A federal judge in Baltimore has ordered M&T Bank Corp. to forfeit to the U.S. government $560,000 in drug proceeds laundered through the bank and for which M&T did not file currency transaction reports.
U.S. District Judge James K. Bredar’s order on Tuesday followed a former M&T head teller’s plea of guilty last year to having failed to file the federally mandated currency reports.
Federal prosecutors had alleged that teller Sabrina Nicole Fitts participated in the money-laundering conspiracy by receiving a total of $560,000 cash in small denominations from Deanna Bailey, who was involved in the illegal-drug trade, and returning that amount to her in $100 bills.
Bailey paid Fitts, then head teller at M&T’s Perry Hall branch, a total of $5,000 for performing at least eight such transactions — each of which involved at least $25,000 — without filing currency transaction reports, the government alleged.
Federal law requires banks to file reports for transactions involving more than $10,000.
In December, Bredar sentenced Fitts to one month in prison and 250 hours of community service. He also ordered her to forfeit the $5,000 she received from Bailey.
Buffalo, N.Y.-based M&T was not accused of criminal wrongdoing.
“Through the cooperation we provided to law enforcement during an investigation into the illegal activities perpetrated by a former employee, we have assisted the U.S. attorney’s office with the prosecution and recovery,” M&T said in a statement Wednesday. “This case shows how banks work closely with law enforcement to prevent and detect money-laundering.”
Maryland U.S. Attorney Rod J. Rosenstein said Wednesday that he hopes Bredar’s order sends a message to banks to keep closer watch on their employees who conduct financial transactions.
“As a legal matter, the bank is responsible for the acts of its employees,” said Rosenstein, whose office brought the civil forfeiture action. “It’s not a defense to say that you had a corrupt employee. You had a responsibility to oversee that employee.”
Rosenstein filed suit against “$560,000 in U.S. Currency” on Feb. 10, alleging that M&T was in possession of the allegedly ill-gotten gains. Rosenstein sought a civil order of forfeiture and notified the bank of his filing in February, according to court records.
When M&T failed to respond, Rosenstein on May 27 sought a default judgment, which Bredar granted in his order that the bank forfeit the money.
Fitts, in pleading guilty, said she never filed or had anyone else at the bank file a currency transaction report for any of the transactions with Bailey, which occurred between 2011 and April 18, 2013, according to Rosenstein’s office.
Bailey pleaded guilty to conspiracy to commit money laundering. Bredar sentenced her in March to 46 months in prison and two years of supervised release. He also ordered her to forfeit $500,000 in ill-gotten gains.