Banks Fails To Conduct Due Diligence On Fraudulent Customer

This case involves plaintiffs who sought to recover damages allegedly caused by a correspondent bank’s failure to act in response to a multi-billion dollar fraud. Its customer, an international banking company, sold certificates of deposit to individuals. Funds were illegally diverted and used to fund the lifestyles of top executives. It was alleged that the correspondent bank did not conduct appropriate anti-money laundering due diligence for nearly 10 years. An expert in correspondent banking was sought to opine on the standards of a reasonable bank, namely the circumstances in which due diligence would be applied.

Question(s) For Expert Witness

1. Please describe your experience in correspondent banking.

2. In what circumstances would you flag your colleagues regarding an account?

3. What are your responsibilities evaluating/knowing a client's financial statements or promised rates of returns?

Expert Witness Response E-202800

In 1973, I began working at the largest international bank in Canada where I held many different positions for 30+ years. In 1991, I became senior manager of financial institutions and worked my way up to vice president of global transaction banking until I became a consultant in 2008. I've dealt with client relations, management, correspondent banking services, operations, compliance, AML, and risk management along with many other facets. I managed both teams on a global scale. I would be able to speak about client relationships, when red flags should go off for correspondent banking directors, and when AML is brought in to assess a situation.