When I see a story about a chief compliance officer going to jail it catches my attention. Judge John F. Walter in the Central District of California sentenced Humberto Sanchez, the compliance officer of G&A Check Cashing to 60 months in prison. Private fund managers rarely have to worry about check cashing and bags of cash. The case is a good reminder that cash transactions have specific limitations.
In this case, G&A Check Cashing was sending customers off with cash in excess of $10,000. Under the Bank Secrecy Act, financial institutions, including private funds, are required to file a Currency Transaction Report with the Department of Treasury for any transaction involving more than $10,000 in currency. As part of the Currency Transaction Report, the financial institution is required to verify and accurately record the name and address of the individual who conducted the currency transaction, the individual on whose behalf the transaction was conducted, as well as the amount and date of the transaction.
G&A was very bad and engaged in multiple transactions involving over $8 million, in which the firm did not file the required Currency Transaction Reports.
- Los Angeles Check Cashing Store, Its Head Manager and Compliance Officer Sentenced for Violating Anti-money Laundering Laws
- Los Angeles Check-Cashing Store, Manager, Compliance Officer Sentenced by Samuel Rubenfeld in WSJ.com’s Corruption Currents