Source: https://www.mass.gov/order/century-union-services-llc-dba-century-union
Timestamp: 2019-04-24 00:26:11+00:00

Document:
Foreign Transmittal Agency License No: FT 907743 et al.
The Division brings this action under Massachusetts General Laws chapter 169, section 12 to revoke CENTURY UNION SERVICES, LLC d/b/a CENTURY UNION (Century Union or the Company) foreign transmittal agency license FT907743 et al., and to obtain other equitable relief as may be necessary due to Century Union’s failure to comply with the provisions of Massachusetts General Laws chapter 169 and the Company’s failure to maintain and exercise the financial responsibility, character, reputation, integrity and general fitness to command the confidence of the public and to warrant the belief that its business will be operated lawfully, honestly and fairly, in violation of Massachusetts General Laws, chapter 169, sections 2, 3 and 10 and the Division’s regulation 209 CMR 45.00 et seq.
The Division is an agency of the Commonwealth of Massachusetts with jurisdiction over matters relating to the licensing and regulation of those persons and entities engaged in the business of a foreign transmittal agency pursuant to Massachusetts General Laws chapter 169, and its implementing regulation 209 CMR 45.00 et seq.
At all relevant times, Century Union has been engaged in the business of a foreign transmittal agency in the Commonwealth.
Century Union is, and at all relevant times has been, a limited liability company conducting business in the Commonwealth with its main office located at 493 Broadway, Everett, Massachusetts.
Century Union is currently licensed as a foreign transmittal agency under Massachusetts General Laws chapter 169, section 6, with license number FT907743. According to records maintained on file with the Division, and as recorded on the Nationwide Multi-State Licensing System and Registry (NMLS), the Commissioner initially issued a foreign transmittal agency license to the Corporation on February 25, 2015.
Century Union maintains a foreign transmittal license and engages in the foreign transmittal business from its main address and 30 licensed agent locations throughout Massachusetts.
Century Union is a money services business within the meaning of The Bank Secrecy Act (BSA), 31 U.S.C. 5311-5330, and its implementing regulation at 31 CFR Chapter X.
Management is, and at all relevant times has been comprised of Robes Barboza, 100% owner and President, Melissa Surinach, Compliance Officer, and/or Laercio Alves de Araujo, Compliance Officer. Upon information and belief, Ms. Surinach resigned from the Company as of May 11, 2016 and the Company designated Mr. Alves de Araujo as Compliance Officer on May 15, 2016.
Pursuant to Massachusetts General Laws chapter 169, section 10, the Division is authorized to inspect the books, accounts, and records of foreign transmittal agencies transacting business in Massachusetts to determine compliance with the provisions of Massachusetts General Laws chapter 169 and any rule, or regulation issued thereunder, and with any law, rule, or regulation applicable to the conduct of the business of a foreign transmittal agency.
On February 11, 2016, pursuant to the authority granted under Massachusetts General Laws chapter 169, section 10, the Division commenced an examination of the books, accounts, and records, maintained by Century Union to evaluate the Company’s compliance with the laws and regulations applicable to the conduct of the foreign transmittal agency in Massachusetts (Examination). The Division's Report of Examination (Report), alleges non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a foreign transmittal agency in Massachusetts.
The Report was issued on the effective date of this Order and Notice alleges significant failures to comply with applicable state and federal laws, rules, and regulations governing the conduct of those engaged in the business of a foreign transmittal agency in Massachusetts. The findings and conclusions of the Report are incorporated herein in their entirety by reference.
Failure to Demonstrate the Financial Responsibility, Character, Reputation, Integrity, and General Fitness to Maintain a Foreign Transmittal Agency License.
Said commissioner may reject an application for a license or an application for a renewal of a license if he finds that the financial responsibility, character, reputation, integrity and general fitness of the applicant and the members thereof if such applicant is a partnership or association, and of the officers and directors if the applicant is a corporation are not such as to warrant belief that the business will be operated in accordance with law and in the public interest.
(a) The Commissioner may deny an application if the Commissioner, upon review of the application and other relevant information, determines that the applicant has not satisfied the requirements of 209 CMR 45.03 or 45.04, M.G.L. …. c. 169….
Books and records reviewed by the Division's examiners during the Examination revealed that Century Union had: failed to transmit money received for transmission to the beneficiary within seven days of receipt; commingled consumer funds with operating funds; failed to implement and maintain an effective Anti-Money Laundering (AML) program, including failure to provide adequate training and education to employees; failed to conduct adequate due diligence on, or exercise appropriate oversight of, foreign agents/counterparties; failed to maintain adequate surety bond coverage at all times; failed to adequately monitor for suspicious activity and failed to timely file Suspicious Activity Reports (SAR); failed to file a Currency Transaction Report (CTR); failed to make and retain records as required under the Bank Secrecy Act’s implementing regulations (31 CFR Chapter X); and failed to provide certain consumer disclosures required under the Consumer Financial Protection Bureau’s (CFPB) regulation 12 CFR 1005.31(3); as more specifically enumerated in this Order and Notice and in the Review and Findings section of the Report.
