AML Fine Roundup - 8 of the Biggest Penalties in 2023

This blog post explores the nuances of AML fines, their consequences, and some of the largest fines ever issued.

Money laundering is rife within the UK economy, with the £88 billion laundered each year constituting the second highest amount globally. It is only relatively recently that the UK government has made concerted efforts to seriously combat the problem. Given the scale of the challenge, it is perhaps no surprise that the laws introduced are some of the strictest and most harshly punished.

As a result, a significant amount of fines have been handed out to businesses that have broken these rules. These fines can range from a few hundred pounds to figures in the millions. Take a look at why the penalties are so serious, and the businesses that felt the full force of regulators’ fines…

Why The Penalties Are So Significant

In 2023, the rising complexity of financial crime led regulators to increase the penalties imposed on financial institutions (FIs) for insufficient anti-money laundering (AML) controls. 

As a result, the top penalties for non-compliance almost doubled in value. But what are the aims of such extreme measures?

Large fines serve as a deterrent to financial institutions and other entities covered by AML regulations. The threat of significant financial penalties incentivises compliance with AML laws and regulations. 

They also underscore the seriousness of the fight against money laundering, as it poses significant risks to the integrity of the financial system, and facilitates criminal activities such as drug trafficking, terrorism financing, and corruption. 

The UK authorities take a strong stance against such activities, and imposing large fines is not just to deter but also to reflect the seriousness with which they view violations.

As a result, they have curated strong AML laws and regulations, including the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2017. 

In turn, regulatory bodies such as the Financial Conduct Authority (FCA) have the authority to impose fines for non-compliance, and they utilise this power to ensure adherence to AML requirements. They are now actively hunting companies that do not have the proper compliance processes in place regardless of if they have been implicated in a money laundering scheme.

From a global perspective, the UK is committed to upholding international standards for combating money laundering and terrorist financing, as set forth by organisations such as the FATF. 

So businesses must meet these standards, or else risk the UK reputational damage and increased scrutiny from global financial regulators.

8 Biggest AML Fines in 2023 

1. Binance - $4 billion

2. Crown Resorts - $450 Million

3. Deutsche Bank - $186 Million

4. Bank of Queensland - $50 Million 

5. William Hill - £19.2 Million

6. Guaranty Trust Bank UK - £7.6 Million

7. ADM Investor Services International Ltd - £6.47 Million

8. In Touch Games - £6.1 Million

1. Binance - $4 billion

Binance Holdings Ltd., the world’s largest cryptocurrency exchange, announced the recovery of $4.4 billion in digital assets mishandled by users over the past two years. 

The mishandling included errors such as entering incorrect wallet addresses, depositing incompatible tokens, and issues arising from blockchain upgrades. The exchange resolved 381,616 cases of cryptocurrency deposits not credited to users in 2022 and 2023. 

This report follows Binance's efforts to move past a plea deal and addresses concerns over scams like "rug pulls." Binance's security chief warns against the resurgence of such scams, emphasising the importance of user vigilance in the cryptocurrency space.

2. Crown Resorts - $450 Million

Crown Resorts, facing penalties for significant breaches of anti-money laundering laws, has agreed to pay a $450 million fine in interest-free instalments. 

The breaches, described as "egregious" by the federal court, involved failures to monitor high-risk customers properly, allowing potential money laundering activities at its Melbourne and Perth casinos. 

Despite Crown's projected loss of $390 million for the 2023 financial year, the court approved a two-year payment plan. This penalty, signed off by Justice Michael Lee, reflects the seriousness of the contraventions and aims to deter similar conduct. Crown's recent ownership change and investment in financial crime resources signal efforts toward reform.

3. Deutsche Bank - $186 Million

The Federal Reserve has imposed a $186 million fine on Deutsche Bank and its U.S. affiliates for inadequately addressing money laundering control deficiencies, following previous regulatory concerns. 

These penalties underscore Deutsche Bank's ongoing struggles with regulators in Europe and the United States. 

The Fed instructed Deutsche to prioritise resolving identified issues or face further penalties, while also mandating improvements in risk and data management. Despite Deutsche Bank's commitment to addressing shortcomings, concerns remain about its regulatory compliance. 

The fine represents the latest challenge for the bank and its new U.S. operations leader, Stefan Simon, amid ongoing regulatory scrutiny and legal issues.

4. Bank of Queensland - $50 Million 

Bank of Queensland Ltd (BOQ.AX) commits to anti-money laundering and counter-terrorism financing laws via agreements with Australia's financial crime and prudential regulators. 

APRA accepted a court-enforceable undertaking due to breaches of prudential standards, prompting a review of BOQ's risk culture. Terms include a remedial action plan and an independent reviewer. 

AUSTRAC, the financial crime regulator, flagged concerns about BOQ's anti-money laundering systems. This reflects a concerted effort to safeguard Australia's financial system integrity.

5. William Hill - £19.2 Million

Three William Hill Group gambling businesses face a £19.2 million penalty for social responsibility and anti-money laundering failings. 

Failures include allowing large deposits without proper checks, inadequate customer risk identification, and insufficient interventions. The Gambling Commission opted for the largest enforcement payment in its history due to the severity of the breaches, although improvement efforts within the industry are noted. 

Enforcement actions reflect a broader trend of regulatory scrutiny, with over £76 million in penalties imposed on operators since 2022 for regulatory failures.

6. Guaranty Trust Bank UK - £7.6 Million

The FCA fined Guaranty Trust Bank UK £7.6 million due to serious weaknesses in its anti-money laundering systems and processes between 2014 and 2019.

7. ADM Investor Services International Ltd - £6.47 Million

ADM Investor Services International Limited was fined £6.47 million by the UK's Financial Conduct Authority (FCA) for inadequate anti-money laundering controls. 

The FCA highlighted the company's failure to conduct firm-wide money laundering risk assessments and to implement appropriate policies, despite prior warnings. The broker's global operations and client base, including politically exposed persons, posed high money laundering risks. 

ADM accepted the findings and implemented corrective measures. Despite no identified harm, the FCA imposed the fine, reduced by 30% due to ADM's cooperation. This incident underscores the FCA's commitment to enforcing stringent anti-money laundering regulations within financial services.

8. In Touch Games - £6.1 Million

Recent news reveals a £6.1 million fine for In Touch Games due to social responsibility and anti-money laundering failures, emphasising the Commission's commitment to enforcement. Regulatory actions aim to ensure compliance and accountability within the gambling industry.

Avoid Fines in 2024 with Red Flag Alert

Maintain compliance in 2024 and steer clear of the crippling fines handed out by regulators with Red Flag Alert. 

With fast, straightforward digital checks, and the most comprehensive AML compliance data, your business can onboard clients, monitor their risk profiles, and have a complete overview of the details in just a few clicks. 

Red Flag Alert’s fully digital platform offers a full suite of AML compliance and enhanced due diligence checks that take just 30 seconds of staff time to send, which is delivered to your client in a convenient fully branded digital check that they complete directly from their device. Our AI-powered software then analyses the results and delivers a full report in seconds, removing human error and reducing referrals to only 2%.

Once onboarded, Red Flag Alert's real-time data updates and comprehensive business intelligence enable businesses to monitor changes to customer risk profiles and react promptly. By integrating Red Flag Alert into workflows, you can demonstrate AML compliance, streamline regulatory audits, and provide regulators with comprehensive records, minimising the risk of customer abandonment and optimising business performance.

Take the proactive step today and start a free trial for Red Flag Alert to enhance compliance, creating the ultimate defence against long onboarding processes and hefty regulation fines.