8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2006

BANKATLANTIC BANCORP, INC.

(Exact name of registrant as specified in its charter)

FLORIDA	34-027228	65-0507804
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2100 West Cypress Creek Road, Fort Lauderdale, Florida		33309
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 954-940-5000

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

     BankAtlantic Bancorp issued a press release on April 26, 2006 announcing that its wholly owned subsidiary, BankAtlantic, had entered into a deferred prosecution agreement with the U.S. Attorney for the Southern District of Florida relating to deficiencies in its compliance with the Bank Secrecy Act and anti-money laundering laws and regulations, a cease and desist order with the Office of Thrift Supervision and a consent to assessment with FinCEN.

     More information concerning the background of this matter and the terms and conditions of the agreement, the order and the assessment is contained in the press release that is Exhibit 99.1 hereto. The full text of the agreement, the order and the consent to assessment are also attached as exhibits to this report.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BANKATLANTIC BANCORP, INC.
Date: April 27, 2006	By:	/s/ James A. White
		Name:	James A. White
		Title:	Chief Financial Officer

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EXHIBIT INDEX

Exhibit	Description
10.1	Deferred Prosecution Agreement, including Factual Statement
10.2	Assessment of Civil Money Penalty (FinCEN)
10.3	Stipulation and Consent to Cease and Desist Order and Civil Money Penalty (OTS)
10.4	Cease and Desist Order (OTS)
10.5	Order of Assessment of a Civil Money Penalty (OTS)
99.1	Press Release of April 26, 2006

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EX-10.1

Exhibit 10.1

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE

_____________________________

	)
UNITED STATES OF AMERICA,	)
Plaintiff,	)
	)
	)
	)	No.
	)
	)
v.	)
	)
BANKATLANTIC,	)
	)
Defendant,	)
	)

_____________________________

DEFERRED PROSECUTION AGREEMENT

          Defendant BANKATLANTIC, a subsidiary of BankAtlantic Bancorp, Inc., a Florida Corporation, by and through its attorneys, Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., pursuant to authority granted by its Board of Directors, and the United States Department of Justice, Criminal Division (hereinafter, “the United States”), enter into this Deferred Prosecution Agreement (the “Agreement”).

     1. BankAtlantic shall waive indictment and agree to the filing of a ONE (1) count information in the United States District Court for the Southern District of Florida, Fort Lauderdale, charging it with failing to maintain an effective anti-money laundering program, in violation of Title 31 United States Code, Sections 5318(h)(1) and 5322(b).

     2. BankAtlantic accepts and acknowledges responsibility for its conduct as set forth in the Factual Statement attached hereto and incorporated by reference herein as Appendix A (hereinafter, “Factual Statement”).

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     3. BankAtlantic expressly agrees that it shall not, through its attorneys, board of directors, agents, officers or employees, make any public statement contradicting any statement of fact contained in the Factual Statement. Any such contradictory public statement by BankAtlantic, its attorneys, board of directors, agents, officers or employees, shall constitute a breach of this Agreement as governed by Paragraph 11 of this Agreement, and BankAtlantic would thereafter be subject to prosecution pursuant to the terms of this Agreement. The decision of whether any statement by any such person contradicting a fact contained in the Factual Statement will be imputed to BankAtlantic for the purpose of determining whether BankAtlantic has breached this Agreement shall be in the sole and reasonable discretion of the United States. Upon the United States’ notification to BankAtlantic of a public statement by any such person that in whole or in part contradicts a statement of fact contained in the Factual Statement, BankAtlantic may avoid breach of this Agreement by publicly repudiating such statement within 48 hours after notification by the United States.

     4. BankAtlantic agrees that it, in accordance with applicable laws: (a) shall provide to the United States, on request, any relevant document, electronic data, or other object concerning a Bank Secrecy Act matter in BankAtlantic’s possession, custody and/or control. Whenever such data is in electronic format, BankAtlantic shall provide access to such data and assistance in operating computer and other equipment as necessary to retrieve the data; and (b) shall in all material aspects completely, fully and timely comply with all legal obligations, record keeping and reporting requirements imposed upon it by the Bank Secrecy Act, 31 U.S.C. §§ 5311 through 5330 and all Bank Secrecy Act implementing regulations, including, but not limited to 12 C.F.R. § 563.177, 12 C.F.R. § 563.180, 31 C.F.R. § 103.11, 31 C.F.R. § 103.18, 31 C.F.R. § 103.28, 31 C.F.R. § 103.120 and 31 C.F.R.§ 103.121.

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     5. As a result of BankAtlantic’s conduct with respect to the anti-money laundering programs as set forth in the Factual Statement, the United States has determined that it could institute a criminal or civil forfeiture action against certain funds laundered through certain accounts. BankAtlantic further acknowledges that in excess of $10,000,000.00 may have been involved in transactions in accounts in violation of Title 18 United States Code, Sections 1956, 1957, and 1960 and, therefore at least some or all funds deposited in such accounts could be forfeitable to the United States pursuant to Title 18 United States Code, Sections 981 and 982. BankAtlantic recognizes that the United States could institute a civil or criminal forfeiture action against at least certain of those funds, and hereby expressly agrees to settle and does settle any and all civil and criminal claims presently held by the United States against those funds for the sum of $10,000,000.00.

     6. In consideration of BankAtlantic’s remedial actions to date and its willingness to: (i) acknowledge responsibility for its actions; (ii) continue its cooperation with the United States; (iii) demonstrate its future good conduct and full compliance with the Bank Secrecy Act and all of its implementing regulations; and (iv) to settle any and all civil and criminal claims currently held by the United States, its agencies, and representatives against the funds referred to in Paragraph 5 above for the sum of $10,000,000.00; the United States shall recommend to the Court, pursuant to 18 U.S.C. § 3161(h)(2), that prosecution of BankAtlantic on the Information filed pursuant to Paragraph 1 be deferred for a period of twelve (12) months. BankAtlantic shall consent to a motion, the contents to be agreed by the parties, to be filed by the United States with the Court promptly upon execution of this Agreement, pursuant to 18 U.S.C. § 3161(h)(2), in which the United States will present this Agreement to the Court and move for a continuance of all further criminal proceedings, including trial, for a period of twelve (12) months, for speedy trial exclusion of all time covered by such a continuance, and for approval by the Court of this deferred prosecution. BankAtlantic

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further agrees to waive and does hereby expressly waive any and all rights to a speedy trial pursuant to the Sixth Amendment of the United States Constitution, Title 18, United States Code, Section 3161, Federal Rule of Criminal Procedure 48(b), and any applicable Local Rules of the United States District Court for the Southern District of Florida for the period that this Agreement is in effect.

     7. BankAtlantic hereby further expressly agrees that any violations of the federal money laundering laws and/or the Bank Secrecy Act pursuant to 18 U.S.C. §§ 1956, 1957, 1960 and 31 U.S.C. §§ 5313, 5318 and 5322, that were not time-barred by the applicable statute of limitations on March 31, 2006, either by statute, any previously executed Tolling Agreement, the terms of which are hereby incorporated into this Agreement, may, in the sole discretion of the United States be charged against BankAtlantic within six (6) months of any breach of this Agreement, or any event which renders this Agreement null and void, notwithstanding the expiration of any applicable statute of limitations.

     8. The United States agrees that if BankAtlantic is in full compliance with all of its obligations under this Agreement, the United States, within thirty (30) days or earlier of the expiration of the time period set forth in Paragraph 6 above, shall seek dismissal with prejudice of the information filed against BankAtlantic pursuant to Paragraph 1 and this Agreement shall expire and be of no further force or effect.

     9. BankAtlantic and the United States understand that the Agreement to defer prosecution of BankAtlantic must be approved by the Court, in accordance with 18 U.S.C. § 3161(h)(2). Should the Court decline to approve a deferred prosecution for any reason, both the United States and BankAtlantic are released from any obligation imposed upon them by this Agreement and this Agreement shall be null and void.

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     10. Should the United States determine during the term of this Agreement that BankAtlantic has committed any federal crime commenced subsequent to the date of this Agreement, BankAtlantic shall, in the sole discretion of the United States, thereafter be subject to prosecution for any federal crimes of which the United States has knowledge. Except in the event of a breach of this Agreement, it is the intention of the parties to this Agreement that all criminal investigations arising from the facts contained in, connected to, or involving the accounts described in the Factual Statement, that have been, or could have been, conducted by the United States prior to the date of this Agreement shall not be pursued further as to BankAtlantic.

     11. Should the United States determine that BankAtlantic has committed a willful and material breach of any provision of this Agreement, the United States shall provide written notice to BankAtlantic of alleged breach and provide BankAtlantic with a two-week period, or longer at the discretion of the Assistant Attorney General, in which to make a presentation to the Assistant Attorney General in charge of the Criminal Division to demonstrate that no breach has occurred or, to the extent applicable, that the breach is not willful or material or has been cured. The parties hereto expressly understand and agree that should BankAtlantic fail to make a presentation to the Assistant Attorney General in charge of the Criminal Division within such time period, it shall be conclusively presumed that BankAtlantic is in willful and material breach of this Agreement. The parties further understand and agree that the Assistant Attorney General’s exercise of discretion under this paragraph is not subject to review in any court or tribunal outside the Criminal Division of the Department of Justice. In the event of a breach of this Agreement which results in a prosecution, such prosecution may be premised upon any information provided by or on behalf of BankAtlantic to the United States at any time, unless otherwise agreed when the information was provided.

     12. BankAtlantic agrees that, if it sells or merges all or substantially all of its business operations as they exist as of the date of this Agreement to a single purchaser or group of affiliated purchasers during the term of this Agreement, it shall include in any contract for sale or merger a provision binding the purchaser/successor to the obligations described in this Agreement.

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     13. It is further understood that this Agreement is binding on BankAtlantic and the United States Department of Justice, but specifically does not bind any other federal agencies, or any state or local authorities, although the United States will bring the cooperation of BankAtlantic and its compliance with its other obligations under this Agreement to the attention of state or local prosecuting offices or regulatory agencies, if requested by BankAtlantic or its attorneys.

     14. It is further understood that this Agreement does not relate to or cover any criminal conduct by BankAtlantic other than the conduct or the accounts described in the Factual Statement.

     15. BankAtlantic and the United States agree that, upon acceptance by the Court, this Agreement and an Order deferring prosecution shall be publicly filed in the United States District Court for the Southern District of Florida.