Grounds for license revocation, the issuance of cease and desist orders, or other disciplinary action shall include, but not be limited to, the prohibited acts and practices provided in 209 CMR 45.16(1) and (2).
2…… It shall also be a prohibited act or practice for: .…b. A licensed foreign transmittal agency to fail to forward all money received for transmission to a foreign country to the person to whom the same is directed within seven days following receipt thereof.
Books and records reviewed during the Examination identified 318 transactions where consumer funds were not delivered within the required 7 day period, representing approximately 2.36% of all foreign transmittal transactions that occurred during the examination review period. The cited transactions were forwarded between 8 and 31 days after the customer initiated transmittal.
After the on-site examination concluded, the Division requested and received books and records for foreign transmittal transactions conducted from August 1, 2016 through October 25, 2016 to assess whether Century Union’s system errors were corrected so that funds were being timely delivered to beneficiaries. The examiners identified 86 transactions where consumer funds were delivered outside of the required 7-day time period, representing approximately 16.44% of transactions reviewed during that period. The cited transactions were forwarded between 8 and 14 days after the customer initiated transmittal.
(1) All funds of clients deposited with a licensed foreign transmittal agency for transmittal to a foreign country shall be deposited in one or more client funds accounts maintained at a federally insured bank or credit union. Said account(s) shall contain only those funds collected for transmittal….. (4) No person licensed as a foreign transmittal agency shall commingle money collected from clients for transmission abroad with its own funds or use any part of a client's money in the conduct of the licensed foreign transmittal agency's business.
Books and records reviewed during the Examination identified several instances where Century Union utilized money from a client funds account for the Company’s operations and/ or personal expenses.
Books and records reviewed during the Examination identified numerous funds transfers between the Company’s operating account and a client funds account which resulted in commingling of the Company’s operating funds with the funds collected for transmittal.
(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.
The BSA's implementing regulation at 31 CFR §1022.210 (d) requires all money services businesses, including but not limited to a foreign transmittal agency such as Century Union, to implement written anti-money laundering policies and procedures that, at a minimum: (1) incorporate policies and procedures and internal controls reasonably designed to assure compliance with this part, including requirements verifying customer identification, filing reports, creating and retaining records, and responding to law enforcement requests; (2) designate a person to assure day to day compliance with the program; (3) provide for education and/or training of appropriate personnel, including training in the detection of suspicious transactions; and (4) provide for independent review to monitor and maintain an adequate program.
Books and records reviewed by the Division’s examiners during the Examination, indicated that the Century Union’s AML program was seriously deficient as the Company failed to implement effective internal controls or implement appropriate AML policies and procedures, which resulted in numerous federal and state compliance violations as more specifically enumerated in this Order and Notice and in the Review and Findings section of the Report.
The Division’s examiners determined that the failure to establish an effective AML program resulted in the Company’s failure to identify, and adequately respond to suspicious activity, that would have been identified had the Company implemented a reasonable anti-money laundering program outlined in BSA’s implementing regulations.
Each financial institution other than a casino shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000.
A report required by §1010.311 or §1021.311, shall be filed by the financial institution within 15 days following the day on which the reportable transaction occurred.
A review of Century Union’s transaction data for the examination period revealed that Century Union failed to file one CTR for a transaction with currency value of more than $10,000.
Books and records reviewed by the Division’s examiners revealed that twenty two CTRs were filed by Century Union outside of the required timeframe. Additionally, the Division’s examiners determined that ten (10) CTRs were filed incorrectly. Specifically, Century Union listed the transaction total in the incorrect box (Part II, Section 25, box Z) of the CTR form. The transaction total (currency received for funds transfer(s) out) should have been disclosed in Part II, Section 25, Box C of the CTR form.
(1) Every money services business… shall file with the Treasury Department, to the extent and in the manner required by this section, a report of any suspicious transaction relevant to a possible violation of law or regulation….
(3) When to file. A money services business subject to this section is required to file each SAR-MSB no later than 30 calendar days after the date of the initial detection by the money services business of facts that may constitute a basis for filing a SAR-MSB under this section….
Of the 32 SARs filed by Century Union for Massachusetts transactions during the examination period, five were filed outside of the required time-frame, four were nine days late and one was two days late.
A money services business’s anti-money laundering program shall, “(2) Designate 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 retain 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.
