A former Wells Fargo rep with a penchant for gambling was expelled from the industry for depositing his winnings in a way that deliberately skirted federal reporting requirements under the Bank Secrecy Act, according to a recent FINRA hearing panel decision.
The regulator accused Richard White of unlawfully "structuring" a total of $77,560 that he won on gambling trips to Las Vegas by depositing the cash into his bank accounts in amounts just below $10,000 reporting threshold.
Under the Bank Secrecy Act, banks and broker-dealers are required to file currency transaction reports for all transactions exceeding $10,000, the hearing panel explained in its decision.
"Several times, White broke the wrapper on a pack of $10,000 that he had received from a casino, pulled out a one hundred dollar bill or two, and deposited the remaining $9,700 or $9,900," the panel said.
White took eight trips to Las Vegas from March 2012 to March 2015, FINRA said. He returned home with gambling winnings on two of the eight occasions.
Rather than depositing the cash from his winnings in a single transaction, White made multiple deposits below $10,000 over the course of several days or weeks, FINRA said. The regulator also accused him of concealing what he was doing by splitting deposits aggregating more than $10,000 into smaller deposits at two different financial institutions so that neither would recognize that a report should be made.
White should have known better, FINRA said. He had extensive training on what constitutes unlawful structuring of cash transactions and knew from his employee handbook that engaging in structuring could lead to criminal sanctions and professional discipline.
Furthermore, FINRA argued that White intended to evade the filing of a currency transaction report because he confessed to a Wells Fargo investigator and some of his friends that he made the deposits the way he did to avoid raising a red flag and having questions asked.
White's attorney, Nathan Zezula of Connecticut law firm Lueker, Mott, Zezula, fired back at FINRA, saying the decision to bar him – "an upstanding member of the securities industry for over 20 years" – was "both unconscionable and unconstitutional."
"FINRA has stripped Mr. White of his right to make a living simply because of how he deposited his own, legally-obtained funds in his personal bank account. Nobody has suggested that Mr. White did anything to hurt anyone—much less to hurt his clients or his employer," he said.
In addition to barring White from the brokerage industry, FINRA ordered him to pay $6,648 in costs.
White worked for Wells Fargo Securities in Charlotte, North Carolina, from July 2003 to April 2015, when he was terminated, according to FINRA. He joined First Union National Bank, a predecessor of Wells Fargo, in 1994. From 1999 until he lost his job, White worked on the firm's municipal bond trading desk.
Emily Acquisto, a spokeswoman for Wells Fargo, declined to comment on White's expulsion.
FINRA's decision becomes final on April 16, unless White appeals the decision, which Zezula says is likely.