     16. This Agreement sets forth all the terms of the Deferred Prosecution Agreement between BankAtlantic and the United States. No promises, agreements, or conditions have been entered into other than those expressly set forth in this Agreement, and none shall be entered into and/or are binding upon BankAtlantic or the United States unless expressly set forth in writing, signed by the United States, BankAtlantic’s attorneys, and a duly authorized representative of BankAtlantic and physically attached to this Agreement. This Agreement supersedes any prior promises, agreements or conditions between BankAtlantic and the United States.

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Acknowledgments

     I, the undersigned, duly authorized representative of BankAtlantic, hereby expressly acknowledge the following: (1) that I have read this entire Agreement and all attachments hereto; as well as the other documents filed herewith in conjunction with this Agreement, including the information; (2) that I have had an opportunity to discuss this Agreement fully and freely with BankAtlantic’s attorneys; (3) that BankAtlantic fully and completely understands each and every one of its terms; (4) that BankAtlantic is fully satisfied with the advice and representation provided to it by its attorneys; and (5) that BankAtlantic has signed this Agreement voluntarily.

Name	Title	Signature
Alan B. Levan	Chairman of the Board	/s/ Alan B. Levan
	& Chief Executive Officer
James A. White	Chief Financial Officer & Executive Vice President	/s/ James A. White

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Acknowledgment of Counsel for the BankAtlantic

     The undersigned is outside counsel for BankAtlantic. In connection with such representation I acknowledge that: (1) I have reviewed this Agreement and all related documents, and have discussed this Agreement with authorized representatives of BankAtlantic; (2) I have fully explained each one of its terms to our client; (3) I have fully answered each and every question raised by BankAtlantic regarding the Agreement; and (4) I believe BankAtlantic completely understands all of the Agreement’s terms.

	STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A. Attorneys for BankAtlantic Museum Tower — Suite 2200 150 West Flagler Street Miami, Florida 33130 Telephone No: (305) 789-3200 Facsimile No: (305) 789-3395
	By:	/s/ Ana T. Barnett
DATE 4/24/06		Ana T. Barnett  Florida Bar No. 217212 abarnett@swmwas.com

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On Behalf of the Government

ALICE FISHER
Assistant Attorney General, Criminal Division
United States Department of Justice
 

DATE 4/25/06	By:	/s/ RICHARD WEBER
		Chief, Asset Forfeiture and Money Laundering
		Section U.S. Department of Justice, Criminal Division
DATE 4/25/06	By:	/s/ JOHN W. SELLERS
		Trial Attorney, Asset Forfeiture and Money
		Laundering Section U.S. Department of Justice, Criminal Division
DATE 4/25/06	By:	/s/ THOMAS J. PINDER
		Trial Attorney, Asset Forfeiture and Money
		Laundering Section U.S. Department of Justice, Criminal Division

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Factual Statement

     1. BANKATLANTIC is a Federal/Stock Savings Bank and a wholly-owned subsidiary of BANKATLANTIC BANCORP, INC., a publicly held financial institution, traded on the New York Stock Exchange.

     2. BankAtlantic is a “financial institution” as defined in 31 U.S.C. § 5312(a)(2), a “bank” as defined in 31 C.F.R. § 103.11(c); and an “insured depository institution” as defined in section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(c)(2)).

     3. BankAtlantic is subject to oversight and regulation by the Office of Thrift Supervision (“OTS”).

     4. The Bank Secrecy Act (“BSA”), 31 U.S.C. § 5311 et seq., and its implementing regulations, which Congress enacted to address an increase in criminal money laundering activities utilizing financial institutions, require domestic banks, insured banks and other financial institutions to maintain programs designed to detect and report suspicious activity that might be indicative of money laundering, terrorist financing and other financial crimes, and to maintain certain records and file reports related thereto that are especially useful in criminal, tax or regulatory investigations or proceedings.

     5. The U.S. Department of Justice, Criminal Division, Asset Forfeiture and Money Laundering Section (“AFMLS”), and the U.S. Drug Enforcement Administration (“DEA”), have determined that from June 1997 through April 2004, BankAtlantic violated the anti-money laundering and suspicious activity reporting requirements of the Bank Secrecy Act and its implementing regulations. The violations at BankAtlantic were serious and systemic and allowed millions of dollars of suspicious financial transactions through BankAtlantic without detection by BankAtlantic, including the deposit and transfer of more than $10 million in suspected drug proceeds

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United States v. BankAtlantic
Statement of Facts

originating from U.S. undercover law enforcement operations. Millions of dollars in suspicious financial transactions were executed at BankAtlantic by unlicenced foreign money service businesses (“MSBs”), many doing business by and through offshore shell corporations, without detection or review by BankAtlantic.

Summary

     6. BankAtlantic’s primary market, South Florida, is designated both a High Intensity Money Laundering and Related Financial Crime Area and a High Intensity Drug Trafficking Area. One branch of the Bank catered to high income/net worth clients including many nonresident aliens, offshore businesses, consulates and politically exposed persons about which BankAtlantic had not sufficiently gathered or verified information. The Bank’s geographic location, potentially high-risk customers and product lines and funds transfer operations required measures to control the risk of money laundering and other financial crimes. Despite the heightened risk, BankAtlantic conducted business without effective systems and controls, as appropriate and practical, to detect and timely report suspicious activity. Ineffective internal controls, ineffective independent testing, and ineffective corrective actions to adverse audit findings led, in turn, to a failure on the part of BankAtlantic to timely report suspicious transactions and a failure on the part of BankAtlantic to adequately prevent the use of the bank for illicit money laundering purposes.

Following the Money Trail

     7. This investigation originally focused on activities of professional money launderers operating in the United States and South America. As part of the investigation, undercover DEA agents posed as professional money launderers who were able to launder drug proceeds for drug traffickers based in Colombia, South America.

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United States v. BankAtlantic
Statement of Facts

     8. The undercover agents would enter into agreements with the drug traffickers to pick up a certain amount of suspected drug proceeds that the traffickers had accumulated in the United States and to deposit those proceeds into the U.S. financial system. On each occasion, the undercover agents contacted a money courier, who worked for the drug trafficker and was in possession of suspected drug proceeds, and exchanged a code word provided by the drug traffickers. The undercover agents then met with the money courier in a busy public place, such as a parking lot, hotel, or shopping center. At the meeting, without exchanging any personal information, the money courier handed the undercover agent a bag, suitcase or briefcase containing suspected drug dollars, in amounts ranging from $150,000 to $500,000, and usually consisting of low denomination bills ($5s, $10s, and $20s). The agents then deposited the suspected drug dollars into an undercover DEA bank account and awaited instructions from the money brokers. Usually, the money brokers would send a facsimile to the agents, providing wire transfer instructions for the money.

     9. Upon review of the wire transfer instructions received from the professional money launderers identified during the investigation, as well as other accounts controlled by the money launderers, it was noted that more than $7 million of suspected drug money was wire transferred to a handful of accounts at BankAtlantic. The recipient accounts at BankAtlantic were all managed by a single BankAtlantic branch manager (the “Account Manager”).

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United States v. BankAtlantic
Statement of Facts

Targeted Accounts at BankAtlantic

     10. The accounts at BankAtlantic that had received suspected drug proceeds or were related to those accounts were reviewed and analyzed by law enforcement, as well as other accounts managed by the suspect Account Manager. This review led to the identification of a number of accounts at BankAtlantic that were suspected of being used to launder drug money (hereinafter referred to as the “Targeted Accounts”). Upon review of the account activity, the Targeted Accounts demonstrated obvious “red flags” that should have put BankAtlantic on notice of an increased risk of money laundering. However, prior to this investigation, BankAtlantic did not identify and report the suspicious activity occurring in the Targeted Accounts, as required by the Bank Secrecy Act and its implementing regulations.

Summary of Activity in Targeted Accounts

     11. The Targeted Accounts at BankAtlantic were characterized by two types of activity that should have been readily identified as suspicious and reported by BankAtlantic: first, most of the accounts showed a high volume of incoming and outgoing wire transfers from various domestic and international accounts held in the names of unrelated individuals and corporations; and second, the accounts showed a high volume of check structuring activity.

     12. Typically, the Targeted Accounts would receive incoming wire transfers from various domestic and international accounts. The Targeted Accounts would in turn send wire transfers and/or checks to another entirely unrelated group of individuals and corporations. Many of the outgoing funds transfers were sent to domestic exporters of goods to South America or to savings and investment accounts held in the United States at other financial institutions by non-resident aliens (“NRAs”). This type of funds transfer activity is consistent with what is commonly referred to

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United States v. BankAtlantic
Statement of Facts

in the law enforcement and banking communities as the “Black Market Peso Exchange” (see Attachment A for a detailed explanation of the “BMPE”). It was determined that in practice the Targeted Accounts were used almost exclusively to receive and transmit funds to and from unrelated third parties in a manner inconsistent with the stated business or personal purpose of the accounts.

     13. The other characteristic of the Targeted Accounts was the deposit of sequential and otherwise structured checks from hundreds of sources unaffiliated with the account owner. U.S. law enforcement agencies and financial institutions have long understood that BMPE money brokers frequently control dozens, sometimes hundreds, of checking accounts in the United States. These accounts are held in the names of unrelated individuals. Colombian and other South American money brokers, in addition to opening accounts in their own names and in the names of offshore shell corporations they control, frequently recruit persons to open checking accounts for them in the United States. Once the account is opened, the recruited person will endorse every blank check received at account opening and turn the signed blank checks over to the money broker. Using this technique, the money broker can easily obtain control over dozens of checking accounts that can be used for the temporary receipt of drug proceeds. Once the money broker sells those drug dollars to Colombian importers or investors, or other money brokers, the money broker can transfer the funds simply by writing a check to the customer, or as otherwise directed by the customer.

     14. Some of the Targeted Accounts at BankAtlantic received thousands of such checks through “pouch deposits” made by couriers arriving from South America, addressed and delivered to the Account Manager. An analysis of pouch deposits into one such account revealed that over the course of four years, more than 4,000 checks were deposited in such manner, wherein most checks

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United States v. BankAtlantic
Statement of Facts

were written from only a handful of originator accounts. Many of the originator accounts were used for several years, with sequential check deposits covering every check issued against the originator account, starting with check number 100, then proceeding through months, or even years, to check numbers 101, 102, 103, etc., each written in large round dollar amounts, typically between $7,000 and $15,000. Upon detailed examination of the checks, the face of the checks frequently reveal that in many cases, the signature, the dollar amount, and the payee information were each written in different handwriting with different ink.

