Eagle Bancorp in Bethesda, Md., will pay more than $9.7 million to resolve a Justice Department investigation into violations of the Bank Secrecy Act.
The DoJ said in a press release that Eagle entered into a non-prosecution agreement to address the matter.
“For more than a decade, EagleBank knowingly allowed favored clients to operate a check kiting scheme, even as compliance personnel repeatedly tried to stop it,” Assistant Attorney General Tysen Duva said in the release. “Financial institutions are the first line of defense against financial crimes and must be gatekeepers, not gateways, for criminal activity. As this resolution makes clear, when banks deliberately allow unlawful conduct to persist, the Criminal Division will ensure they are held accountable.”
Eagle admitted in the agreement that, between 2010 and 2021, it willfully failed to establish an anti-money laundering and countering the financing of terrorism program. The bank also acknowledged that it let two customers operate a check kiting scheme for more than a decade. One of the customers was a friend and business partner of Ron Paul, the bank’s former chairman and CEO.
Paul resigned in 2019.
Eagle will pay a roughly $9.1 million fine and agreed to forfeiture of nearly $740,000. The bank also agreed to take additional measures to strengthen its AML/CFT program.
The FBI investigated the case.