marketing

Federal Reserve Bulletin, Feb, 2001

The Federal Reserve Board on December 12, 2000, announced the issuance of several enforcement actions related to foreign banking organizations that had been involved with Operation Casablanca.

Operation Casablanca was a law enforcement undercover operation that resulted in numerous criminal money laundering convictions of drug traffickers, bankers, and two foreign banking organizations with operations in the United States--Bancomer, S.A., Mexico City, Mexico, and Banca Serfin, S.A., Lomas de Sante Fe, Mexico. The Federal Reserve provided substantial assistance to the U.S. Customs Service and the U.S. Department of Justice during the undercover operation and subsequent prosecutions.

On May 18, 1998, in response to the alleged misconduct by employees of several foreign banking organizations whose activities were identified during Operation Casablanca, the Federal Reserve Board issued temporary orders to cease and desist. The temporary orders required the banks to enhance their anti-money-laundering policies and procedures in the United States.

The Federal Reserve Board's actions included the following:

* The issuance of an order with regard to Bancomer, S.A., determining that it is not necessary to terminate the U.S. operations of the bank as a result of the bank's conviction for a money laundering offense in the United States

* The issuance of a consent cease and desist order against Bancomer, S.A., requiring continued enhancements of the bank's anti-money-laundering policies and procedures

* Because Banca Serfin, S.A. ceased all operations in the United States at the end of 1999, no further enforcement action against the bank was necessary

* The issuance of a written agreement between Banco Industrial de Venezuela and the Federal Reserve Bank of Atlanta, requiring continued enhancements of the bank's anti-money-laundering policies and procedures

* The termination of the temporary orders to cease and desist that had been issued against Bancomer, S.A., Banca Serfin, S.A., and Banco Industrial de Venezuela.

In March 2000, the Federal Reserve Board terminated temporary cease and desist orders that had been issued in 1998 against Banco Nacional de Mexico, Mexico City, Mexico; Banco Internacional, S.A., Mexico City, Mexico; and Banco Santander, Madrid, Spain.

The issuance of these enforcement actions concludes the Federal Reserve's enforcement efforts arising out of Operation Casablanca.

The Federal Reserve Board on December 12, 2000, announced the issuance of an order of prohibition against Bruce Jeffrey Kingdon, a former partner, operating committee member, managing director, employee, and institution-affiliated party of the Bankers Trust Company, New York, New York.

Mr. Kingdon, without admitting to any allegations, consented to the issuance of the order as a result of his alleged violations of law, unsafe or unsound banking practices, and breaches of his fiduciary duties to Bankers Trust and its customers.

The Federal Reserve Board on December 12, 2000, announced the execution of a written agreement by and between People's Bancshares, Inc., New Bedford, Massachusetts, and the Federal Reserve Bank of Boston.

The Federal Reserve Board announced on December 13, 2000, the issuance of a final decision and order of prohibition against Kaye G. Hill, former employee, Barnett Bank, N.A., Jacksonville, Florida. The order, the result of an action brought by the Office of the Comptroller of the Currency, prohibits Ms. Hill from participating in the conduct of the affairs of any financial institution or holding company.