     15. The Targeted Accounts included the following characteristics which should have raised red flags at BankAtlantic:

a.	Accounts controlled by NRA’s, but held in the name of offshore shell corporations, particularly “bearer share” corporations, which are easily incorporated in such jurisdictions as the British Virgin Islands.
b.	Accounts controlled by domestic businesses that sell or export goods to South American customers, but generally receive payment from United States sources.
c.	Foreign MSBs that were determined to be unlicensed. Foreign MSBs operating by and through bank accounts in the United States must comply with the licensing requirements of the state where they maintain their bank account, as well as any applicable licensing requirements in their host country. Many states, including Florida, publish a list of licensed MSBs on the Internet. Many foreign countries, including Colombia, do the same. “Unlicensed” generally means unregulated. Domestic financial institutions should verify that foreign MSB customers have complied with the licensing requirements of their applicable jurisdictions, and be satisfied with the foreign MSB’s own anti-money laundering (“AML”) and know-your- customer (“KYC”) policies, procedures and controls.

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United States v. BankAtlantic
Statement of Facts

d.

Individual accounts held by NRAs and U.S. residents being used to transmit funds for unrelated persons. These accounts are easily identified by numerous unrelated sources of incoming and outgoing transfers by check and wire. Individuals operating such accounts may be considered to be MSBs and may be subject to the licensing requirements.

e.

Foreign MSBs — licensed — operating by and through offshore shell corporations. Several BankAtlantic NRA customers operated MSB accounts, but maintained the accounts in the name of offshore shell corporations. Account documentation established that the customers informed BankAtlantic, and that BankAtlantic personnel understood, that the customers were licensed foreign MSBs, but were operating in the name of offshore shell corporations to avoid “restrictive” foreign laws and regulations. Any foreign person or entity opening a domestic account in a manner designed to avoid foreign laws and regulations, or in a manner that makes it difficult to trace account transactions to the beneficial owner, should raise immediate red flags for the domestic bank maintaining such account. Transparency is essential for proper regulation of MSBs and any such business seeking secrecy and confidentiality should be sharply scrutinized.

BankAtlantic’s Failure to Identify and Report
Suspicious Activity in Targeted Accounts

     16. As noted, most of the Targeted Accounts were managed by a single BankAtlantic employee, the Account Manager, who was a BankAtlantic branch manager. There is no question that the Account Manager received adequate AML and BSA training; the Account Manager was well-versed and educated in money laundering techniques and risks, including the Black Market Peso Exchange, as well as the reporting requirements of the Bank Secrecy Act and its implementing regulations. The Account Manager was also very experienced in international private banking relationships and served on a critical anti-money laundering committee organized by BankAtlantic.

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United States v. BankAtlantic
Statement of Facts

     17. At the same time, the Account Manager was intimately familiar with the South American owners of the Targeted Accounts, having personally handled most of their major account transactions for several years. The Account Manager spent a significant amount of time discussing the Targeted Accounts and the transactions with the owners, and was intimately familiar with the nature of the owners’ businesses. Thus, the Account Manager was aware that the South American owners of the accounts were opening and controlling the accounts by and through the use of offshore shell corporations. The Account Manager understood that this arrangement was designed to avoid “restrictive” South American laws and regulations, particularly with respect to foreign currency exchange houses (casas de cambios).

     18. Although the Account Manager personally handled most of the suspicious transactions summarized above, including the receipt of hundreds of pouch deposits containing sequential and structured checks, the Account Manager failed to take any action to report the suspicious activity, as required by the Bank Secrecy Act.

     19. In 2002, BankAtlantic made a policy decision to close all MSB accounts held at BankAtlantic because of the high risks and costs associated with such accounts. The Account Manager actively participated in developing the bank’s program to identify and close all MSB accounts. Some of the Targeted Accounts were MSBs under the Account Manager’s supervision. The Account Manager closed the MSB Targeted Accounts, as directed by BankAtlantic management, but not before the Account Manager opened new accounts for the South American

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United States v. BankAtlantic
Statement of Facts

owners of the accounts under different account names. These Targeted Accounts were originally held under corporate names, but the Account Manager opened the new “spin off accounts” under individual names. The account activity in the spin off accounts remained largely identical to the activity in the previous accounts, yet the Account Manager continued to fail to report the activity. Indeed, soon after they were opened, the spin off accounts began receiving money originating from U.S. undercover law enforcement operations.

     20. Although the Account Manager failed to report the suspicious activity in the Targeted Accounts, and in fact concealed facts from bank management, the bank failed in its responsibility to maintain the required and necessary procedures and systems to independently identify and report suspicious activity. Serious and systemic AML and BSA compliance failures existed uncorrected at BankAtlantic for several years.

Anti Money Laundering Program Requirements

     21. Pursuant to Title 31, United States Code, Section 5318(h)(1) and 12 C.F.R. § 563.177(c), BankAtlantic was required to establish and maintain an anti-money laundering (AML) compliance program that, at a minimum: (a) provides internal policies, procedures, and controls designed to guard against money laundering; (b) provides for an individual or individuals to coordinate and monitor day-to-day compliance with the BSA and AML requirements; (c) provides for an ongoing employee training program; and (d) provides for independent testing for compliance conducted by bank personnel or an outside party.

     22. BankAtlantic was required pursuant to 31 U.S.C. § 5318(g), 31 C.F.R. § 103.18, and 12 C.F.R. § 563.177 and § 563.180 to file with the Department of Treasury a Suspicious Activity

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United States v. BankAtlantic
Statement of Facts

Report (“SAR”), in accordance with the form’s instructions, when it detected the type of activity described above in paragraphs 11 through 20. The requirement became effective on April 1, 1996. According to the form’s instructions, BankAtlantic was required to file a SAR with the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) no later than thirty (30) calendar days after the date of initial detection of facts that might have constituted a basis for filing a SAR.

     23. BankAtlantic is required pursuant to 31 C.F.R. § 103.18, which became effective on April 1, 1996, to report any transaction conducted or attempted by, at, or through the bank, if it involved or aggregated at least $5,000 in funds or other assets, and the bank knew, suspected, or had reason to suspect that:

(i) The transaction involved funds derived from illegal activities or was intended or conducted in order to hide or disguise funds or assets derived from illegal activities (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any federal law or regulation or to avoid any transaction reporting requirement under federal law or regulation.

(ii) The transaction was designed to evade any requirements promulgated under the Bank Secrecy Act.

(iii) The transaction had no business or apparent lawful purpose or was not the sort in which the particular customer would normally be expected to engage, and the bank knew of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.

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United States v. BankAtlantic
Statement of Facts

Know Your Customer Requirements

     24. OTS has advised^1/ its member banks, including BankAtlantic, that an effective KYC program should incorporate the following principles into the association’s business practices:

a.	Determine the true identity of all customers requesting services;
b.	Determine the customer’s source(s) of funds for transactions;
c.	Determine the particular customer’s normal and expected transactions;
d.	Monitor customer transactions to determine if they are consistent with the normal and expected transactions for that customer or for similar categories or classes of customers;
e.	Identify customer transactions that do not appear to be consistent with normal and expected transactions for that particular customer or for customers in similar categories or classes; and
f.	Determine if a transaction is unusual or suspicious and, if so, report those transactions.

BankAtlantic’s BSA Program Failures

     25. Although BankAtlantic’s Board of Directors formally approved a KYC policy in February 1999, bank records evidence that through 2004, this policy was not effectively implemented or enforced. In 2002, BankAtlantic’s internal auditors advised bank management that bank employees were failing to adequately collect KYC information in writing at the bank branches. The auditors found that bank employees would generally discuss KYC information with customers during the account opening process, but failed to reduce such information to writing or conduct the KYC process in a systematic manner. Little secondary review of customer KYC information was conducted to corroborate the information or ensure that it was complete, adequate or reliable.

     26. Despite enactment of the PATRIOT Act in 2001, which included additional mandatory KYC requirements (pursuant to implementing regulation 31 C.F.R § 103.121),

¹ See OTS Compliance Activities 400.5 (Dec.1999).

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United States v. BankAtlantic
Statement of Facts

BankAtlantic failed to correct the long-standing deficiencies in violation of 31 C.F.R. § 103.121(b)(2)(i)(A)(4)(i) and 31 C.F.R. § 103.121(b)(2)(i)(B).

BankAtlantic’s High-Risk Banking Operations

     27. Federal financial institution regulatory agencies, including OTS, have advised financial institutions that the nature and extent of their KYC and AML program depends upon the risks associated with the particular institution and its financial products. With respect to BankAtlantic’s operational profile, products, services and geographic location in South Florida, there is an inherent higher risk of money laundering that requires enhanced anti-money controls and customer due diligence when providing international private banking services.

     28. BankAtlantic’s own experience with high-risk banking began in 1995, when BankAtlantic acquired Miami-based MegaBank. Shortly after the acquisition, BankAtlantic’s internal audit controls identified suspicious activity within the MegaBank international operations. Upon detecting the suspicious activity, BankAtlantic immediately notified law enforcement. BankAtlantic fully cooperated with the Federal Bureau of Investigation, the U.S. Customs Service, and the U.S. Attorney for the Southern District of Florida in a long-term investigation that exposed hundreds of former-MegaBank accounts at BankAtlantic that were suspected of being used by money brokers operating out of Colombia to launder drug money. Law enforcement discovered that hundreds of the accounts (acquired in connection with the MegaBank acquisition) were being used by Colombian money launderers to deposit proceeds from the sale of illegal narcotics. Most of the drug money deposited into these accounts was sent through pouch deposits, made by independent

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United States v. BankAtlantic
Statement of Facts

couriers arriving from Colombia. The money laundering investigation concluded in 1996 with the seizure of the suspect accounts by law enforcement and the indictment and subsequent conviction of former MegaBank employees.

     29. Throughout the MegaBank investigation, BankAtlantic’s cooperation and assistance with law enforcement was exemplary. Further, at the conclusion of the investigation, BankAtlantic informed law enforcement that it was closing the MegaBank international banking operation. And in fact, BankAtlantic appeared to follow through with that stated intent, by physically closing the branch where the MegaBank international operation was conducted.

     30. Although BankAtlantic had in fact closed down the MegaBank international banking operation in 1996, it opened a new branch in Miami in 1997 which catered in part to international high income/net worth clients, some of which were inherently high risk clients. This new branch was managed by a single bank employee, the above mentioned Account Manager, and was given the name International Private Banking.

