Former credit union BSA officer fined $100K for multiple BSA violations

FinCEN on January 31, 2024, issued a Consent Order imposing a $100,000 civil money penalty on Gyanendra Kumar Asre, formerly the BSA Officer for New York Federal Employees Federal Credit Union (NYSEFCU), for violations of the Bank Secrecy Act (BSA) and its implementing regulations. Asre admits only to the facts admitted coincident to his guilty plea with the United States Department of Justice (DOJ) and neither admits nor denies the remainder of the facts set forth in the order.

Asre is a citizen of the United States. Before joining NYSEFCU, Asre had approximately 25 years of experience in the financial industry, particularly in wholesale currency trading, including nine years as the Senior Vice President and Regional Head of Wholesale Currency Trading at a large multinational bank. Asre represented to NYSEFCU as part of his pitch to join the Credit Union’s Supervisory Board that he possessed “[e]xtensive hands on expertise in know your client due diligence, documentation, transaction monitoring and AML risk management, including proficiency in Anti Money Laundering and Bank Secrecy Act.” Asre claimed to have completed a “Certified Compliance and Regulatory Professional Program” and obtained numerous anti-money laundering or financial crimes certifications from private organizations in December 2014 and January 2015.

Asre joined NYSEFCU in early 2014 as a credit union member. In November 2014, Asre volunteered to serve as a member of the Credit Union’s Supervisory Committee, established by the Board of Directors. A few months later, NYSEFCU appointed him to the role of BSA Compliance Officer, a volunteer position he held from March 25, 2015, until April 2, 2016.

NYSEFCU was a single branch, not-for-profit, federal credit union located in New York, New York and managed by a volunteer board. Since its original charter in 1935 until April 2014—when Asre joined the Credit Union and caused it to apply for its first ever field of membership expansion—NYSEFCU operated as a “cashless” low-income credit union under single bond common field of membership serving about 1,100 state employees who worked in New York City. Prior to Asre’s tenure, in its almost 80 years of operation, NYSEFCU had never serviced any business accounts.

In early 2016, the NCUA identified significant deficiencies in NYSEFCU’s compliance with the BSA and its implementing regulations, particularly regarding the entities that Asre brought in as customers. As a result, the NCUA demanded that the Credit Union cease providing services to those entities by June 17, 2016, and required the Credit Union to hire an independent qualified auditor to determine the adequacy of the Credit Union’s AML program. The auditor found systemic inadequacies in the Credit Union’s compliance programs. As a result, in October 2017, the NCUA liquidated NYSEFCU. Asre’s actions and the resulting BSA violations were a major contributing factor to the dissolution of NYSEFCU.

Asre's actions while at NYSEFCU are detailed in the Order are detailed in the Order. FinCEN determined that Asre is liable for the following BSA violations:

1. Willfully failing to register DDH Group LLC as an MSB with FinCEN, in violation of 31 U.S.C. § 5330 and 31 C.F.R. § 1022.380 from October 21, 2015, to November 14, 2016 (Asre was chairman and CEO of DDH Group LLC while serving as the NYSEFCU BSA officer);
2. Willfully participating in NYSEFCU’s failure to implement and maintain an effective AML program for in violation of 31 U.S.C. § 5318(h)(1) and 31 C.F.R. § 1020.210 from September 1, 2015, to April 2, 2016; and
3. Willfully participating in NYSEFCU’s failure to file SARs, in violation of 31 U.S.C. § 5318(g) and 31 C.F.R. § 1020.320 from September 1, 2015, to April 2, 2016.

In addition to imposing the $100,000 civil money penalty, FinCEN's order includes a "remedial undertaking" under which Asre agrees to not participate, directly or indirectly, in the conduct of the affairs of any “financial institution,” as the term is defined in the BSA that is located within the United States or does business in the United States, for a period of five years following the execution of the order.