Brickell Bank pays $1 million to settle federal anti-money laundering charges

Brickell Bank has agreed to pay $1 million to settle charges that it violated federal anti-money laundering rules, according to the U.S. Securities and Exchange Commission.

The SEC said that over about a decade Brickell Bank had failed to verify the identities of 23 non-US citizens while allowing them to buy and sell $23 million worth of securities. That put the bank, formerly known as Espirito Santo Bank, at risk of becoming a “conduit for money laundering or terrorist financing,” the SEC said.

“While no fraud occurred in this instance, our investigation found there were significant holes in the framework of the [the company’s anti-money laundering policies that] left the firm susceptible to illegal activity by customers who were not fully known,” Eric Bustillo, director of the SEC’s Miami regional office, said in a statement. “Firms must stick to the ... rules that require a broker-dealer to establish, document, and maintain procedures for identifying all customers and verifying their identities.”

G. Frederick Reinhardt, Brickell Bank’s chairman and CEO, said the bank voluntarily disclosed its misconduct and had fully coopered with the SEC’s investigation.

“We have made a clean sweep and a fresh start, and have agreed to an independent monitor for a period of two years,” Reinhardt said in a statement. “Our new team is dedicated to full compliance with all applicable laws, and is pleased to put this matter behind us.”

Brickell Bank has a two-star rating from Bauer Financial, meaning it is considered “troubled and problematic” by the private banking analysis company. It had been owned by the failed Portuguese financial institution Banco Espírito Santo and was later sold to Venezuela’s wealthy Benacerraf family for $10 million.

Miami is coming under heightened federal scrutiny for money laundering. Last month, the U.S. Treasury Department announced a crackdown on shell companies used to shield the identities of people who buy expensive homes in Miami-Dade County.

This story was originally published February 5, 2016 at 12:15 PM with the headline "Brickell Bank pays $1 million to settle federal anti-money laundering charges."