     31. Although BankAtlantic’s private banking department would not today be subject to the enhanced due diligence requirements of Section 312 of the USA PATRIOT Act (because the bank did not require a $1 million minimum balance for the accounts), Federal regulators have for many years counseled banks to use extreme caution in maintaining a private banking operation. Because of the higher risk of money laundering associated with such accounts, and the close relationship between private banking customers and the “relationship managers,” regulators have urged banks to exercise increased diligence to monitor private banking transactions, independent of the private banking department. For example, on June 30, 1997, the Federal Reserve issued

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United States v. BankAtlantic
Statement of Facts

Supervisory Letter SR 97-19 (SUP), which outlined the essential elements associated with sound private banking activities, to include:

a.	Management Oversight. Active oversight by senior management; senior management must be proactive in overseeing compliance with corporate policies and procedures.
b.	Policies and Procedures. Private banking should have its own written KYC policies and procedures that identifies the customer, the source of wealth and lines of business, references, referrals; and systems in place to identify red flags and suspicious transactions.
c.	Risk Management Practices and Monitoring Systems. Private banking departments should retain documentation on their clients, and exercise due diligence to corroborate information provided by the customer, including beneficial ownership information by offshore entities; bank’s must maintain independent monitoring systems to allow the bank to analyze and manage the private banking department and monitor accounts for suspicious activities.
d.	Segregation of Duties, Compliance, and Audit. Banks must have an effective system of oversight by senior managers and board committees, as well as guidelines requiring segregation of duties to prevent the unauthorized waiver of documentation requirements, poorly documented referrals, and overlooked suspicious activities. Strong compliance and internal audit programs are essential.

BankAtlantic’s regulator, OTS, has published similar guidelines.^2/

     32. BankAtlantic failed to effectively address these critical AML and KYC areas. BankAtlantic management failed to manage private banking as a separate and unique entity and activity or oversee private banking’s compliance with BankAtlantic policies and procedures. Nearly the entire portfolio of private banking accounts was managed exclusively by a single officer.

² See, e.g., OTS Trust Activities Handbook, Section 740 (July 2001).

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United States v. BankAtlantic
Statement of Facts

Although senior managers outside of private banking were available to resolve specific problems brought to their attention, insufficient supervision or control was provided. Management reports and summaries provided bottom line statistics reflecting low cost deposit growth, but most private banking data was merged with non-private banking activity and was not independently reviewed and monitored by management or internal auditors.

     33. From 1997 to 2004, private banking operations were audited just once in year 2000 by BankAtlantic internal auditors, but even then, without any transactional testing or review for AML and BSA compliance concerns. Consequently, BankAtlantic’s private banking operation functioned without comprehensive procedures, reviews, and internal controls addressing risks associated with these clients.

Monitoring of Suspicious Transactions

     34. BankAtlantic failed to use KYC information, or any other profile information, to monitor account transactions, one of the major purposes of the KYC data collection effort. Many of the Targeted Accounts discussed above were the subject of SARs filed by other financial institutions, which generally handled correspondent transactions to and from the Targeted Accounts. These financial institutions were filing SARs on transactions affecting the Targeted Accounts, usually reporting a pattern of suspicious international wire transfers to and from offshore corporations, particularly money service businesses based in South America and other high-risk jurisdictions, and individuals located in South Florida by and through the Targeted Accounts. These banks typically employed advanced anti-money laundering software programs that evaluate risk by the type of entity involved, the geographical location of the entity, and the nature of the financial transaction in question, among other factors.

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United States v. BankAtlantic
Statement of Facts

     35. With respect to each of the Targeted Accounts, no SARs were filed, nor was law enforcement otherwise notified, until well after this investigation became known to bank management. Through 2004, BankAtlantic had limited ability to systematically monitor a customer’s transactions for money laundering or other criminal activities. Branch employees were generally trained to identify and report suspicious activity, but BankAtlantic had little ability to identify suspicious activity not directly observed and reported by an individual branch employee. For example, BankAtlantic’s wire room operation had no procedures to monitor for suspicious wire transfer activity, including the ability to monitor wire transfers executed by customers over the Internet. BankAtlantic had limited system-wide ability (beyond individual branch employees) to monitor or identify structured cash deposits intended to avoid scrutiny by law enforcement. A review of cash deposits at BankAtlantic between January 2003 and January 2005 identified more than $80 million in suspicious structured cash deposits into dozens of accounts (structured deposits of slightly less than $10,000 each day designed to avoid the cash transaction reporting requirements of the BSA).

BankAtlantic’s Remedial Actions

     36. Throughout this investigation, BankAtlantic’s cooperation with law enforcement and regulators has been extraordinary. Immediately upon learning of the criminal investigation, BankAtlantic devoted considerable resources to assist the government’s investigation, terminated the employment of culpable employees, including the Account Manager, and identified, reported, and ultimately closed accounts used to process suspicious transactions, including each of the Targeted

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United States v. BankAtlantic
Statement of Facts

Accounts. BankAtlantic also took significant steps to correct the identified BSA and AML deficiencies, including:

a.	Contracted with AML and BSA compliance experts from a major accounting and consulting firm to: (1) assist BankAtlantic in conducting a comprehensive audit of BankAtlantic’s BSA and AML programs; (2) conduct a “look-back” analysis of accounts and transactions, including a detailed review of all private banking accounts, and to file SARs where appropriate; and (3) make recommendations for restructuring BankAtlantic’s BSA and AML compliance programs, including the development of enhanced BSA and AML polices and procedures.
b.	Created a new BSA and AML department, currently staffed by more than 45 full-time employees, who are exclusively engaged in BSA and AML compliance.
c.	Implemented enhanced personnel training programs for BSA and AML compliance.
d.	Purchased, developed and implemented advanced anti-money laundering systems and software.
e.	Replaced its existing internal BSA and AML audit function with an independent BSA and AML auditor that exclusively examines, tests, and reports on BSA and AML compliance areas.

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Black Market Peso Exchange

     1. The Black Market Peso Exchange (“BMPE”) is a trade-based money laundering system through which Colombian money brokers facilitate a non-regulated currency exchange of United States dollars for Colombian pesos. Colombian drug traffickers hold large quantities of United States dollars — derived from retail drug trafficking in the United States — that they need to convert into local currency for use in Colombia. At the same time, Colombian and other South American businesses often seek United States dollars to pay for “imported” goods or services from an unregulated exchange, so that they can avoid government scrutiny, import duties, sales taxes, and income taxes, red tape, and the often less-favorable exchange rates associated with the formal currency exchange mechanisms.

     2. For example, under Colombian foreign exchange laws, a Colombian who needs to purchase United States currency to pay for imports is legally required to do this through the “regulated” or “formal” currency exchange market. Accordingly, non-financed, United States dollar payments for goods imported into Colombia must occur by one of three methods: (1) transactions through Colombian financial institutions regulated by the Banco de la República; (2) transactions through formal currency exchange houses licensed by the Superintendencia Bancaria to engage in international currency transfers; or (3) transactions from a dollar denominated account at a foreign bank, called a “Cuenta Corriente de Compensación” (current compensation account) that is registered in the importer’s name with the Banco de la República.

     3. All dollar payments for imported goods on the formal exchange market are supposed to be reported to the Banco de República and the Direccion de Impuestos y Aduanas Nacionales (“DIAN”), which is the Colombian customs and taxing authority. The legitimacy of

all payments for all import goods is corroborated through formal declarations that must be filed with the banks and are forwarded to the DIAN. In theory, these declarations should match, dollar for dollar, the declared value of the imported goods, as stated on the Colombian customs entry documents for those goods, which are also retained by the DIAN. Although Colombians can legally purchase United States currency on the so called “non-regulated,” “free,” or “parallel” currency exchange market for such things as personal use, travel, and minor personal investments, they cannot use the parallel exchange market to purchase United States dollar payments for imported goods. However, many Colombian businesses do not pay for imports using the formal exchange markets and, instead, use the parallel market to pay for imports.

     4. That Colombian businesses are required to use the formal currency exchange market for import and export activities is common knowledge in Colombia. Nonetheless, these legal requirements are often circumvented by businesses which, for the most part, introduce goods into Colombia by under-reporting the true value of imported goods or by importing the goods into Colombia without reporting them. These Colombian businesses usually have to pay for their goods with United States dollars, but they obtain such dollars on the parallel exchange market, thereby avoiding the reporting requirements of the formal exchange market and disguising the evasion of customs duties, sales taxes, and income taxes. The portion of the parallel exchange market that caters to this is referred to as the “black” currency exchange market. The currency transactions are deemed “black” for two reasons. First, they are designed to promote and disguise these widespread smuggling operations and the related tax evasion. Second, a significant source of “unregulated” dollars in Colombia and other South American countries is drug trafficking. That dollar

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payments for smuggled goods in Colombia and other South American countries can come from drug trafficking activity is common knowledge in Colombia, as well as in Latin America and Carribean countries that export goods to Colombia.

     5. Having set forth the reasons why imported goods and foreign services are often paid for with drug proceeds, the next step is to explain how those drug proceeds end up in the bank accounts of United States exporters and other foreign entities that sell goods and services in Colombia. In the typical BMPE currency exchange transaction, a BMPE money broker meets with Colombian drug traffickers who hold large amounts of retail drug proceeds in the form of United States dollars in the United States and other places. These drug proceeds may be waiting in stash-houses or have already been laundered into the United States financial system by the drug trafficking organizations. The BMPE broker agrees to purchase drug dollars from the drug traffickers with Colombian pesos at a heavily discounted exchange rate. The BMPE broker then finds Colombian or other South American customers — usually businesses that seek United States dollars to pay for imports or other foreign services — and sells the Colombian or South American customers the right to use the drug dollars. The broker negotiates a dollar/peso exchange rate with his Colombian and South American customers at rates lower than the formal currency exchange market rates, but higher than the broker paid for the dollars. The Colombian and South American customers inform the broker where the United States dollars purchased need to be delivered. This information is passed on to a money laundering organization in the United States or elsewhere that executes the delivery.

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     6. In the typical BMPE transaction involving drug proceeds, the purchased drug proceeds will be wire transferred to the bank account of a United States or foreign company that sold goods or services to the broker’s Colombian or South American customer. Once the United States dollars are delivered to their United States or foreign destination, the broker gives his Colombian or other South American customers proof the dollars were sent (e.g., copies of the United States dollar wire transfer requests or confirmations). The Colombian or other South American customers pay the broker the equivalent in Colombian pesos at the previously negotiated exchange rate. In turn, the broker transfers any pesos he receives from his customers to the drug trafficking organization that sold him the United States dollars, and the broker retains the profit he made on the exchange transactions.

     7. Thus, without using any formal legal currency exchange mechanism, drug traffickers exchange the drug dollars they own in the United States and elsewhere for Colombian pesos they can spend in Colombia. On the other side of the transaction, again without using any formal legal currency exchange mechanism, Colombian or other South American businesses exchange pesos for United States dollar payments that originate in the United States to pay for the purchase of goods imported into Colombia or other South American countries or to pay for services from foreign companies.

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EX-10.2

Exhibit 10.2

UNITED STATES OF AMERICA
DEPARTMENT OF THE TREASURY
FINANCIAL CRIMES ENFORCEMENT NETWORK

IN THE MATTER OF:	)
	)
	)
	)	Number 2006-3
BANKATLANTIC	)
FORT LAUDERDALE, FLORIDA	)
	)

ASSESSMENT OF CIVIL MONEY PENALTY

I. INTRODUCTION

     Under the authority of the Bank Secrecy Act and regulations issued pursuant to that Act,¹ the Financial Crimes Enforcement Network has determined that grounds exist to assess a civil money penalty against BankAtlantic, Fort Lauderdale, Florida (“BankAtlantic” or “Bank”). To resolve this matter, and only for that purpose, BankAtlantic has entered into a CONSENT TO THE ASSESSMENT OF CIVIL MONEY PENALTY (“CONSENT”) without admitting or denying the determinations by the Financial Crimes Enforcement Network, as described in Sections III and IV below, except as to jurisdiction in Section II below, which is admitted.

     The CONSENT is incorporated into this ASSESSMENT OF CIVIL MONEY PENALTY (“ASSESSMENT”) by this reference.

II. JURISDICTION

     BankAtlantic is a savings association headquartered in Fort Lauderdale, Florida, with 74 branches located in seven Florida counties. BankAtlantic was established in 1952 and acquired Mega Bank of Miami in 1995, Bank of North America of Fort Lauderdale in 1996, and Community Savings, F.A. of North Palm Beach in 2002. As of September 30, 2005, BankAtlantic had over $6 billion in total assets and $55 million in net income. The Office of Thrift Supervision examines BankAtlantic for compliance with the Bank Secrecy Act and its implementing regulations.

     At all relevant times, BankAtlantic was a “financial institution” and a “bank” within the meaning of the Bank Secrecy Act and the regulations issued pursuant to the Act.²

1	31 U.S.C. § 5321 and 31 C.F.R. § 103.57.
2	31 U.S.C. § 5312(a)(2) and 31 C.F.R. § 103.11.

2

III. DETERMINATIONS

A. Summary

     BankAtlantic failed to implement an adequate Bank Secrecy Act compliance program, including an anti-money laundering program with internal controls and other measures to detect and report potential money laundering and other suspicious activity.

     BankAtlantic operates a substantial wire transfer department that facilitated over 100,000 incoming and outgoing funds transfers annually since 2001. BankAtlantic’s primary market, South Florida, is designated both as a High Intensity Money Laundering and Related Financial Crime Area and a High Intensity Drug Trafficking Area. One Branch of the Bank catered to high income/net worth clients including many nonresident aliens, offshore businesses, consulates and politically exposed persons about which BankAtlantic had not sufficiently gathered or verified information. Despite the heightened risk, BankAtlantic conducted business without effective systems and controls, as appropriate and practical, to detect and timely report suspicious activity.

     The Bank’s geographic location, potentially high-risk customers and product lines and funds transfer operations required measures to control the risk of money laundering and other financial crimes. Nevertheless, BankAtlantic processed funds transfers without systems and controls reasonably designed to manage the risk of money laundering and ensure compliance with the Bank Secrecy Act. BankAtlantic failed to conduct adequate independent testing and did not effectively respond to, or take corrective actions to address, adverse audit findings. The designated Bank Secrecy Act officer at BankAtlantic failed to coordinate and monitor day-to-day compliance with the Bank Secrecy Act. BankAtlantic also failed to provide adequate training to applicable personnel to ensure compliance with the Bank Secrecy Act. In view of the Bank’s transaction volume, geographic reach, customer base, and other risk considerations, BankAtlantic failed to comply with its obligations under the Bank Secrecy Act and the regulations issued pursuant to that Act. BankAtlantic’s failure to comply with the Bank Secrecy Act was serious, longstanding and systemic. Failures in internal controls and independent testing led, in turn, to a failure on the part of BankAtlantic to timely report suspicious transactions.

B. Violations of the Requirement to Implement an Anti-Money Laundering Program

     The Financial Crimes Enforcement Network has determined that BankAtlantic violated the requirement to establish and implement an adequate anti-money laundering program. Since April 24, 2002, the Bank Secrecy Act and its implementing regulations have required savings associations to establish and implement anti-money laundering programs.³ The anti-money laundering program of BankAtlantic meets these requirements if the program conforms to rules of the Office of Thrift Supervision that govern anti-money laundering programs. Since 1989, the Office of Thrift Supervision has required a program reasonably designed to assure and monitor compliance with reporting and record keeping requirements under the Bank Secrecy Act.⁴

3	31 U.S.C. § 5318(h)(1) and 31 C.F.R. § 103.120.
4	12 C.F.R. § 563.177(b).

3

     Reporting requirements under the Bank Secrecy Act include the requirement to report suspicious transactions.⁵ The Office of Thrift Supervision also requires that an anti-money laundering program contain the following elements: (1) a system of internal controls; (2) independent testing for compliance; (3) the designation of an individual, or individuals, to coordinate and monitor day-to-day compliance; and (4) training of appropriate personnel.⁶

          1. Internal Policies, Procedures and Controls

     BankAtlantic failed to implement a system of internal controls reasonably designed to comply with the Bank Secrecy Act and manage the risk of money laundering. In fact, it was not until Federal authorities requested extensive information in early 2004 related to BankAtlantic’s anti-money laundering program that the Bank’s management began to implement measures to adequately assess the quality of its compliance with the Bank Secrecy Act.

     Through the early part of 2004, BankAtlantic’s anti-money laundering program did not effectively address critical elements of the Bank Secrecy Act, particularly suspicious activity reporting. BankAtlantic did not have adequate, enterprise-wide transaction monitoring procedures to detect and report suspicious activities, including money laundering. As a result, BankAtlantic failed to timely file a significant number of suspicious activity reports.

     BankAtlantic’s lack of internal controls with respect to Bank Secrecy Act compliance is further evidenced by deficiencies noted in its subpoena handling process, wire transfer operations, and areas of the Bank that catered to high income/net worth clients, including many nonresident aliens, offshore businesses, consulates and politically exposed persons. In addition, BankAtlantic had inadequate policies and procedures in place to assure compliance with the Customer Identification Program.⁷

     Prior to the early part of 2004, BankAtlantic had no procedures or controls to ensure a comprehensive review of subpoenaed accounts for potential money laundering and subsequent filing of suspicious activity reports. The individual responsible for responding to subpoenas received by BankAtlantic had no direct supervision to assure compliance with the Bank Secrecy Act in regard to the receipt of subpoenas.

     BankAtlantic did not have adequate systems to monitor wire transfer operations for compliance with the suspicious activity reporting requirements of the Bank Secrecy Act, despite repeated audit recommendations on this matter. Furthermore, through early 2004, BankAtlantic did not have effective systems and controls, as appropriate and practical, to detect suspicious activities related to wire transfers or multi-day cash structuring. The Bank also lacked adequate policies and procedures to create and utilize risk matrices and customer profiles for accountholders to ensure compliance with the Bank Secrecy Act. Between 2001 and 2004, BankAtlantic transacted over 690,000 incoming and outgoing wire transfers. During this time, the average number of combined incoming and outgoing wires processed per day doubled from about 500 to over 1,000. Despite the volume, BankAtlantic had no automated system, or even an

5	31 C.F.R. § 103.18.
6	12 C.F.R. § 563.177(c).
7	31 C.F.R. § 103.121(b).

4

effective manual process, in place to monitor or analyze the wire transfer department for potential money laundering activity and compliance with the Bank Secrecy Act. Furthermore, the Bank lacked adequate automated systems for account or transaction monitoring. For example, systems in place at the time were unable to capture, as appropriate and practical, the geographical locations that funds were sent to, or received from, without reviewing individual wire transfers. Based on available information, the Bank did not begin to effectively implement a system designed to capture data for monitoring for suspicious transactions until the later part of early 2004.

     One Branch of the Bank catered to a client portfolio of high income, high net worth persons, including many nonresident aliens, offshore businesses, consulates and politically exposed persons. Despite the elevated risk, BankAtlantic had not gathered or verified customer information in an adequate manner. Some of the customers in this portfolio conducted extensive international wire transfers to, or from, high-risk jurisdictions and were the focus of numerous Federal investigations known to BankAtlantic over an extended period of time. Examples of the Bank’s inadequate internal controls included:

• ability of employees to authorize large dollar value wire transfers without adequate oversight;

• failure to detect and report suspicious transactions conducted by foreign unlicensed money services businesses;

• lack of adequate procedures to gather and verify due diligence information on high-risk clients;

• lack of risk analysis associated with high-risk clients, many of which were nonresident aliens or offshore businesses located in high-risk jurisdictions;

• lack of oversight for pouch activity containing deposits which originated both domestically and internationally; and

• loss of “mail logs” for 2002 and 2003, which contained valuable transaction and identifying information on pouch deposits received from high-risk clientele.

          2. Independent Testing

     BankAtlantic’s program for independent testing was materially deficient and could not assure compliance with the Bank Secrecy Act. The scope of BankAtlantic’s audit function was insufficient to assess the adequacy of the anti-money laundering program on an enterprise-wide basis. Furthermore, auditors did not consistently follow-up on prior findings to determine whether corrective action had been taken on certain aspects of the Bank Secrecy Act/anti-money laundering program at BankAtlantic. More importantly, Bank management did not follow-up on, or institute effective corrective action, in response to findings of significant deficiencies identified in the audits. Appearing below is a summary of the deficient audit scope and repeated failures, on the part of both Bank management and the audit function, to follow-up on Bank Secrecy Act audit findings:

• BankAtlantic’s internal audit dated March 2000 rated the Branch of the Bank catering to high income/net worth clients to be unsatisfactory from an operations standpoint, yet the “private banking” component of this Branch was rated

5

satisfactory one month later by the same audit personnel. The scope of the “private banking” audit included a review of a newly opened account that was later deemed to be a significant source of suspected money laundering activity. No concerns were noted during the audit regarding this account. In addition, it was not until after Federal authorities began inquiring in early 2004 that any follow-up reviews of the “private banking” function at this Branch were performed.

