US bank regulators yesterday ordered Miami-based American Express Bank International, a subsidiary of American Express Group, to pay $65 million in fines for violations of anti-money laundering laws. "AEBI had significant breakdowns in carrying out its compliance activities, and, as a result, failed to establish and maintain procedures adequately designed to ensure and monitor AEBI's compliance with the BSA and related laws and regulations," said the Federal Reserve, one of the regulators. The Financial Crimes Enforcement Network and the US Department of Justice were also involved in the action. The Justice Department said AEBI had participated in suspicious activity such as "drug-related money laundering transactions, accomplished through 'Black Market Peso Exchange' wire transfers that were undertaken as part of an undercover law enforcement operation." The black market peso exchange in Colombia is the largest known money-laundering system in the Western Hemisphere, according to the US Treasury Department, moving an estimated $5 billion of drug money annually from the US back to Colombia. AEBI offers traditional private banking services, principally to high net worth customers located in Latin America. "Today's action by the Federal Reserve underscores the necessity for banking institutions to have anti-money laundering controls in place that are commensurate with the level of risk associated with their operations," said Roger Cole, director of the Fed's division of banking supervision and regulation.