NEW YORK (Reuters) - The New York branch of Mega Financial Holding, one of Taiwan’s biggest banks, has agreed to pay $180 million to New York state’s financial regulator for anti-money laundering violations that included lax attention to risk exposure in Panama, authorities said on Friday.
It is the first time in a decade that a Taiwan-based financial institution has been penalized by U.S. authorities, according to Taiwan’s Financial Supervisory Commission.
Mega International Commercial Bank of Taiwan, the New York branch, was “indifferent” to risks associated with transactions involving Panama, a high-risk area for money laundering, the New York State Department of Financial Services (NYDFS) said in a statement on Friday.
NYDFS said its investigation also found “a substantial number of customer entities” with accounts at several other Mega Bank branches, “that were apparently formed” with input from the Mossack Fonseca, the Panamanian law firm at the center of a massive leak of offshore financial data.
Governments across the world have begun investigating possible financial wrongdoing by the rich and powerful after the leak of more than 11.5 million documents from the firm, which specializes in setting up offshore companies.
Mossack Fonseca has said that its operations were legal.
Mega Bank, in a settlement with the New York regulator, has agreed to hire a consultant and monitor as steps toward beefing up the New York branch’s anti-money laundering compliance.
The NYDFS investigation found a number of suspicious transactions between Mega Bank’s New York and Panama branches, the regulator said.
The fine will affect Mega International Commercial Bank’s earnings this year, though at a manageable level, Mega Financial said in a statement.
Additional reporting by Faith Hung and Loh Liang-sa; Editing by Richard Balmforth and Tom Brown