• The July 2001 Bank Secrecy Act audit focused on procedures and training but did not address operational risks. Significant findings included recommendations to revise training materials and to conduct subsequent, ongoing training of applicable staff.

• The Bank Secrecy Act audit of July 2002 found that the Bank needed to:

• identify and monitor high-risk accounts for suspicious deposits and wire transfers;

• improve Know Your Customer processes related to foreign customers; and

• develop and document Bank Secrecy Act procedures especially related to monitoring of high-risk accounts.

• The October 2003 Bank Secrecy Act audit rated BankAtlantic’s compliance with Bank Secrecy Act regulations as satisfactory. However, the audit recommended that the Bank’s monitoring of transactions for money laundering needed improvement. Specifically, the audit determined that the Bank’s core systems had no capabilities for automated account or transaction monitoring. For example, the Bank’s systems were unable to capture source of funds, business activity descriptions and expected account activity for monitoring purposes. It was not until late 2004 that the Bank began implementing a system designed to effectively capture data for monitoring purposes. The audit also indicated that the Bank needed to add procedures to its anti-money laundering program to address customer profiles, monitoring of account activity and risk grading customer activity.

• In early 2004, an independent external firm performed an audit of Bank Secrecy Act issues associated with the Bank’s inability to adequately monitor wire transfer activity. The auditors indicated that the Bank had no automated ability, via its software programs, to systemically monitor wire activity. The audit took into account the volume of wire transfer activity, noting over 17,000 incoming and outgoing wires, totaling over $4 billion in the month of March 2004. The audit noted that suspicious activity reports were being submitted from all areas of the Bank except the wire transfer department. The report also recommended specific policy and procedures enhancements, mostly related to the Bank’s Customer Identification Program.

• After inquiries from Federal authorities in early 2004, BankAtlantic’s auditors initiated a complete review of accounts held at the Branch catering to high

6

income/net worth persons. This review revealed many accounts with multiple business relationships, high activity volumes and other indicia of potential suspicious activity. The review also noted the absence of certain Know Your Customer documentation for many of these account relationships. The missing documentation, together with the lack of systems and controls to detect transaction anomalies, illustrates the Bank’s failure to implement an adequate anti-money laundering program to manage the risk of money laundering and ensure compliance with the Bank Secrecy Act.

• In July 2004, BankAtlantic engaged an external firm to conduct a review of the Bank’s Bank Secrecy Act/anti-money laundering risk profile, perform a historical account review to identify suspicious activity, assess polices and procedures and provide guidance on choosing an adequate anti-money laundering software program. The historical account review of the Branch catering to high income/net worth clients found suspicious account activity that previously went undetected. For example, one account with a history of transactions suggesting money laundering activity was identified, and it was concluded that some of the activity in this account may have involved the Black Market Peso Exchange due to wire transfer activity involving Mexican casa de cambios. The review concluded with recommendations to enhance BankAtlantic’s internal controls, policies and procedures, identification of high-risk accounts and training.

     As noted above, multiple audits conducted through early 2004 identified the Bank’s lack of adequate monitoring of wire activity and its failure to adequately identify and monitor high-risk accounts and activities for potential money laundering and Bank Secrecy Act compliance. Despite repeated audit recommendations, BankAtlantic did not begin to effectively respond until the early part of 2004, after receiving inquiries about the Bank’s anti-money laundering program from Federal authorities. The Bank’s inadequate audit scope together with management’s failure to effectively respond to adverse audit findings in a timely, comprehensive manner resulted in a deficient independent testing function.

          3. The Designation of an Individual to Coordinate and Monitor Day-To-Day Compliance with the Bank Secrecy Act

     The designated Bank Secrecy Act compliance officer at BankAtlantic failed to ensure compliance with the Bank Secrecy Act, on an enterprise-wide basis. This is further evidenced by adverse audit findings with respect to adequate staffing and oversight for Bank Secrecy Act compliance, particularly in the wire department, transaction monitoring function and a Branch engaged in higher risk activities. The failure of the designated Bank Secrecy Act compliance officer to monitor and coordinate compliance, on an enterprise-wide basis, resulted in an ineffective anti-money laundering program.

          4. Training

     BankAtlantic failed to provide adequate training of appropriate personnel to ensure compliance with the requirements of the Bank Secrecy Act. For example, the individual

7

responsible for responding to subpoenas received by BankAtlantic had no formal Bank Secrecy Act compliance training, or direct supervision, to assure compliance with the Bank Secrecy Act in regard to the receipt of subpoenas. Furthermore, as stated above, the Bank’s audit function recommended in July 2001 that Bank Secrecy Act/anti-money laundering training be revised and conducted for all applicable departments and employees. However, it was not until late 2004 that BankAtlantic had an external consultant provide the Board with comprehensive Bank Secrecy Act/anti-money laundering training that the Bank, in turn, rolled out to all applicable staff.

C. Violations of the Requirement to Report Suspicious Transactions

     The Financial Crimes Enforcement Network has determined that BankAtlantic violated the suspicious transaction reporting requirements of the Bank Secrecy Act and regulations issued pursuant to that Act. These reporting requirements impose an obligation on financial institutions to report transactions that involve or aggregate to at least $5,000, are conducted by, at, or through the financial institution, and that the institution “knows, suspects, or has reason to suspect” are suspicious.⁸ A transaction is “suspicious” if the transaction: (1) involves funds derived from illegal activities, or is conducted to disguise funds derived from illegal activities; (2) is designed to evade the reporting or record keeping requirements of the Bank Secrecy Act or regulations under the Bank Secrecy Act; or (3) has no business or apparent lawful purpose or is not the sort in which the customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including background and possible purpose of the transaction.⁹

     Financial institutions must report suspicious transactions by filing suspicious activity reports and must generally do so no later than thirty (30) calendar days after detecting facts that may constitute a basis for filing such reports.¹⁰ If no suspect was identified on the date of detection, a financial institution may delay the filing for an additional thirty (30) calendar days in order to identify a suspect, but in no event may the financial institution file a suspicious activity report more than sixty (60) calendar days after the date of initial detection.¹¹

     BankAtlantic violated the suspicious transaction reporting requirements of 31 U.S.C. § 5318(g) and 31 C.F.R. § 103.18 by failing to timely file a substantial number of suspicious activity reports. BankAtlantic processed funds transfers for originators or beneficiaries that exhibited characteristics and patterns commonly associated with money laundering, including the nature of business, high-risk geographic locations of the originator and/or beneficiary, and transaction activity that was inconsistent with the normal and expected transactions for similar customers. The absence of effective internal controls, training, designated personnel and independent testing at BankAtlantic resulted in numerous violations of the requirement to timely report suspicious transactions. After responding to supervisory authorities, a sharp increase in the Bank’s suspicious activity report filings was noted. In fact, the average number of suspicious activity report filings made by BankAtlantic rose to 114 per month, for the third quarter of 2005,

8	31 C.F.R. § 103.18(a)(2).
9	31 C.F.R. § 103.18(a)(2)(i) through (iii).
10	31 C.F.R. § 103.18.
11	31 C.F.R. § 103.18(b)(3).

8

in contrast to 11 per month for the first quarter of 2004. For the 22 month period between January 1, 2004 and October 31, 2005, the Bank filed 1,124 suspicious activity reports. Based on analysis by the Financial Crimes Enforcement Network, 369 of these reports were filed on a delinquent basis. The resulting delays impaired the usefulness of the suspicious activity reports by not providing law enforcement with more timely information related to over $189 million in suspicious transactions.

IV. CIVIL MONEY PENALTY

     Under the authority of the Bank Secrecy Act and the regulations issued pursuant to that Act,¹² the Financial Crimes Enforcement Network has determined that a civil money penalty is due for violations of the Bank Secrecy Act and the regulations issued pursuant to that Act and described in this ASSESSMENT.

     Based on the seriousness of the violations at issue in this matter, and the financial resources available to BankAtlantic, the Financial Crimes Enforcement Network has determined that the appropriate penalty in this matter is $10,000,000.00.

V. CONSENT TO ASSESSMENT

     To resolve this matter, and only for that purpose, BankAtlantic, without admitting or denying either the facts or determinations described in Sections III and IV above, except as to jurisdiction in Section II, which is admitted, consents to the assessment of a civil money penalty against it in the amount of $10,000,000.00. This penalty assessment shall be concurrent with the $10,000,000.00 penalty assessed against BankAtlantic by the Office of Thrift Supervision and the $10,000,000.00 forfeiture to the Department of Justice. The penalty assessments of the Financial Crimes Enforcement Network and the Office of Thrift Supervision shall be satisfied by the $10,000,000.00 forfeiture to the Department of Justice.

BankAtlantic recognizes and states that it enters into the CONSENT freely and

     voluntarily and that no offers, promises, or inducements of any nature whatsoever have been made by the Financial Crimes Enforcement Network or any employee, agent, or representative of the Financial Crimes Enforcement Network to induce BankAtlantic to enter into the CONSENT, except for those specified in the CONSENT.

     BankAtlantic understands and agrees that the CONSENT embodies the entire agreement between BankAtlantic and the Financial Crimes Enforcement Network relating to this enforcement matter only, as described in Section III above. BankAtlantic further understands and agrees that there are no express or implied promises, representations, or agreements between BankAtlantic and the Financial Crimes Enforcement Network other than those expressly set forth or referred to in this document and that nothing in the CONSENT or in this ASSESSMENT is binding on any other agency of government, whether federal, state, or local.

VI. RELEASE

¹² 31 U.S.C. § 5321 and 31 C.F.R. § 103.57.

9

     BankAtlantic understands that its execution of the CONSENT, and compliance with the terms of this ASSESSMENT and the CONSENT, constitute a complete settlement of civil liability for the violations of the Bank Secrecy Act and regulations issued pursuant to that Act described in the CONSENT and this ASSESSMENT.

