A broad criminal probe by the U.S. government targeting employees at some 50 failed banks could also include top compliance officers, according to a Federal Deposit Insurance Corp. official.
Taking federal bailout money can come with a lot of strings attached: public relations strings, capital oversight strings and, surprisingly, anti-money laundering compliance strings.
U.S. investigators arrested the former chief executive officer of a Manhattan-based bank Monday for allegedly embezzling money from a fraudulent loan and attempting to cheat the government out of federal bailout funds.
The proposed governmental program allowing the purchase of toxic bank assets "presents an ideal opportunity" for criminals wishing to launder money, a U.S. watchdog agency said Tuesday.
Plans to have flailing financial institutions certify how they use bailout funds may leave the companies open to large fines under the False Claims Act, say legal experts.
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