New York man pleads guilty to charges under bank secrecy act

He facilitated more than $1B in high-risk transactions without anti-money laundering compliance

September 15, 2022 Brooklyn Eagle Staff

The U.S. District Court for the Eastern District of New York, more informally known as Brooklyn Federal Court, in Downtown Brooklyn. Photo: Rob Abruzzese

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On Tuesday in Brooklyn federal court, a man pleaded guilty to charges under the Bank Secrecy Act for failing to maintain an effective anti-money laundering program. Hanan Ofer, 69, had created a scheme that imbued high-risk “international financial business” into a small credit union while he operated the New York State Employees Federal Credit Union Services Organization (NYSEFCU-CUSO) from 2014 to 2016, according to court filings.

The plea hearing took place before U.S. Magistrate Judge Ramon E. Reyes, Jr. Ofer faces up to 10 years in prison when sentenced.

“Ofer willfully disregarded provisions of the Bank Secrecy Act that are designed to prevent money laundering and the use of our financial system for criminal ends. This office will vigorously enforce those laws to ensure the integrity of the U.S. financial system,” said United States Attorney Breon Peace.

Ofer brought in over $1 billion in high-risk transactions, which included millions in bulk cash transactions from a Mexican bank to the NYSEFCU. He represented to the credit union and the NYSEFCU-CUSO that proper anti-money laundering oversight would be conducted.

Ofer failed to create effective anti-money laundering infrastructure at the NYSEFCU-CUSO, causing the NYSEFCU to process the high-risk transactions without proper notice via a legally required Suspicious Activity Report.

Eastern District of New York U.S. Attorney Breon Peace speaks at a news conference at the Justice Department in Washington, Wednesday, March 16, 2022. AP Photo/Andrew Harnik

Breon Peace, U.S. Attorney for the Eastern District of New York, Kenneth Polite Jr., Assistant Attorney General of the Justice Department’s Criminal Division, and Rick J. Patel, Acting Special Agent-in-Charge, Homeland Security Investigations, announced the guilty plea on Tuesday.

“Ofer’s failure to implement anti-money laundering practices as required by the Bank Secrecy Act (BSA) exposed Financial Institutions to the likelihood of high-risk transactions which ultimately led to the processing of billions in bulk cash from Mexican-based banks without proper oversight,” said Special Agent-in-Charge Patel last Tuesday. “Money laundering is a vital component of transnational criminal organizations wishing to legitimize their ill-gotten gains and ensuring the compliance of BSA regulations is the first step to fighting these organizations. HSI is a leader in financial crimes investigations and will continue to seek the prosecution of those who attempt to circumvent the law for quick financial gains.”

“With his admissions today, the defendant will be held responsible for exposing financial institutions to the risk of illicit activity” said U.S. Attorney Peace.