McCLEAN, Va.–The anti-money laundering practices and compliance with laws and regulations at one of the nation’s largest credit unions have been featured in a national report, after employees said there are flaws in the CU’s program but the CU itself said all have been resolved.
The concerns centered around practices at the $24-billion Pentagon FCU (PenFed) in 2016 and 2017, and included “understaffing, gaps in reporting of potentially suspicious transactions to the government, insufficient monitoring of wire transfers, a lack of anti-money-laundering training for senior leaders and inadequate scrutiny of potentially high-risk customers,” reported the Wall Street Journal, which cited to internal PenFed emails and reports.
The documents do not contain evidence of alleged money laundering by PenFed members, according to the Journal. Instead, the Journal said they include emails and reports created by PenFed staffers who analyzed the adequacy of its anti-money-laundering operation and “were arguing for a higher budget, given the credit union’s rapid growth.”
‘False Allegations’
The Journal said PenFed’s chief audit executive, Russell Lau, issued a statement in response that said, “These false allegations against PenFed were properly reviewed by the appropriate third party authorities that have unfettered access to ALL relevant information, and were determined to be unfounded.”
PenFed General Counsel Scott Lind told the Journal the credit union’s anti-money-laundering program “fully complies with all government regulations.”
Lind told the Journal that in the time since its employees raised concerns, PenFed has made changes to the program that include reorganizing management, hiring more staff, adopting new policies and investing in suspicious-activity detection technology.
The PenFed employees’ concerns were reported in 2017 to the NCUA, according to the Journal.