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The Miami and New York foreign branches of Banco de Chile were fined $3 million by federal regulators Wednesday for violating U.S. anti-money laundering laws in their dealings with clients, including former Chilean President Augusto Pinochet and his family. The announcement by the Financial Crimes Enforcement Network, the Treasury Department’s SWAT team, also cited a second $3 million penalty to be imposed by the Office of the Comptroller of the Currency. “The penalty assessment is concurrent with the $3 million penalty also assessed against the New York branch of Banco de Chile by the Office of the Comptroller of the Currency,” according to the order. “The penalties will be satisfied by a single payment of $3 million to the Department of the Treasury.” Banco de Chile agreed to pay the fine within five days without admitting or denying any wrongdoing, the agency said. The enforcement action covered bank activity from November 1997 to September 2004. Calls to Banco de Chile’s Miami and New York offices were not returned. The comptroller had not announced any action by late Wednesday afternoon, and a call to the Washington agency was not returned by deadline. The FinCEN order concluded that Banco de Chile’s Miami and New York offices allowed political figures and their associates to move millions of dollars through the institution’s U.S. branches from at least November 1997 and September 2004. The order is signed by FinCEN Director William J. Fox. The order criticized the Miami foreign branch for condoning an “insufficient compliance environment” that failed to accurately identify and monitor accounts that were obviously controlled by politicians and their associates. “A review of the applicable account files and transaction records determined that management at Banco de Chile-Miami was aware, or should have been aware, that accounts were opened by a nominee and associate of a politically exposed person and ultimately owned and controlled by the prominent politically exposed person,” according to the order. FinCEN spokeswoman Anne Marie Kelly declined comment, saying, “The document speaks for itself.” Banco de Chile is one of four current and former Miami banks with ties to Pinochet, who ruled Chile after the overthrow of socialist President Salvador Allende in 1973. U.S. banking regulators slapped cease-and-desist orders on the two Banco de Chile branches earlier this year. The Miami office was disciplined by its U.S. regulator, the Federal Reserve, and the New York office by the OCC. The Miami branch was hit by the Federal Reserve order in February. The Fed found the bank violated the USA Patriot Act in allowing foreign political figures to open or control accounts at the institution and “significant deficiencies” with the bank’s anti-laundering program. The problems revolved around customer due diligence, reporting suspicious activity and risk management associated with customer accounts. Banco de Chile and three other Miami banks were forced in August to turn over client documents and make employees available for questioning in a Chilean investigation into “fraud, corruption, kickbacks and conspiracy” allegations against Pinochet. The other Miami banks are Espirito Santo Bank; PNC Corp., which in May bought the troubled Riggs International Banking Corp.; and Banco Santander International, which in 2003 bought Coutts & Co. Pinochet, who seemed legally untouchable for years, has lost immunity in a Chilean investigation of a cover-up of more than 100 deaths of political opponents in 1975. More than 3,000 dissidents perished during Pinochet’s presidency, which lasted until 1990.

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