Taipei, April 20 (CNA) Prosecutors said on Thursday that after checking 17,033 transactions suspected of potentially involving money laundering between Mega Bank's New York and Panama branches, no evidence was found of "criminal acts, abnormal transactions or money laundering."
An investigation was triggered after the state of New York's Department of Financial Service (DFS) slapped a US$180 million fine on Mega Bank in August 2016 on the grounds that it had identified "a number of suspicious transactions" between its New York and Panama branches.
Mega Bank was accused of not complying with existing law when it failed to report suspicious transactions made by clients to the U.S. authorities.
The transactions in question at Mega Bank's New York branch took place in 2012 and were uncovered by the DFS during an investigation conducted between January and March 2015.
Mega Bank is the first Taiwanese bank to be fined for violating U.S. anti-money laundering laws.
After the bank was fined, the government-invested banking group's governance and management were called into question, prompting the Cabinet to set up a task force to investigate the case and determine who should be held accountable.
Prosecutors also summoned the banking group's senior executives to better understand the bank's operations.
Mckinney Tsai (蔡友才), former chairman of Mega Financial Holding Co. (兆豐金控), was removed from the bank's board in September last year after he was found to have ignored the U.S. probe into the money laundering case, resulting in the fine imposed on Mega Bank.
Mega Financial received a report on the money laundering case from the U.S. authorities in February last year and Tsai had full knowledge about the case, but failed to take action.
Tsai quit as bank chairman in March 2016, citing health reasons.
On Sept. 14, 2016, the Financial Supervisory Commission (FSC) fined Mega International Commercial Bank NT$10 million (US$315,000), saying poor governance and management at the bank had been directly responsible for the fine imposed by New York State Department of Finance.
After completing its own investigation, the FSC said the company's top managers had failed to build and implement an internal audit mechanism and violated the Banking Act.
Thereafter, the FSC removed Tsai from the board and also ordered the bank to dismiss CEO Wu Han-ching, New York branch General Manager Huang Shih-ming (黃士明) and Deputy General Manager Liang Mei-chi, Auditor General Liu Hsiao-ling and Chief Compliance Officer Chen Tien-lu for negligence.
Under Taiwan law, Tsai and the other five Mega Bank executives will not be permitted to work in the country's financial sector for five years.
In 2016, Wang Chi-pang (王起梆), a former chief secretary at Mega Financial and aide to Tsai, was released on NT$2 million bail and barred from leaving Taiwan after being questioned by prosecutors.
On Dec. 2, 2016, Tsai, Huang and Wang were indicted on charges of breach of trust, insider trading and other crimes in a separate case not related to the money laundering allegations.