Boston Bank Gives Reasons for Violations : Sloppy Management Cited in Currency Case

Seven months after it admitted violating several federal currency laws, Bank of Boston on Wednesday released the findings of an internal investigation that blames the bank’s wrongdoing on extensive non-compliance with government guidelines, poor judgment and sloppy management.

The bank said the investigators--five members of its board of directors--found that several departments and top executives, including Chairman William L. Brown, bear some responsibility for the transgressions, and it suggested that especially culpable employees be disciplined but not publicly.

“The events of the last several months have taught us a painful lesson,” the bank said. “Proud as we are of the bank’s record of corporate excellence and commitment to the community, we have realized the bank did not place a sufficiently high priority on corporate compliance and must redouble its efforts in this area.”

The bank stressed, however, that the investigators found no evidence that company employees had profited from the violations or conspired with customers not to report currency transactions.

Denies ‘Laundering’

“Nor was any evidence found that cash transactions between the bank and foreign banks involved any money-laundering scheme,” said the report, signed by the board of directors of Bank of Boston Corp.

The bank appointed the committee in February, shortly after it paid a $500,000 fine for violating the Currency and Foreign Transactions Reporting Act. The bank admitted that it had not reported 1,500 large cash transactions with nine foreign banks to the federal government, as required by the act.

The committee found that bank employees misunderstood and therefore neglected federal laws concerning international bank transactions. Moreover, once the government notified the bank of its errors, no one tried to correct the problem.

About the same time that the bank pleaded guilty to violating the act, the government revealed that it was investigating the bank for another reason.

It said the bank’s North End branch had placed companies owned by the family of Gennaro Angiulo, a reputed organized crime leader, on its list of customers whose large cash transactions did not require government scrutiny.

The committee said that, although some bank employees accepted gifts from the Angiulo family, there was no evidence that they were in collusion with the reputed mobsters.