By:	/s/ Robert W. Werner
	Robert W. Werner, Director
	FINANCIAL CRIMES ENFORCEMENT NETWORK U. S. Department of the Treasury Date: April 26, 2006

10

EX-10.3

Exhibit 10.3

UNITED STATES OF AMERICA
Before The
OFFICE OF THRIFT SUPERVISION

______________________________

	)
In the Matter of	)	Order No.:
	)
BankAtlantic	)	Date:
Fort Lauderdale, Florida	)
	)
OTS Docket No.: 05551	)
	)

______________________________

STIPULATION AND CONSENT TO THE ISSUANCE OF AN
ORDER TO CEASE AND DESIST FOR AFFIRMATIVE RELIEF
AND ASSESSMENT OF A CIVIL MONEY PENALTY

     WHEREAS, the Office of Thrift Supervision (OTS), based upon information derived from the exercise of its regulatory responsibilities, is of the opinion that grounds exist to initiate an administrative cease and desist proceeding for affirmative relief and to assess civil money penalties against BankAtlantic, Fort Lauderdale, Florida, OTS Docket No. 05551 (BankAtlantic or Bank), pursuant to Section 8(b) and (i) of the Federal Deposit Insurance Act (FDIA), 12 U.S.C. § 1818(b) and (i),¹ and

     WHEREAS, BankAtlantic desires to cooperate with the OTS and to avoid the time and expense of such administrative proceeding, and

     WHEREAS, BankAtlantic enters into this Stipulation and Consent to the Issuance of an Order to Cease and Desist for Affirmative Relief and Assessment of a Civil Money Penalty (Stipulation) (i) without any adjudication on the merits, (ii) without admitting or denying that grounds exist to initiate an administrative cease and desist proceeding, (iii) without admitting or

¹ All references to the United States Code (U.S.C.) are as amended, unless otherwise indicated.

denying the Findings of Fact, except as to Jurisdiction (Paragraph 1 below), which jurisdiction is admitted, and (iv) solely for the purpose of settling this matter in accordance with Rule 408 of the Federal Rules of Evidence and equivalent state provisions.

     NOW, THEREFORE, on these premises, BankAtlantic hereby stipulates and agrees as follows:

1. Jurisdiction.

a.

BankAtlantic is a “savings association” within the meaning of Section 3(b) of the FDIA, 12 U.S.C. § 1813(b), and Section 2(4) of the Home Owners’ Loan Act (HOLA), 12 U.S.C. § 1462(4). Accordingly, BankAtlantic is an “insured depository institution” as that term is defined in Section 3(c) of the FDIA, 12 U.S.C. § 1813(c).

b.

Pursuant to Section 3(q) of the FDIA, 12 U.S.C. § 1813(q), the Director of the OTS is the “appropriate Federal banking agency” with jurisdiction to maintain an administrative cease and desist proceeding against such a savings association. Therefore, the Bank is subject to the jurisdiction of the OTS to initiate and maintain a cease and desist proceeding and civil money penalty assessment proceeding against it pursuant to Section 8(b) and (i) of the FDIA, 12 U.S.C. § 1818(b) and (i). The Director of the OTS has delegated to the Regional Director of the Southeast Region of the OTS or his/her designee (Regional Director) the authority to issue cease and desist orders and civil money penalty assessment orders where the savings association has consented to the issuance of the orders.

BankAtlantic C&D Stipulation

2

2. OTS Findings of Fact.

     The OTS finds that the Bank has violated various laws and regulations to which the Bank is subject, as outlined in detail in the OTS’s December 16, 2004 Report of Examination of BankAtlantic (2004 Examination). Such violations include violations of the Currency and Foreign Transactions Reporting Act, as amended by the USA Patriot Act and other laws (the Bank Secrecy Act or BSA);² the related BSA regulations issued by the U. S. Department of the Treasury, 31 C.F.R. Part 103, and the OTS, 12 C.F.R. § 563.177; and the OTS regulations governing suspicious activity reports (SAR) and other reports and statements set forth in 12 C.F.R. § 563.180.

     BankAtlantic has undertaken corrective action, including the adoption and implementation of a BSA Corrective Action Plan during November 2004 and the submission of a corrective action response, dated August 12, 2005, that set forth the Bank’s detailed responses and corrective actions to address the deficiencies, weaknesses and regulatory violations noted in the 2004 Examination. The Bank also has conducted an extensive review of historical account transaction activity, using a qualified external firm, and has made appropriate SAR filings on the basis of that review. The Bank has taken steps to comply with applicable laws and regulations and to address the identified deficiencies. Notwithstanding the Bank’s corrective actions, the OTS is of the opinion that a cease and desist order for affirmative relief and a civil money penalty assessment are necessary and appropriate to address the violations, deficiencies, and weaknesses discussed in the 2004 Examination, and to ensure that the Bank continues the corrective actions taken and that such actions remain adequate to provide for the Bank’s future compliance with the BSA, SAR, and OFAC laws and regulations.

² 31 U.S.C. § 5311 et seq.

BankAtlantic C&D Stipulation

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3. Consent.

     BankAtlantic consents to the issuance by the OTS of the accompanying Consent Order to Cease and Desist for Affirmative Relief (C&D Order) and Order of Assessment of a Civil Money Penalty (CMP Order) (collectively, the Orders). The Bank further agrees to comply with the terms of the Orders upon issuance and stipulates that the Orders comply with all requirements of law.

4. Finality.

     The C&D Order is issued under the provisions of Section 8(b) of the FDIA, 12 U.S.C. § 1818(b). The CMP Order is issued under the provisions of Section 8(i) of the FDIA, 12 U.S.C. § 1818(i). Upon their issuance by the Regional Director, they shall be final orders, effective and fully enforceable by the OTS under the provisions of Section 8(i) of the FDIA, 12 U.S.C. § 1818(i).

5. Waivers.

     BankAtlantic waives the following:

a.	the right to be served with any written notice of the OTS’s charges against it as provided by Section 8(b) and (i) of the FDIA, 12 U.S.C. § 1818(b) and (i);
b.	the right to an administrative hearing of the OTS’s charges against it as provided by Section 8(b) and (i) of the FDIA, 12 U.S.C. § 1818(b) and (i);
c.	the right to seek judicial review of the Orders including, without limitation, any such right provided by Section 8(h) or (i) of the FDIA, 12 U.S.C. § 1818(h) and (i), or otherwise to challenge the validity of the Orders;
d.	any and all claims against the OTS, including its employees and agents, and any other governmental entity for the award of fees, costs, or expenses related to this

BankAtlantic C&D Stipulation

4

OTS enforcement matter and/or the Orders, whether arising under common law, the Equal Access to Justice Act, 5 U.S.C. § 504, or 28 U.S.C. § 2412; and

e. the right to assert this proceeding, its consent to issuance of the Orders, and/or the issuance of the Orders, as the basis for a claim of double jeopardy in any pending or future proceeding brought by the United States Department of Justice or any other governmental entity.

6. Other Governmental Actions Not Affected.

     BankAtlantic acknowledges and agrees that its consent to the issuance of the accompanying Orders is solely for the purpose of resolving certain potential OTS administrative enforcement charges as provided above, and does not otherwise release, discharge, compromise, settle, dismiss, resolve, or in any way affect any actions, charges against, liability, or other administrative, civil, or criminal proceeding that arise pursuant to this action or otherwise, and that may be or have been brought by another governmental entity.

7. Agreement for Continuing Cooperation.

     BankAtlantic agrees that, on reasonable notice and without service of a subpoena, it will promptly respond to any written request from the OTS for documents that the OTS reasonably requests to demonstrate compliance with the Orders. BankAtlantic agrees, in connection with this Stipulation and the accompanying Orders, to cooperate with the OTS or any other federal agency in any review requested by the OTS or any other federal government agency, or in any investigation, litigation, or other proceeding relating to BankAtlantic, its holding company, subsidiaries, service corporations, or institution-affiliated parties.

8. Miscellaneous.

a. The construction and validity of this Stipulation and the Orders shall be governed by the laws of the United States of America.

BankAtlantic C&D Stipulation

5

b.	If any provision of this Stipulation and the Orders is ruled to be invalid, illegal, or unenforceable by the decision of any Court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby, unless the Regional Director in his or her sole discretion determines otherwise.
c.	All references to the OTS in this Stipulation and the Orders shall also mean any of the OTS’s predecessors, successors, and assigns.
d.	The section and paragraph headings in this Stipulation and the Orders are for convenience only, and such headings shall not affect the interpretation of this Stipulation or the Orders.
e.	The terms of this Stipulation and the Orders represent the final agreement of the parties with respect to the subject matters hereof and constitute the sole agreement of the parties with respect to such subject matters.
f.	This Stipulation and the Orders shall remain in effect until terminated, modified, or suspended in writing by the OTS, acting through its Director, Deputy Director, Regional Director, or other authorized representative. The CMP Order, however, will terminate automatically on the day following the day on which full payment of the penalty assessed by the CMP Order is made.

9. Signature of Directors.

     Each Director signing this Stipulation attests that he/she voted in favor of a resolution authorizing the execution of the Stipulation.

BankAtlantic C&D Stipulation

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     WHEREFORE, BankAtlantic, by a majority of its directors, executes this Stipulation and Consent to the Issuance of an Order to Cease and Desist for Affirmative Relief and for Assessment of a Civil Money Penalty intending to be legally bound hereby.

