Brink’s Global Services USA (“BGS USA”), a global leader in secure logistics, found itself at the center of a significant regulatory investigation due to its failure to meet anti-money laundering (“AML”) obligations. Specifically, BGS USA was found to have violated several provisions of the Bank Secrecy Act (“BSA”), leading to actions by both the U.S. Department of Justice (“DOJ”) and the Financial Crimes Enforcement Network (“FinCEN”). These violations exposed significant gaps in the company’s AML framework, primarily related to its interactions with high-risk, unregistered foreign money services businesses (“MSB”s), often facilitating cross-border transactions.

In a notable enforcement action, FinCEN and the DOJ announced a resolution with BGS USA, resulting in a $37 million civil monetary penalty and a total payment of $42 million over three years. The 41-page consent order (the “Consent Order”) issued by FinCEN outlines multiple BSA violations and serves as a stark reminder of the legal and financial consequences of non-compliance with AML regulations. This enforcement action marks FinCEN’s first penalty against an armored car company and underscores the increasing scrutiny faced by financial services businesses involved in cross-border transactions and money transmission.

Background of Violations

According to the Consent Order, BGS USA facilitated the transmission of approximately $800 million, often in cross-border transactions, primarily between the U.S. and Mexico, for unregistered MSBs. Among these was a Mexican currency exchange later convicted for violations of the BSA. Despite its role in the secure transport of large sums for these high-risk entities, BGS USA failed to adhere to key regulatory requirements, including registering as an MSB and filing Suspicious Activity Reports (“SAR”s). This lack of compliance allowed illicit financial activities to thrive under its operational purview.

The Consent Order described these failures as willful violations, emphasizing that BGS USA’s management was primarily focused on maximizing revenue rather than ensuring regulatory compliance. Internal communications revealed a disregard for the compliance risks associated with these high-volume transactions. FinCEN’s Director, Andrea Gacki, underscored that these oversights exposed the U.S. financial system to the heightened risk of money laundering, including narcotics trafficking and other illicit financial activities.

DOJ Non-Prosecution Agreement

In the wake of these violations, BGS USA entered into a non-prosecution agreement (“NPA”) with the DOJ. The NPA allowed the company to avoid criminal prosecution, contingent upon its agreement to remediate its AML program and cooperate fully with the authorities.

Terms of the NPA

Under the terms of the NPA, BGS USA was required to take several significant actions:

  • Independent Compliance Monitor: BGS USA agreed to appoint an independent third-party monitor to assess the company’s AML compliance. The monitor’s role is to evaluate the effectiveness of BGS USA’s remedial actions, focusing on key areas such as transaction monitoring and suspicious activity detection.
  • Enhanced AML Training and Resources: BGS USA committed to improving its AML training for employees, ensuring that all personnel were sufficiently equipped to detect and address potential money laundering risks.
  • Ongoing Cooperation: The NPA required BGS USA to continue cooperating with both the DOJ and other relevant authorities, ensuring full transparency and providing access to documents and personnel as needed for further investigations.
  • Non-Prosecution Provision: As long as BGS USA adhered to the terms of the agreement and demonstrated full compliance with AML regulations, the DOJ agreed to refrain from pursuing criminal charges against the company. However, failure to meet the terms could result in the reinstatement of prosecution.

Implications of the NPA

The NPA offers BGS USA a path to avoid even more severe legal consequences while instituting necessary reforms. This resolution allows BGS USA to avoid a criminal conviction but requires it to make substantial changes to its compliance infrastructure. For the broader financial sector, the NPA reinforces the importance of proactive compliance efforts and serves as a reminder that corporate responsibility must take precedence over profit-seeking at the expense of regulatory obligations.

FinCEN Consent Order and Civil Penalty

Simultaneously, BGS USA was subject to a civil penalty issued by FinCEN, which marked a pivotal moment in AML enforcement. The civil penalty, totaling $37 million, is the first of its kind against an armored car company for failing to meet BSA requirements, particularly registration as an MSB.

Terms of the Consent Order

The Consent Order mandated several key actions:

  • Civil Monetary Penalty: BGS USA was assessed a civil penalty of $37 million due to its willful violations of the BSA. This penalty was a direct result of the company’s failure to register as an MSB and its lack of adequate AML controls.
  • Corrective Actions: BGS USA committed to significant remediation, including overhauling its AML compliance program. Specific requirements included enhancing governance structures, implementing stronger customer due diligence procedures, and increasing transparency in its reporting mechanisms.
  • Additional Payments and Settlement Terms: BGS USA agreed to a total settlement amount of $42 million over three years, with payments partially credited toward the DOJ forfeiture. This ensures that the company’s commitment to rectifying its deficiencies is financially incentivized and that the company’s violations are properly addressed.

Implications of the Consent Order

The $37 million civil penalty underscores the financial risks companies face when they fail to adhere to regulatory requirements, particularly in high-risk sectors like money transmission. The case highlights the critical need for businesses to maintain strong AML controls and to register with FinCEN if they operate in sectors where money laundering risks are elevated.

This enforcement action sends a strong message that non-compliance will result in significant financial penalties, especially for companies that facilitate cross-border transactions. The resolution of the case also places emphasis on the broader issue of cross-border financial crime, with BGS USA’s failure to monitor transactions for suspicious activities potentially facilitating narcotics trafficking and other illicit operations.

Given the Trump Administration’s recent actions to focus federal enforcement efforts on cross-border narcotics and organized crime, financial institutions should be especially vigilant in monitoring the cross-border movement of money for red flags associated with narcotics trafficking.

Remedial Measures and Future Compliance

In addition to the financial penalties, the settlement required BGS USA to implement several corrective measures to ensure future compliance with AML regulations:

  • Independent Evaluation: An independent third party will assess BGS USA’s senior management’s commitment to compliance and monitor the company’s progress in implementing an effective AML program.
  • Stronger Governance and Compliance Culture: BGS USA is required to strengthen its governance structure, establish policies that incentivize compliance, and introduce penalties for non-compliance. This includes the establishment of an internal ombudsman function to protect whistleblowers.
  • Comprehensive Training Programs: The company will enhance training for its employees, ensuring that they are up-to-date with the latest AML regulations and are equipped to identify and respond to suspicious activities effectively.

Broader Implications for the Financial Sector

The BGS USA case sets a significant precedent for the financial services industry, particularly for companies involved in money transmission and cross-border transactions. It highlights the critical importance of a robust compliance culture, particularly in high-risk sectors, and the need for continual assessment and improvement of compliance programs.

This case also exemplifies the potential reputational and financial risks associated with non-compliance. Companies must be proactive in identifying potential risks, maintaining strong internal controls, and ensuring that their employees are equipped to meet evolving regulatory standards.

Conclusion

The resolution of the BGS USA case emphasizes the importance of strict compliance with anti-money laundering laws and the severe consequences of failing to do so. The settlement, including the $37 million civil penalty and the broader $42 million financial settlement, sends a clear message to the industry about the need for comprehensive and ongoing efforts to prevent money laundering and related financial crimes. For companies in high-risk sectors, the BGS USA case highlights the necessity of robust AML programs, vigilant monitoring of cross-border transactions, and a culture of compliance embedded throughout the organization. The enforcement actions reflect the U.S. government’s commitment to strengthening the financial system’s defenses against money laundering and other illicit financial activities.

If you would like to remain updated on these issues, please click here to subscribe to Money Laundering Watch. Please click here to find out about Ballard Spahr’s Anti-Money Laundering Team.