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COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2009-114
FINDINGS OF FACT AND TEMPORARY
ORDER TO CEASE AND DESIST
In the Matter of
DOUBLES BUILDING SOCIETY, LLC
d/b/a SMALL FINANCIAL ORGANIZATION
Foreign Transmittal Agency License Nos.
FT5741 and FT6557
The Commissioner of Banks ("Commissioner") having determined that DOUBLES BUILDING SOCIETY, LLC d/b/a SMALL FINANCIAL ORGANIZATION, located at 1078 West Boylston Street, Suite 204, Worcester, Massachusetts, ("Doubles Building Society" or the "Company") has engaged, or is engaged in, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 169, and applicable regulations found at 209 CMR 44.00 et seq., hereby issues the following ORDER TO CEASE AND DESIST pursuant to General Laws chapter 169, section 13(b).
FINDINGS OF FACT
A. COMMINGLING FUNDS IN CLIENT TRUST ACCOUNTS
(1) All funds of clients deposited with a Licensee for transmittal to a foreign country shall be deposited in one or more trust accounts maintained at a federally insured bank. Said account(s) shall contain only those funds collected for transmittal. . . . (4) No person licensed as a foreign transmittal agency shall commingle money collected for transmission abroad from clients with its own funds or use any part of a client's money in the conduct of the Licensee's business.
B. ENGAGING IN FOREIGN TRANSMITTAL BUSINESS IN MASSACHUSETTS FROM UNLICENSED LOCATIONS
Each [foreign transmittal agency] license shall state the name and address of the licensee and the city or town of the place where such business is to be carried on. If a licensee intends to carry on a business at more than one location, such licensee shall procure a license for each location where such business shall be conducted.
A Licensee shall obtain a separate license under M.G.L. Chapter 169 and 209 CMR 44.00 in order to conduct business at another location.
C. Failure to Implement an Effective Anti-Money Laundering Program
(a) Each money services business . . . shall develop, implement and maintain an effective anti-money laundering program . . . . that is reasonably designed to prevent the money services business from being used to facilitate money laundering and the financing of terrorist activities.
(b) The program shall be commensurate with the risks posed by the location and size of, and the nature and volume of the financial services provided by, the money services business.
(c) The program shall be in writing, and a money services business shall make copies of the anti-money laundering program available for inspection to the Department of the Treasury upon request…"
(i) Policies, Procedures and Internal Controls
(ii) Designated Compliance Officer
[The money services business' anti-money laundering program shall] [d]esignate a person to assure day to day compliance with the program and this part. The responsibilities of such person shall include assuring that: (i) The money services business properly files reports, and creates and retains records, in accordance with applicable requirements of this part; (ii) The compliance program is updated as necessary to reflect current requirements of this part, and related guidance issued by the Department of the Treasury; and (iii) The money services business provides appropriate training and education in accordance with paragraph (d)(3) of this section.
(iii) Education and Training
[The money services business' anti-money laundering program shall] [p]rovide education and/or training of appropriate personnel concerning their responsibilities under the program, including training in the detection of suspicious transactions to the extent that the money services business is required to report such transactions under this part.
( iv) Independent Review
[The money services business' anti-money laundering program shall] [p]rovide for independent review to monitor and maintain an adequate program. The scope and frequency of the review shall be commensurate with the risk of the financial services provided by the money services business. Such review may be conducted by an officer or employee of the money services business so long as the reviewer is not the person designated in paragraph (d)(2) of this section.
D. Failure to register with the Department of Treasury
Except as provided in paragraph (a)(2) of this section, relating to agents, each money services business (whether or not licensed as a money services business by any State must register with the Department of the Treasury and, as part of that registration, maintain a list of its agents as required by 31 U.S.C. 5330 and this section…
A money services business must be registered for the initial registration period and each renewal period. The initial registration period is the two-calendar-year period beginning with the calendar year in which the money services business is first required to be registered…
[I]f a money service business experiences a more than 50-per cent increase in the number of its agents during any registration period, the money services business must be re-registered…
E. PRESENTING THE APPEARANCE THAT THE cOMPANY'S BUSINESS IS THAT OF A BANK
Prohibited practices that are grounds for license revocation under M.G.L Chapter 169 Section 12 and the issuance of a cease and desist order under M.G.L. Chapter 169 Section 13 shall include the act of, "(2) implying that it is a bank or to act in any manner so as to lead the public to believe that its business is that of a bank or otherwise violate the unauthorized banking provisions of M.G.L. Chapter 167 Section 37.
F. FAILURE TO PROPERLY MAINTAIN AND PROVIDE FOR INSPECTION OF BOOKS AND RECORDS
A licensee shall, when directed by the commissioner, permit the commissioner or his duly authorized representative to inspect its records and evidence of compliance with this chapter or any rule or regulation issued thereunder and with any other law, rule and regulation applicable to the conduct of its business. For the purposes of such inspection, the commissioner or his representative shall have access to the offices and place of business, books, accounts, papers, records and files of licensee.
Each Licensee shall keep and use within the Commonwealth its books, records and accounts in a manner which will allow the Commissioner to determine whether the Licensee is complying with the provisions of M.G.L. c. 169 and applicable state and federal laws and regulations.
G. FAILURE TO DISCLOSE THE TYPE AND NUMBER OF ITS LICENSE TO CLIENTS
Grounds for license revocation under M.G.L. c. 169, § 12 and the issuance of cease and desist orders under M.G.L. c. 169, § 13 shall include, but are not limited to, the following prohibited acts and practices by Licensees: . . .(3) failing to disclose the type and number of its license(s) to all clients in writing at the time deposits for transmittal abroad are accepted or to fail to disclose the type and number of its license(s) in all advertisements . .
Conclusions of Law
ORDER TO CEASE AND DESIST
After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.
Dated at Boston, Massachusetts, this 2nd day of July, 2009
By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts