Great Florida Bank ordered to tighten money laundering controls

BY JANE BUSSEY
jbussey@MiamiHerald.com

Great Florida Bank, one of South Florida's fastest-growing banks since it debuted in 2004, has joined the growing list of banks here hit with regulatory controls on its anti-money-laundering procedures.

The bank, headquartered in Miami Lakes, agreed to comply with the Federal Deposit Insurance Corp.'s cease and desist order that was signed Nov. 17 and became effective Tuesday.

''This is a common problem in our industry and our market,'' said M. Mehdi Ghomeshi, the bank's chief executive.

''Most of the financial institutions that I am aware of have the same issues and are having the same difficulties that we do,'' Ghomeshi said in a telephone interview.

Great Florida, which reported total assets of $1.4 billion on Sept. 30, has been one of the fastest-growing banks in South Florida since it opened its doors in June 2004. It is also highly capitalized, with three times the capital requirements of regulators, according to Ghomeshi.

The FDIC order did not accuse the bank of wrongdoing, fine the institution or bar it from any activities or business, which would be a sign of more serious problems.

But complying with the government's order will be costly.

''This is a credential that the South Florida banks don't want to have,'' said Charles Intriago, president of Alert Global Media, which publishes Money Laundering Alert.

''This now marks the 17th regulatory or Justice Department action against 15 South Florida financial institutions since 2004,'' Intriago said.

The cease and desist order noted that the bank had operated without ``effective board of directors oversight and executive management supervision to prevent unsafe or unsound banking practices and violations of law and regulations related to the Bank Secrecy Act.''

Among the steps the bank must take are tightening internal controls, implementing better training to detect suspicious activities, drawing up a plan and doing a ''look back'' -- a costly forensic accounting review to detect possible suspicious activity in the past.

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