The US Metropolitan Commercial Bank (MCB) was fined millions of dollars by the Federal Reserve and the New York Department of Financial Services for violating the Bank Secrecy Act.
The agencies claim MCB shall pay fines worth $29.5 million for allowing criminals to gain access to new open accounts, which then misdirected the flow of $300 million.
In 2022, the MCB issued the MovoCash digital prepaid Visa card program to bad actors as it had failed to use proper verification procedures to discover the true identity of applicants. The thieves provided false identifying information and used their accounts to defraud millions in direct deposit payroll payments and government benefits, according to the DFS.
Moreover, the Federal Reserve Board is now requiring MCB to improve its customer identification, customer due diligence, and third-party risk management programs.