Shady Dealings in Bayonne

There had been some shady dealings going on at Pamrapo Savings Bank, based up in Bayonne, over the past couple of years. The bank pleaded guilty in court on Monday to violating the Bank Secrecy Act and agreed to pay a $5 million fine for activities that happened between 2005 and 2007.

Here's what happened: Ordinarily, a bank is required to report any transaction of more than $10,000 to the authorities, in order to ferret our drug dealers, money launderers, etc. In one instance, a Pamrapo customer sought to evade these limits by writing out a whole bunch of checks for just under that amount. In this case, there were a whopping 586 such checks, totalling $3.2 million - an average of more than $5,000 per check. They were all made out to cash and all cashed at Pamrapo branches.

And that wasn't the only violation; all told, there was approximately $35 million in suspicious transactions filed through Pamrapo. That $10,000 limit is fairly well known, but any sort of activity of that scope is supposed to at least trigger a suspicious activity report. It's not clear whether Pamrapo was in cahoots with these money launderers, or whether, as they claimed, they just felt that a good compliance program was too expensive to maintain. At any rate, it probably would have cost them less than that $5 million fine.