After being placed under a federal consent order in 2014 for its anti-money laundering reporting processes, Coral Gables-based Gibraltar Private Bank and Trust announced Wednesday that the order has been lifted.
The bank was placed under a consent order three years ago to ensure it had a compliant anti-money laundering program. The consent order focused on enhancing bank operations as they relate to monitoring client transactions, including those relating to the Bank Secrecy Act and anti-money laundering compliance issues.
Gibraltar was fined $4 million in 2016 by federal banking regulators for violations of the U.S. Bank Secrecy Act following two separate complaints.
Since 2012, Gibraltar has been working to develop more a money effective anti-money laundering program, bringing on new management that included highly respected local banker Adolfo Henriques as CEO.
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Gibraltar Private has emerged with industry best practices to manage liquidity, risk and compliance.
Adolfo Henriques, chairman of the board of Gibraltar Private Bank and Trust
Henriques, who now serves as chairman of the bank’s board, said via a release Wednesday that the lifting of the order was a result of Gibraltar’s focus to build “a strong risk management organization, create a culture of compliance and strengthen the balance sheet.”
“Gibraltar Private has emerged with industry best practices to manage liquidity, risk and compliance,” Henriques said.
The bank’s financial results on Dec. 31, 2016 marked its third year of positive earnings. Gibraltar reported net income of $1.1 million for the first quarter of 2017.
“I thank our clients for their trust and loyalty while we worked diligently to comply with all conditions of the Order,” said Angel Medina, who has served as president of Gibraltar since 2013 and was named CEO in 2016, in a statement. “We will continue to improve operating efficiencies through full utilization of technology, and we will continue our focus on enhancing the wealth and well-being of our clients and their families.”
Had the bank reported suspicious activity, it may have helped stop former Fort Lauderdale attorney Scott Rothstein, who conducted a $1.2 billion Ponzi scheme.
The bank first came under scrutiny in 2010 for failing to accurately report suspicious activity that corresponded with nearly $558 million in financial transactions from 2006 to 2009. Had the bank reported the activity, according to the U.S. government, it may have helped stop former Fort Lauderdale attorney Scott Rothstein, who conducted a $1.2 billion Ponzi scheme. He was ultimately sentenced to 50 years in federal prison.
The bank paid $7.5 million in settlement to victims of Rothstein’s Ponzi scheme. (Rothstein used Gibraltar and TD Bank to hold trust accounts for his clients.)
“We were a victim of Scott Rothstein in the same way that his clients were victims,” Medina said.
Local banking consultant Ken Thomas, president of Miami-based Community Development Fund Advisors, said he is surprised the consent order against Gibraltar was not lifted sooner. Banks in South Florida come under closer scrutiny over money laundering due to region’s connection to foreign wealth and its historical tie to the drug trade.
“This bank has really gone through a lot in changes in management,” Thomas said. “Where it is now, it is considered one of the premiere community banks. The fact is that we still have a strong community bank in the form of Gibraltar. That’s good news and it’s even better news that this is all behind it.”
This article was updated from a previous version to clarify the sequence of events.