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FinCEN issues first ever penalty for failing to comply with GTO order

By Mark Ford on April 13, 2022

The US treasury department’s Financial Crimes Enforcement Network (FinCEN) has for the first time ever fined a business in the Los Angeles Fashion District for failing to comply with a geographic targeting order (GTO).

A&S World Trading, operating under the name Fine Fragrance (A&S), has been fined US$275,000 for “wilful violations” of the Bank Secrecy Act (BSA) and its implementing regulations.

GTO background

In 2014 FinCEN issued a GTO that imposed additional reporting and recordkeeping obligations on certain trades and businesses located within the fashion district in Los Angeles.

The GTO is intended to enhance law enforcement’s ongoing efforts to identify and pursue cases against persons and businesses engaged in often trade-based money laundering (TBML) of US dollars to Mexico and Colombia on behalf of prominent drug trafficking organisations.

Case outline

As the operator of Fine Fragrance, a perfume store located within the GTO area, A&S was required to report currency transactions exceeding US$3,000 during the period from when the firm received a copy of the Los Angeles Fashion District GTO by certified mail in October 2014.

After receiving the GTO, A&S processed US$4,646,211 of sales in which it received currency. However, A&S failed to file any reports as required by the Los Angeles Fashion District GTO.

Admission

A&S admits that it failed to comply with the reporting and recordkeeping requirements of a GTO issued to certain nonfinancial trades and businesses located within the Los Angeles Fashion District.

Because of these violations, A&S failed to report more than US$2 million dollars in high-risk currency transactions.

The owner and chief executive officer of A&S prior to its dissolution, Antonio Campos, has assumed liability for the company’s penalty and agreed to pay the fine.

FinCEN’s Consent Order regarding A&S World Trading Incorporated provides full details of the case and can be found here.