Century Union has designated a compliance officer; however, the Examination revealed that the compliance officer failed to effectively perform the required duties necessary for that position as evidenced by the deficiencies cited in the Report and this Order and Notice.
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.
Century Union provides AML training to its employees; however, in practice, the training program established by Century Union was not sufficient to prevent the Company’s failure to comply with the minimal BSA anti-money laundering program requirements as more specifically noted in this Order and Notice and the Report.
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.
Books and records reviewed by the Division’s examiners during the Examination revealed that while an independent review for Century Union was conducted, the independent review did not reveal the significant violations discovered during the Examination, therefore calling into question the effectiveness of the independent review. In addition, Century Union failed to implement the “recommendations for further improvement” set forth in the independent reviewer’s report. Furthermore, upon information and belief, Century Union’s most recent independent review was completed on February 28, 2014 for activity conducted during 2013, and no review has been conducted since that time.
On July 10, 2012, the Division issued an industry letter “Industry Guidance Relative to Money Transmission to Foreign Countries by Foreign Transmittal Agencies,” alerting foreign transmittal agencies of their responsibility to monitor the activities of third party providers and to exercise due diligence prior to entering into relationships with such entities.
The Central Bank of Brazil authorizes and supervises the operations of foreign counterparties conducting business in Brazil. The Division's review of the directory of agents authorized to engage in foreign exchange transactions in Brazil available from the Central Bank of Brazil, indicates that Century Union maintained agent relationships with unauthorized foreign counterparties in Brazil.
Books and records reviewed by the Division’s examiners during the Examination revealed that from March 28, 2015 through April 27, 2015, Century Union failed to comply with the 2004-1 Interpretive Release guidelines by utilizing Midas Sociedade Corretora De Cambio S.A (Midas), an entity that is not authorized to legally act as a settlement agent for foreign exchange in Brazil, for nine transactions, representing approximately 50% of all remittances to Brazil. Century Union could not provide evidence that transactions remitted through Midas were processed by an entity registered with and authorized by the Central Bank of Brazil. Century Union terminated its relationship with Midas on April 29, 2015.
Books and records reviewed by the Division’s examiners during the Examination revealed that from June 8, 2015 through November 30, 2015, Century Union failed to comply with the 2004-1 Interpretive Release guidelines by utilizing MSBB Money Ltd. (MSBB), an entity that is not authorized to legally act as a settlement agent for foreign exchange in Brazil, for 1566 transactions, representing approximately 66.58% of all remittances to Brazil. Century Union could not provide evidence that transactions remitted through MSBB were processed by an entity registered with and authorized by the Central Bank of Brazil. The examiners determined that MSBB utilized an unauthorized third-party paying agent, Fortuna Cambios, to make payments to beneficiaries for 34 of those transactions. Examiners confirmed that transactions sent through MSBB after November 10, 2015 were processed by an entity that is authorized by the Central Bank of Brazil to engage in foreign exchange, MS Bank S.A. Banco de Cambio.
Examiners determined that Century Union failed to properly oversee activities of Midas, as there was at least one instance of overtly suspicious activity on the part of Midas that was not detected by Century Union. Century Union received and reviewed proof of payments from Midas that showed a single transaction for $11,500 was paid to the beneficiary in six separate payments; however, Century Union did not conduct an investigation into the reasons for the suspicious payment method.
Books and records reviewed by the Division’s examiners during the Examination revealed that the Company failed to increase its bond coverage to account for Century Union’s rapid business growth which could have resulted in consumer harm. Records reviewed by the Division’s examiners revealed that the Company’s bond coverage was deficient from July 31, 2015 through March 1, 2016.
On January 30, 2016, Century Union reported $8,225,994 in total remittances for 2015. Therefore, twice the average weekly average amount of transactions during 2015 was $316,384, which requires minimum bond coverage of such amount. However, Century Union only maintained a bond of $50,000 through February of 2016. Century Union increased its bond coverage to $317,000 on March 1, 2016, after being alerted of the issue by the Division’s examiners.
Each licensee shall comply with 209 CMR 48.00: Licensee Record Keeping and shall keep and use its books, records, and accounts in a manner which will allow the Commissioner to determine whether the licensee is complying with the provisions of ….c. 169….;and state and federal laws and regulations, as applicable.
(F) As many of the following items as are received with the transmittal order: ….(3) Any other specific identifier of the recipient..
During the Examination, the examiners identified two instances where the customer ID recorded in the Company’s database differed from the ID provided by the individual.
Failure to Provide Certain Required Consumer Disclosures.
Upon review of the Company’s receipts, the Division’s examiners noted that the receipts provided to consumers did not provide consumers with the date on which funds would be available to the designated recipients.
In addition to the violations specifically set forth in this Order and Notice, the Report to be provided in conjunction with the issuance of this Order and Notice describes other violations observed during the Examination.
The Division hereby re-alleges, and incorporates by reference Paragraphs 1 through 53 of this Order and Notice as though fully set forth.
CHARGE ONE: Century Union has failed to demonstrate and maintain the financial responsibility, character, reputation, integrity, and general fitness that would warrant the belief that the foreign transmittal agency business will be operated honestly, fairly, and soundly in the public interest in violation of Massachusetts General Laws chapter 169, section 6 and the Division's regulations 209 CMR 45.03 and 209 CMR 45.05.
CHARGE TWO: By failing to timely remit money received for transmission to a foreign country to the beneficiary within seven days following receipt thereof, Century Union is violation of the Division’s regulation 209 CMR 45.16(2)(b).
CHARGE THREE: By commingling the Company’s operating funds with funds collected for transmittal, Century Union was in violation of the Division’s regulation 209 CMR 45.13.
CHARGE FOUR: By failing to implement an effective Anti-Money Laundering program commensurate with the risks posed by the location and size of, and nature and volume of the financial services provided by the Company, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1022.210.
CHARGE FIVE: By failing to file CTRs for all transactions with a currency value of more than $10,000, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1010.311.
CHARGE SIX: By failing to file CTRS within the required 15 day timeframe, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1010.306(a)(1).
CHARGE SEVEN: By failing to timely file Suspicious Activity Reports when presented with instances of apparent suspicious transmittal patterns, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1022.320(a).
CHARGE EIGHT: By failing to ensure that the Company’s designated compliance officer effectively performed the duties required to ensure compliance with the Bank Secrecy Act’s requirements, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1022.210(d)(2).
CHARGE NINE: By failing to ensure that the appropriate personnel had received the education and/or training required to ensure compliance with the Bank Secrecy Act’s requirements, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1022.210(d)(3).
CHARGE TEN: By failing to provide for an independent review with a scope or frequency commensurate with the risks posed by its business operations, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1022.210(d)(4).
CHARGE ELEVEN: By failing to implement recommendations set forth in an independent reviewer’s audit of the Company’s AML program, Century Union is in violation of the Bank Secrecy Act’s implementing regulation 31 CFR §1022.210(d)(4).
CHARGE TWELVE: By failing to conduct due diligence on foreign agents/counterparties, Century Union is in violation of FinCEN Interpretive Release Number 2004-1.
CHARGE THIRTEEN: By failing to effectively monitor foreign agents/counterparties, Century Union is in violation of FinCEN Interpretive Release Number 2004-1.
CHARGE FOURTEEN: By failing to maintain adequate bond coverage at all times, Century Union was in violation of Massachusetts General Law chapter 169, section 2.
CHARGE FIFTEEN: By failing to maintain adequate books, records and accounts, Century Union violated Massachusetts General Laws, Chapter 169, section 10, the Division’s regulation 209 CMR 45.11(1) and the Bank Secrecy Act’s regulation 31 CFR 1010.410(e).
CHARGE SIXTEEN: By failing to provide consumers with the date on which funds would be available to designated beneficiaries, Century Union is in violation of the Consumer Financial Protection Bureau’s regulation 12 CFR §1005.31(b)(2).
CHARGE SEVENTEEN: Had the foregoing existed or been known to the Division at the time of Century Union’s foreign transmittal agency license application, the Commissioner would have been warranted in refusing to issue such license. Further, the facts and conditions set forth in Paragraphs 1 through 53 present sufficient grounds for the revocation of Century Union’s foreign transmittal agency license pursuant to Massachusetts General Laws chapter 169, section 12.
for a final Agency decision in favor of the Division and against Century Union for each Charge set forth in this Order and Notice.
For a final Agency decision revoking Century Union’s foreign transmittal agency license to conduct business as a foreign transmittal agency in Massachusetts.
You are further advised that Century Union has the right to be represented by counsel or another representative, to call and examine witnesses, to introduce exhibits, to cross-examine witnesses who testify against Century Union and to present oral arguments. The hearing will be held at a date and time to be determined and will be conducted according to Massachusetts General Laws, chapter 30A, sections 10 and 11, and the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01 and 1.03.
Century Union or its representative may examine any and all Division records relative to this case prior to the date of the hearing, during normal business hours, at the office of the Prosecuting Counsel. If you elect to undertake such an examination, please contact the Prosecuting Counsel, Valerie Carbone at 617-956-1552 in advance to schedule a time that is mutually convenient.
Dated at Boston, Massachusetts, this 10th day of November, 2016.

References: §1022
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 §1005