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Written by Theodore L. Banks
On December 2014, a 57-page complaint filed by the U.S. Attorney in Manhattan sought to impose personal liability on the former compliance officer for MoneyGram International, Thomas Haider. It alleges that he willfully or recklessly failed to stop money laundering activities. The complaint seeks a fine of $1 million and would bar Haider from working in financial services. The case is unusual because, in 2012, the government negotiated a deferred prosecution agreement with MoneyGram. Actions against compliance officers are relatively rare, although prosecutions against the “responsible corporate officer” for illegal activity of a corporation are clearly part of a prosecutor’s enforcement toolbox. See, e.g., United States v. Park, 421 U.S. 658 (1975).
Regardless if the case represents a new trend in government enforcement, it does contain important lessons for all compliance officers:
What does this all say to compliance officers? If you are responsible for a compliance program, make sure it is working. The program design must be effective, and not just look good on paper to the uninitiated. If the program design is good, it must be implemented by the company, and not frustrated by inadequate resources or management evasion.
If you cannot design or implement an effective program, it is not enough to stay in the job as compliance officer just to “fight the good fight.” If the company won’t comply, and you know about it, it is time to leave. And for a lawyer, that may mean a “noisy withdrawal.”