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The New York State Banking Department issued a Settlement Agreement to BHS (New York) Corporation, a Licensed Money Transmitter, Pursuant to Article XIII-B of the New York Banking Law.


In the Matter of                             

BHS (NEW YORK) CORPORATION

A Transmitter of Money Licensed Pursuant To Article XIII-B of the New York Banking Law

                        - Respondent -


SETTLEMENT AGREEMENT

WHEREAS, BHS (New York) Corporation ("BHS-NY" or the "Licensee"), with corporate headquarters at 261 Fifth Avenue, New York, New York 10016, was granted a license on August 5, 1993 to engage in business as a licensed transmitter of money pursuant to Article XIII-B of the New York Banking Law (the "Banking Law") by the Superintendent of Banks (the "Superintendent") of the State of New York and

WHEREAS, as the examination by the New York State Banking Department (The "Banking Department") of BHS-NY as of June 30, 2004, with a subsequent visitation on February 11, 2005, cited that the Licensee failed to adopt and implement effective policies and procedures. Specifically noted was non-compliance with the Currency and Foreign Transactions Reporting Act, 31 U.S.C. 5311 {the Bank Secrecy Act ("BSA"), as amended by the USA PATRIOT Act, and the rules and regulations issued thereunder by the U. S. Department of Treasury, and the suspicious activity reporting requirements of the Banking Department (3 N.Y.C.R.R. Part 300); and certain other statues and/or regulations among them, which includes

  1. an effective anti-money laundering ("AML")/Bank Secrecy Act program with a qualified, independent compliance officer;
  2. independent testing of the BSA compliance program;
  3. correct and accurate filing of Currency Transaction Reports ("CTRs") and Suspicious Activity Reports ("SARs");
  4. ongoing employee training program that documents all relevant aspects of training provided and the names of participating employees.

WHEREAS, it was noted that the Licensee failed to adopt and implement effective internal controls, policies and procedures, to ensure the operation of the Licensee in a safe and sound manner, which includes

  1. the Licensee's failure to have a comprehensive operations manual approved by the Board of Directors.
  2. the Licensee's misrepresentation by displaying the name of their parent bank on public signage, correspondence, and other identification.
  3. the lack of an IT audit of the Licensee.
  4. the lack of a written contingency plan in place.

WHEREAS, the Superintendent and the Licensee mutually agree to resolve such Violations by the imposition of a fine in the aggregate amount of $25,000 in lieu of commencing a hearing seeking revocation of the license of BHS-NY.

NOW, THEREFORE, IT IS STIPULATED AND AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:

THAT, the Licensee agrees as follows:

  1. BHS-NY will take the following necessary steps to assure that it is in compliance with all applicable laws, rules and regulations:
  1. Remove any and all public signage and/or references to their parent bank.
  2. Provide for independent testing of the BSA compliance program with a completed report submitted to the Department for review
  3. Establish and maintain an effective AML/BSA program under the management and supervision of a qualified compliance officer having an independent reporting line to senior management and the Board of Directors.
  4. Develop and submit to the Department, for review, written BSA procedures to provide for the accurate and timely preparation and filing of SARs and CTRs.
  5. Establish and maintain an ongoing AML/BSA training program for all relevant employees with proper records maintained to document the subjects covered.
  6. Develop and submit to the Department, for review, a comprehensive operations manual.
  7. Perform and submit to the Department, for review, a completed IT audit and a complete testing of the Licensee's disaster recovery/contingency plan.
  1. No later than ninety (90) days from the date of execution of this Settlement Agreement, BHS-NY shall submit to the Banking Department results of its actions to correct the violations noted above.
  2. BHS-NY agrees to pay a fine in the aggregate amount of $25,000 to the Superintendent. Payment shall be made by electronic transfer, in immediately available funds, pursuant to transfer instructions received from the Banking Department. Failure to make timely payment shall result in the Banking Department commencing a hearing to revoke the licensee's licenses.
  3. All communications regarding this Settlement Agreement shall be sent to:


Regina Stone
Deputy Superintendent of Banks
Licensed Financial Services Division
New York State Banking Department
One State Street
New York, New York 10004

Ibrahima Diene, Vice President
BHS (New York) Corporation
261 Fifth Avenue
New York, New York 10016

  1. The provisions of this Settlement Agreement shall not bar, estop or otherwise prevent the Superintendent, or any state or federal agency or department, from taking any other action affecting the Licensee, any of its current or former officers, directors, employees, or insiders, or their successors or assigns with respect to the matters not relating to this Settlement Agreement or any criminal aspect of the concerned matters in this Settlement Agreement.
  2. No extension or waiver of the terms of this Settlement Agreement shall be binding on the Banking Department except if in writing, signed by the Superintendent.
  3. Each provision of this Settlement Agreement shall remain effective and enforceable until stayed, modified, terminated or suspended in writing by the Superintendent.
  4. The effective date of this Settlement Agreement is the date on which it is executed by the Superintendent or her Deputy.
  5. The provisions of this Settlement Agreement are not confidential.

Agreed to and Accepted:

Dated:__________________.  By: ___________________________
Regina Stone
Deputy Superintendent of Banks
New York State Banking Department
Dated:__________________. By: ___________________________
Ibrahime Diene
Vice President
BHS (New York) Corporation

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