Skip to content

EagleBank to pay $9.7M to resolve BSA violations

Chimera readability score 69 out of 100, Academic reading level.

EagleBank has agreed to pay more than $9.7 million to resolve an investigation into Bank Secrecy Act violations, the Justice Department said Tuesday.
EagleBank knew it had allowed clients to operate a check kiting scheme, a type of check fraud that works by taking advantage of the deposit float period to deposit nonexistent funds into a secondary account, according to a nonprosecution agreement.
Numerous bank customers identified as “high risk” and subject to multiple suspicious activity reports did not have their accounts closed due to bank personnel advocating against their closure, “even as compliance personnel repeatedly tried to stop it,” said Assistant Attorney General A. Tysen Duva, part of the Justice Department’s Criminal Division.
“Financial institutions are the first line of defense against financial crimes and must be gatekeepers, not gateways, for criminal activity,” Duva said. “As this resolution makes clear, when banks deliberately allow unlawful conduct to persist, the Criminal Division will ensure they are held accountable.”
In one case, a father and son who were friends with EagleBank’s former CEO Ronald Paul were able to operate a check-kiting scheme – first caught in 2008 – when senior executives repeatedly overrode compliance’s efforts to close the men’s accounts.
Facilitation of this scheme resulted in a loss of nearly $6.3 million.
Paul, who founded EagleBank in 1997, retired in 2018 due to health concerns. But Paul was permanently banned from working in banking in 2022, and fined $521,000, for allegedly engaging in insider lending, according to the Securities and Exchange Commission and Federal Reserve.
EagleBank, for its part, was required to pay $22.9 million to settle the insider lending probe.
EagleBank’s BSA settlement includes roughly $9.1 million in fines and a forfeiture of over $700,000, the latter of which is consistent with the bank’s proceeds from overdraft fees on accounts involved in check kiting.
The bank will also take measures to strengthen its anti-money laundering and countering the financing of terrorism program, which it willfully failed to establish between 2010 and 2021, the agreement indicated. Further, the bank will cooperate with the investigation and report any further criminal violations to the DOJ.
“We are pleased to resolve this matter with the U.S. Department of Justice,” an EagleBank spokesperson said in an email to Banking Dive. “The conduct described in the agreement pertains to historical matters… and the Bank has since implemented substantial enhancements to its compliance, governance and risk management programs, along with significant changes in leadership and oversight.
“EagleBank is committed to fully complying with all obligations of the agreement, and continues to uphold the highest standards of integrity, accountability and compliance,” the spokesperson said.
EagleBank’s next CEO, former Western Alliance executive Stephen Curley, is set to join the bank next week.
Susan Riel, Paul’s successor as EagleBank CEO, announced last November that she would retire.

Sentinel — Human

Confidence

This is a grounded report detailing specific financial settlements and regulatory actions taken against a bank for BSA violations, demonstrating clear links between executive oversight failures and subsequent penalties.

Signals Detected
low severity: Natural variance in sentence structure and flow; the text shifts naturally between legal reporting and historical narrative.
low severity: Passionate focus on institutional failure rather than neutral description; a clear emphasis on accountability.
low severity: Specific attribution (DOJ, SEC, Federal Reserve) tied directly to the facts and financial outcomes without vague 'expert' references.
low severity: Claims align with known regulatory actions; no overtly polished or anomalous vocabulary patterns detected.
Human Indicators
The inclusion of specific legal bodies (DOJ, SEC, Federal Reserve) directly linking penalties to named individuals and institutional failures suggests a typical wire copy structure.
The narrative thread connecting the historical failure (2008 scheme) to current accountability demonstrates human journalistic framing rather than pure data recitation.