By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2014-015
In the Matter of
HODAN GLOBAL MONEY SERVICES, INC.
Foreign Transmittal Agency License # FT947779
WHEREAS, HODAN GLOBAL MONEY SERVICES, INC., Minneapolis, Minnesota (Hodan or the Corporation), a licensed foreign transmittal agency under Massachusetts General Laws chapter 169 has been advised of its right to Notice and Hearing pursuant to General Laws chapter 169, section 13, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (Consent Agreement) with representatives of the Division of Banks (Division) dated February 4, 2015, whereby, solely for the purpose of settling this matter, and without admitting any allegations or implications of fact or the existence of any violation of state or federal laws and regulations governing the conduct and operation of a foreign transmittal agency, Hodan agrees to the issuance of this CONSENT ORDER (Order) by the Commissioner of Banks (Commissioner);
WHEREAS, on July 20, 2010 the Commissioner and Hodan entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER, Docket No. 2010-204 (2010 Consent Order) for the purpose of settling the matters raised during a 2010 Examination of Hodan’s books and records.
WHEREAS, an examination of Hodan was conducted pursuant to General Laws chapter 169, section 10, as of June 17, 2013 to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes, rules and regulations governing the conduct of those engaged in the business of a foreign transmittal agency in the Commonwealth;
WHEREAS, the Report of Examination (the Report) issued pursuant to the Division’s examination of Hodan alleged substantial non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of foreign transmittal agency in the Commonwealth;
WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report; and
WHEREAS, by mutual agreement of the Corporation and the Division, the 2010 Consent Order is hereby superseded and replaced by this Order.
NOW COME the parties in the above-captioned matter, the Division and Hodan, and stipulate and agree as follows:
- Hodan must establish, implement and maintain an effective overall compliance management system and anti-money laundering program with sufficient oversight by ownership and senior management, including but not limited to, adequate policies and procedures, internal monitoring, training and periodic independent testing.
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must enhance its current Anti-Money Laundering (AML) program to adequately address all the requirements set forth in the Financial Crimes Enforcement Network’s (FinCEN) regulation 31 CFR 1022.210(d)(1)(i), including but not limited to, customer identification requirements, report filing requirements and record keeping requirements.
- Within ninety (90) days of the Effective Date of this Order, Hodan Must engage a qualified compliance officer as required by FinCEN’s regulation 31 CFR 1022.210(d)(2). The compliance officer must ensure compliance with state and federal anti-money laundering and consumer protection requirements. It is the compliance officer’s responsibility to ensure that Hodan properly files reports, and creates and retains records and that the compliance program is updated to reflect current requirements, and to ensure that Hodan provides appropriate training and education to its staff and the staff of its agents to make certain all are knowledgeable of regulatory requirements. Hodan must obtain written approval from the Division before such engagement is initiated.
- Within thirty (30) days from the effective date of this Order, Hodan must submit the resume and qualification for its selected candidate or candidates to full this position.
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must enhance its training program to ensure all officers and agents receive proper training on applicable consumer protection and anti-money laundering requirements and must create a process to track and document such training.
- Within forty-five (45) days of the Effective Date of this Order, Hodan Must identify an independent consultant (Consultant) to conduct an independent review as required by FinCEN’s regulation 31 CFR 1022.210(d)(4). Hodan must obtain written approval from the Division before such engagement is initiated.
- The scope of the Consultant’s review must include, at a minimum, compliance with federal anti-money laundering requirements and the requirements for foreign transmittal companies under 209 CMR 44.00 et seq.
- Within ninety (90) days of the Division’s written approval of the Consultant, the Consultant must prepare and submit to the Division and Hodan simultaneously the final written report detailing the findings.
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must establish, implement and maintain a process for tracking and correcting deficiencies identified by its independent review conducted pursuant to FinCEN’s regulation 31 CFR 1022.210(d)(4).
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must conduct a review of Hodan’s foreign correspondent to ensure that it is operating in a safe and sound manner in compliance with consumer protection requirements and that it has an effective anti-money laundering program. The Corporation must submit to the Division documentation of this review within thirty (30) days of its completion.
- Hodan must amend its anti-money laundering program to include risk-based policies, procedures, and controls designed to identify and minimize money-laundering and terrorist financing risks associated with foreign agents and counterparties that facilitate the flow of funds into and out of the United States in accordance with 31 CFR 1022.210 and FinCEN’s Interpretive Release 2004-1.
