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GGD-98-108, June 15, 1998 (33 pages). Money Laundering: FinCEN Needs to Better Manage Bank Secrecy Act Civil Penalty Cases. [Text] [PDF]

The Treasury Department's Financial Crimes Enforcement Network (FinCEN) receives civil penalty referrals for violations of the Bank Secrecy Act from several sources, including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and other federal banking regulatory agencies. The problem of lengthy processing times for civil penalty cases is growing worse. According to FinCEN data for 1985 through 1991, the average processing time to close a case was 1.77 years, and the most lengthy time was 6.44 years. In comparison, FinCEN data for 1992 through 1997 show an average processing time of 3.02 years; the most lengthy time was 10.14 years. For cases closed in the two most recent years--1996 and 1997--the average processing times were 3.57 years and 4.23 years, respectively. Lengthy processing can negatively affect the public's perception of the government's efforts to enforce the Bank Secrecy Act, undermining the law's credibility and deterrent effects. Another result is that the six-year statute of limitations for Bank Secrecy Act civil penalties could expire. FinCEN has issued neither a notice of proposed rulemaking nor a final regulation to delegate civil penalty assessment authority to the banking regulatory agencies. FinCEN's current strategic plan indicates that such delegation may not occur before 2002, making FinCEN responsible for processing civil penalty referrals for several more years. Therefore, GAO recommends that FinCEN set timeliness goals for evaluating and disposing of each civil penalty case and monitor the progress of managers and staff responsible for meeting these goals.