Auckland Company ordered to pay $5.3 million in penalties over anti-money laundering breaches.

A money transfer company which "failed abysmally" to comply with anti-money laundering legislation has been ordered to pay penalties of more than $5 million.
 
The Department of Internal Affairs (DIA) took action against Auckland's Ping An Finance and its sole director Xiaolan Xiao to the High Court, alleging the company failed to take steps required in 1588 transactions involving more than $100m in 2014.
 
Neither the company, nor Xiao, contested the proceeding.
 
The Anti-Money Laundering and Countering Financing of Terrorism Act, which came into force in 2013, creates substantial requirements for companies to record and report transactions and customer details, in a bid to detect and deter money laundering and the financing of terrorism.
 
Ping An, a remittance and money transfer company which operated from office on Queen St in Auckland, has been found to have failed to meet the requirements of the legislation.
 
"What I regard as serious, systemic deficiencies in complying with a multiplicity of obligations under the Act resulted in widespread contraventions across several key areas which were not isolated or infrequent," Justice Christopher Toogood wrote in his judgement.
 
Justice Toogood said Xiao, a Chinese-born New Zealand citizen, had misled DIA in its investigation and "demonstrated a complete disregard" of the requirements.
 
The judgment found Xiao failed to keep appropriate records for 1588 transactions totalling $105,413,026.44, failed to record the identity of 362 customers.
 
Justice Toogood said the transactions raised by DIA showed signs of suspicious activity, including unnecessary multiple transactions used to pay or receive funds in a single day, very large transactions and "significant" cash deposits.
 
"Ping An failed to submit a single suspicious transaction report in respect of any of the 1588 transactions it conducted during the relevant period," Justice Toogood wrote.
 
"It is not difficult to infer that the company's non-compliance amounted to a calculated and contemptuous disregard for the [legislation's] requirements, and that non-compliance was a cultural norm within the business."
 
Justice Toogood said the penalties he imposed "must be so significant as to deter and denounce non-compliance" and recognise Parliament's intention tougher penalties should be awarded than under previous legislation.
 
As well as ordering pecuniary penalties of $5.29m, Justice Toogood granted injunctions preventing Ping An and Xiao from carrying out any financial activities as defined by the legislation.
 
When it announced it had taken the action, DIA said it was not alleging that Ping An was involved in money laundering or the financing of terrorism, but failed to meet the legislative requirements. (via Stuff).