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must develop and implement policies and procedures to ensure that all agent locations are in complete compliance with Massachusetts laws and regulations. Compliance with this Section requires that Hodan enhance its agent supervision program to ensure proper oversight of agent locations. The updated program must include detailed policies and procedures at the agent level, improved controls, increased monitoring, and an enhanced training program. The enhanced supervision program must include regularly scheduled compliance visitations to agent locations. Reviews and training conducted as part of the agent supervision program must address all applicable state and federal compliance requirements.
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must develop, implement and maintain procedures to ensure that all required reports are completed accurately and filed in a timely manner, including but not limited to, Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs).
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must develop, implement and maintain procedures to ensure that all required customer identification information is recorded accurately and maintained as required under 31 CFR 1022.312.
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must update Hodan’s website to disclose the foreign transmittal license number issued by the Division.
- Within thirty (30) days of Hodan’s receipt of the Report, the Corporation must submit to the Commissioner, a written response that addresses each of the matters requiring attention specified in the Report. Hodan must also adopt and implement any corrective actions discussed in the Report.
- Within ten (10) days of Hodan’s receipt of the Report, the Corporation will submit to the Commissioner a formal, written request to surrender its agent license at 90 Madison Street, #107, Worcester, Massachusetts; and an attestation stating when it ceased conducting business at that location.
- Hodan agrees to refrain from submitting any foreign transmittal agency license applications for any branch or agent office locations for a period of at least twelve (12) months from the effective date of this Order and until the Commissioner, in his sole discretion, determines that Hodan is in compliance with all provisions of this Order.
- By the thirtieth (30th) day after the end of each calendar quarter following the date of this Order, Hodan must furnish written progress reports to the Division, which must address and include the following:
- A description of the form, content, and manner of any actions taken to address each Section of this Order and the results thereof; and
- Written findings prepared by Hodan detailing a review of management’s and staff members’ adherence to the policies, programs, and procedures adopted pursuant to this Order and to applicable statutes, regulations, and rules, as well as a description of any operational changes implemented during such quarter which are intended to improve Hodan’s compliance condition in Massachusetts and the results thereof.
- A spreadsheet of all foreign transmittal transactions conducted by the Licensee originating at any Massachusetts location. The spreadsheet must include at minimum for each transaction:
- Massachusetts License number of location where
the foreign transmittal order originated
- Transaction date and time
- Transaction dollar amount in U.S. dollars
- Sender’s name, address, social security number or passport
identification number, and telephone number
- Receiver’s name, address, bank account
information, and telephone number
- Fee per transaction
- Notation whether the transaction was made by cash or check
- Massachusetts License number of location where
- A log of all CTRs and SARs filed over the quarter, including the dates of the transactions , subjects of the reports and the date the report was filed
- The reporting requirement to the Division referenced in Section 14 of this Order shall remain in effect and shall not be amended or rescinded without the prior written modification, termination, or suspension of the applicable provision of this Order from the Commissioner.
- The provisions of this Order shall not limit, estop, or otherwise prevent the Division, or any other state agency or department, from taking any other action affecting Hodan, its successors or assigns, if Hodan fails to fully and promptly comply with the above provisions.
- Nothing in this Order shall be construed as permitting Hodan to violate any law, rule, regulation, or regulatory bulletin to which the Corporation is subject.
- In consideration of the foregoing provisions of this Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Hodan’s foreign transmittal agency license under Massachusetts General Laws chapter 169, section 12, while this Order is in effect.
- Failure to comply with the terms of this Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory action pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
- This Order shall become effective immediately upon the date of its issuance.
- The provisions of this Order shall be binding upon Hodan, its officers and directors, their successors and assigns, and those persons in active participation with it, directly or indirectly, acting individually or through any corporate or other entity.
- In accordance with the terms of the Consent Agreement entered by Hodan and the Commissioner, Hodan has waived all rights of appeal that it may have relative to this Order or any of its provisions.
- The provisions of this Order shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Order shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
- This Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements, promises, representations, or warranties other than those set forth in this Order and the Consent Agreement.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS:
Dated at Boston, Massachusetts, this 4th day of February, 2015.
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts