EagleBank, a community bank with operations in Maryland, Virginia, and the District of Columbia, and its parent entity, Eagle Bancorp Inc., has agreed to pay over $9.7 million to resolve a Justice Department investigation into violations of the Bank Secrecy Act. The resolution comes under a non-prosecution agreement announced by U.S. Attorney Brian D. Miller.
According to the agreement, EagleBank admitted to willfully failing to establish an anti-money laundering and countering the financing of terrorism (AML/CFT) program between 2010 and 2021. This failure allowed two customers, a father and son, to operate a check kiting scheme for more than a decade, resulting in a nearly $6.3 million loss to another financial institution. Senior bank executives reportedly overrode compliance personnel's repeated attempts to halt the illicit conduct and close the involved accounts.
U.S. Attorney Brian D. Miller emphasized the seriousness of the matter, saying, “It is simply unacceptable for financial institutions to permit fraud under their noses.” Assistant Attorney General A. Tysen Duva added, “Financial institutions are the first line of defense against financial crimes and must be gatekeepers, not gateways, for criminal activity.” The payment includes a fine of $9,057,821.62 and a forfeiture of $736,515, representing overdraft fees from the scheme.
As part of the agreement, EagleBank has committed to implementing additional remedial measures to strengthen its AML/CFT program, cooperate with ongoing investigations, and report any future violations of federal criminal law. The FBI investigated the case, which was prosecuted by Chief Michael P. Grady and Assistant U.S. Attorney Ravi Romel Sharma.