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Eagle National Bank on Thursday became the fifth South Florida-based financial institution in nine months to be publicly reprimanded by federal banking regulators for violating anti-money-laundering laws. The regulators honed in on accounts opened at the bank by foreign political figures and their families, friends and associates that may involve “money-laundering, the proceeds of foreign corruption, terrorist financing or other suspicious activity.” Regulators also took issue with Eagle for exceeding lending limits, incomplete record-keeping and not filing suspicious activity reports when necessary. “This is probably a 7 on the Richter scale of enforcement actions,” Miami banking consultant Ken Thomas said Thursday. “They did not remove anyone and they can do whatever they want, they are the regulators.” The Doral, Fla.-based bank entered into a 15-point consent order with the Office of the Comptroller of the Currency, agreeing to adopt recommendations that would shore up compliance with the Bank Secrecy Act. Regulators also took the unusual step of reprimanding Eagle for allowing the bank’s largest owner, Colombian businessman Jaime Gilinski and his family, to use the 48-year-old federally chartered bank for personal use with lax oversight from directors. Gilinski is a veteran banker who is reported to have substantial holdings in Colombia and around the world. Gilinski, who is not a bank director but is chairman of the Eagle National’s holding company, lives in London and could not be reached for comment. Eagle National Bank chairman Michael Spritzer said the bank lent to Gilinski and his associates using standard underwriting guidelines, and accepted Gilinski’s personal guarantee as collateral. “The bank is prohibited from entering into any new business transactions with Jaime Gilinski, his spouse, children, parents or siblings, any persons who act in Jaime Gilinki’s behalf, and any of Jaime Gilinski’s or foregoing persons’ related interest,” according to the order. Eagle president and CEO Robert Brookes contends his bank entered into the order voluntarily and is not required to conduct a forensic audit, pay a fine, inject capital or impose a moratorium on paying dividends as some banks have recently had to do. Brookes said banks are faced with heightened scrutiny in the post-Sept. 11 world as the regulators try to bring every institution in compliance with anti-money-laundering measures. “What this does is add a layer of consciousness and awareness on the part of our directors, on the part of our holding company, on the part of our management and staff, about how important and critical BSA compliance is,” Brookes said. The consent order comes just as Eagle was preparing to move past troubles of the late 1990s attributable to problem loans in Latin America. Brookes was hired in 1999 from SunTrust Bank to turn around the institution. Before him, the bank went through two chief executives in six years. “They [regulators] did not indicate to us that they felt this would have put the bank in jeopardy,” said Spritzer, a partner in the Pinecrest accounting firm Berenfeld Spritzer Shechter & Sheer. “At no time did they believe the financial strength of the bank was at risk or suffered.” Eagle entered into the consent order on Dec. 21 without admitting or denying any wrongdoing. The order was signed by Brookes and the bank’s five other directors, including Spritzer. The consent order resulted from an exam that began July 6. Jeri Gilland, the deputy comptroller for the Southern District for the OCC, initiated the order. OCC spokesman Dean DeBuck said the agency does not comment on consent orders as a matter of policy. After resolving problems related to its Latin American loans, the $273 million (assets) bank planned to triple its asset size to $1 billion and at least double the number of South Florida locations to 10. But they will likely have to wait, as Eagle must obtain comptroller approval for virtually anything it does and consent orders typically last years. “The No. 1 objective of this bank has got to be full, complete and prompt compliance with this cease and desist order more than anything else,” Thomas said. “Any issue of corporate expansion or other aspects of the business plan will have to be put on the backburner.” The order lays out a timetable covering what Eagle must do over the next 90 days. The bank must: � Create a compliance committee by Jan. 21 with at least three directors made up of no more than one employee or immediate family member of the bank’s ownership. The committee must meet at least monthly and submit a monthly progress report. � Appoint a “capable” compliance officer by Feb. 4 who has “sufficient authority” to monitor and ensure adherence to the Bank Secrecy Act and the rules of the Office of Foreign Assets Control including Currency Transaction Reports and Suspicious Activity Reports. The new officer is to report directly to the board, and must be independent of the bank’s management, according to the order. � Review its accounts by Feb. 19 to determine those held by “senior foreign political figures” or their immediate family, close associates or related corporations. These figures are defined as senior officials in the executive, legislative, administrative, military or judicial branches of a foreign government. � Develop, implement and adhere to written procedures to comply with the Bank Secrecy Act by March 21. The procedures must deal with controls pertaining to the opening of accounts, the monitoring of suspicious activities and conducting internal and independent auditing. The order requires that Eagle create “comprehensive procedures to identify and report to appropriate management personnel frequent or large volume cash deposits or wire transfers or book entry transfers to or from offshore or domestic entities or individuals.” The procedures also deal with bank accounts opened in the name of money exchange houses or other financial institutions including currency dealers, telegraph companies and casinos, according to the order. Eagle has agreed to conduct intense scrutiny of all identified accounts and report transactions that may involve “money-laundering, the proceeds of foreign corruption, terrorist financing or other suspicious activity,” according to the order. Regulators also want Eagle to establish guidelines and procedures for dealing with the “shipment and receipt of currency or monetary instruments via common couriers.” The guidelines must address how to handle improperly labeled courier pouches that contain monetary instruments, according to the order. The bank has to develop and implement a written program for filing so-called “suspicious activity reports.” As part of the agreement, the bank must obtain approval from the comptroller before installing any software or database application. The bank is required to identify an officer who will be responsible for filing currency transaction reports. Regulators also want the bank to conduct a review of all accounts since January 2002 to determine if there was any suspicious activity, and then file appropriate reports if necessary. The report must then be forwarded to the OCC. Since April, regulators have issued disciplinary actions against the Coral Gables-based institutions BAC Florida Bank and International Bank of Miami, Pembroke Pines-based Horizon Bank and Miami Beach-based Beach Bank.

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