BANKATLANTIC	OFFICE OF THRIFT SUPERVISION
Fort Lauderdale, Florida
Accepted by a majority of its directors:
By: /s/ Alan B. Levan Director Alan B. Levan	/s/ John E. Ryan   John E. Ryan Regional Director
/s/ John E. Abdo  Director John E. Abdo	Dated: April 26, 2006
/s/ D. Keith Cobb Director D. Keith Cobb
/s/ Steven M. Coldren  Director Steven M. Coldren
/s/ Bruno DiGiulian  Director Bruno DiGiulian
/s/ Mary E. Ginestra  Director Mary E. Ginestra
/s/ Charlie C. Winningham  Director Charlie C. Winningham
/s/ Jarett S. Levan  Director Jarett S. Levan
/s/ David A. Lieberman  Director David A. Lieberman

BankAtlantic C&D Stipulation

7

EX-10.4

Exhibit 10.4

UNITED STATES OF AMERICA
Before The
OFFICE OF THRIFT SUPERVISION

___________________________

	)
In the Matter of	)	Order No.:
	)
BankAtlantic	)	Date:
Fort Lauderdale, Florida	)
	)
OTS Docket No.: 05551	)
	)

___________________________

CONSENT ORDER TO CEASE AND DESIST FOR AFFIRMATIVE RELIEF

     WHEREAS, BankAtlantic, Fort Lauderdale, Florida, OTS Docket No. 05551 (BankAtlantic or Bank), by and through its Board of Directors (Board), has executed a Stipulation and Consent to the Issuance of an Order to Cease and Desist for Affirmative Relief and an Order of Assessment of a Civil Money Penalty (Stipulation); and

     WHEREAS, BankAtlantic, without admitting or denying that grounds exist for initiating an administrative cease and desist proceeding, by executing the Stipulation, has consented and agreed to the issuance of this Consent Order to Cease and Desist for Affirmative Relief (C&D Order) by the Office of Thrift Supervision (OTS), pursuant to Section 8(b) of the Federal Deposit Insurance Act (FDIA), 12 U.S.C. § 1818(b)¹; and

     WHEREAS, the Director of the OTS has delegated to the Regional Directors of the OTS the authority to issue consent orders on behalf of the OTS pursuant to provisions of Section 8 of the FDIA, 12 U.S.C. § 1818.

¹ All references to the United States Code (U.S.C.) are as amended.

     NOW, THEREFORE, IT IS ORDERED THAT:

Order to Cease and Desist

1. The Bank and its directors, officers, employees, and agents shall cease and desist from any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling or the aiding and abetting of any violation of:

a.	the Currency and Foreign Transactions Reporting Act, as amended by the USA Patriot Act and other laws (the Bank Secrecy Act or BSA), 31 U.S.C. §§ 5311 et seq., and the related BSA regulations issued by the U. S. Department of the Treasury, 31 C.F.R. Part 103, and the OTS, 12 C.F.R. § 563.177 (collectively with the aforementioned laws and regulations, the BSA Laws and Regulations); and
b.	the OTS regulations governing suspicious activity reports (SAR) and other reports and statements set forth in 12 C.F.R. § 563.180.

Anti-Money Laundering/Bank Secrecy Act Compliance

2. The Board shall review the Bank’s program for compliance with the BSA Laws and Regulations (BSA Compliance Program) not less than annually and adopt and implement such revisions and amendments as are necessary to ensure: (i) the adequacy and effectiveness of the BSA Compliance Program; (ii) BankAtlantic’s continued compliance with the BSA Laws and Regulations; (iii) the appropriate identification and monitoring of accounts and transactions that pose greater than normal risks for compliance with the BSA Laws and Regulations; (iv) the timely and accurate reporting of suspicious activities or transactions with appropriate law enforcement and bank regulatory authorities; and (v) the accurate completion and maintenance of documents, forms, logs and records as required or necessitated by the BSA Laws and Regulations. The Board shall, at a minimum, take the following actions:

a. The Board shall review the Bank’s customer identification policies and procedures (CIP Policy) and know your customer policies and procedures

BankAtlantic C&D Order

2

(KYC Policy) and ensure that the weaknesses, deficiencies and violations discussed in the 2004 Examination have been fully addressed and that the CIP Policy and KYC Policy are adequate and effective to ensure the Bank’s compliance with applicable laws, regulations and agency guidance.

b.

The Board shall review the Bank’s policies and procedures for compliance with the applicable requirements of the regulations of the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC), 31 C.F.R. Part 500, (OFAC Policy) and ensure that the weaknesses, deficiencies and violations discussed in the 2004 Examination have been fully addressed and that the OFAC Policy is adequate and effective to ensure the Bank’s compliance with applicable laws, regulations and agency guidance.

c.

The Board shall ensure that the Bank’s BSA Compliance Program incorporates anti-money laundering (AML) procedures and systems, including, as may be appropriate, AML software, to adequately monitor (i) wire transfer activity; (ii) foreign currency exchange transactions; (iii) cash and automatic teller machine transactions; (iv) check processing transactions, e.g., automated clearing house transactions; (v) monetary instrument transactions, e.g., money orders, cashier checks, travelers checks, etc.; (vi) account transfers; and (vii) lending activity, to timely and effectively identify suspicious transactions for appropriate action. The Bank’s AML monitoring procedures shall be based upon periodic risk assessments of the Bank’s business activities, products, services and customers, to be conducted at least annually or more frequently, if warranted. Management shall review all accounts or transactions identified as suspicious, consistent with written monitoring and review procedures adopted by the Board, and take appropriate corrective action (including, without limitation, filing of a SAR and increased monitoring and oversight). The Bank shall fully document its review of all accounts and transactions identified as suspicious, the determinations made regarding such accounts and transactions, and the corrective actions taken with regarding to such accounts and transactions.

BankAtlantic C&D Order

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d.

Management shall conduct a comprehensive review of the Bank’s departments assigned responsibility for compliance with the BSA Compliance Program and the BSA Laws and Regulations (BSA Department) to determine the adequacy of the organization and resources dedicated to the BSA Department. This review shall include, at a minimum, assessment of the capability of the BSA Officer and his/her supporting staff to monitor and ensure compliance with the Bank’s BSA Compliance Program and the BSA Laws and Regulations, taking into account (i) knowledge of the process and systems for monitoring suspicious activities; (ii) knowledge and expertise concerning the BSA Compliance Program and the BSA Laws and Regulations; (iii) knowledge and expertise in fraud control and compliance monitoring; (iv) authority to correct identified deficiencies; (v) reporting structure and independence from Bank Management; (vi) the Bank’s methodology for collecting, maintaining, and recalling information related to transactions that pose greater than normal risks for BSA compliance; and (vii) evaluation of the types of transactions, accounts, products, services, and geographic areas that pose greater than normal risks for compliance with the BSA Compliance Program and the BSA Laws and Regulations. Within ninety (90) days after the Effective Date of this C&D Order, Management shall provide the Board a written report of its assessment of the Bank’s BSA Department, including any recommendations for strengthening the BSA Department (BSA Department Report). The Board shall review the BSA Department Report and ensure that Management makes changes as needed to strengthen the BSA Department, including ensuring that the BSA Department and the BSA Officer shall report directly to the Regulatory Compliance Committee provided for in Paragraph 4 below.

e.

Management shall maintain, and the Board shall review and adopt, a comprehensive training program for all appropriate operational and supervisory personnel to ensure awareness of their responsibility for (i) compliance with the requirements of the BSA Laws and Regulations and the

BankAtlantic C&D Order

4

OTS regulations governing SAR filings; (ii) the BSA and AML risks inherent to their departments and products; and (iii) any changes to the Bank’s BSA Compliance Program required by this C&D Order, the Bank’s BSA Audit, future OTS examinations, and amendments to the BSA Laws and Regulations (BSA Training Program). The BSA Training Program should include requirements for mandatory attendance, the frequency of training, specialized training procedures for certain departments of the Bank based upon the particular operations and risk presented by such areas (such as the wire transfer department), and procedures and timing for updating the BSA Training Program and materials based upon violations, deficiencies and weaknesses identified by the BSA Audit, future OTS examinations, or the Bank’s external independent audit. The Bank shall maintain documentation of all BSA training attended by its employees.

f. The Board shall provide for the maintenance of an internal audit function, independent of the Bank’s compliance function and the BSA Officer and his/her supporting staff, that will, on at least an annual basis, comprehensively review and assess (i) the adequacy and effectiveness of the Bank’s BSA Compliance Program, consistent with the requirements of the BSA Laws and Regulations, relevant OTS guidance, and the Bank’s current and future activities and operations; (ii) the Bank’s compliance with its BSA Compliance Program; and (iii) the Bank’s compliance with the BSA Laws and Regulations (hereafter referred to as the BSA Audit). The BSA Audit must include adequate levels of transactional testing to corroborate the audit findings, procedures for documenting completion of appropriate corrective actions by Management, and reassessment of any department, operation, branch or area identified as having less than adequate BSA compliance within six (6) months following the completion of each BSA Audit. Within thirty (30) days after completion of the BSA Audit, the Board will review the results of the BSA Audit, adopt appropriate corrective actions and timeframes to address identified deficiencies or weaknesses, require Management to fully implement

BankAtlantic C&D Order

5

the corrective actions adopted by the Board, and ensure the timely completion of all required corrective actions. The Board’s review, discussions and required corrective actions shall be fully detailed in the appropriate Board meeting minutes. A copy of the BSA Audit procedures, scope and findings, and the relevant meeting minutes detailing the Board’s review, shall be provided to the Regional Director within ten (10) days after the Board’s review of the BSA Audit findings.

g.

The Board shall ensure that the annual BSA Audit required by Paragraph 2.f. above includes a review and assessment of the adequacy and effectiveness of the CIP Policy and KYC Policy. The review shall consider, without limitation, the adequacy and effectiveness of due diligence procedures and customer profiles for customer groups with heightened BSA and AML risk, as identified by the Bank, including, non-US resident accounts, commercial and business accounts, customers with significant wire transfer activity, and customers generating more than five (5) currency transaction report filings per year. The review shall assess the adequacy and effectiveness of the CIP Policy and KYC Policy for the Bank and for each individual branch, including an assessment of the adequacy and reliability of data and information obtained and maintained by the Bank and each individual branch, and identify any deficiencies, weaknesses or noncompliance with the CIP Policy, KYC Policy or applicable laws and regulations.

h.

In addition to the BSA Audit required by Paragraph 2.f. above, the Board shall require Management to engage a qualified independent outside third party to conduct annual independent tests of the Bank’s compliance with the BSA Compliance Program and the BSA Laws and Regulations. Each annual independent test shall comply with the requirements contained in the Federal Financial Institutions Examination Counsel’s BSA/AML Examination Manual.

BankAtlantic C&D Order

6

3. The Board and Management shall ensure that all deficiencies, weaknesses and violations of law or regulation identified in the Bank’s 2004 Examination have been corrected, as directed therein, except where such direction is modified or changed by the terms of this C&D Order. Further, the Board and Management of the Bank shall take immediate action to cause the Bank to comply with the terms of this C&D Order.

Board Compliance Committee

4. Within thirty (30) days of the Effective Date of this C&D Order, the Board shall appoint a committee comprising three (3) or more Directors, the majority of whom shall be independent of Management, to monitor and coordinate the Bank’s compliance with the provisions of this C&D Order and the completion of any remaining corrective action required in the 2004 Examination (the Regulatory Compliance Committee).

5. Within forty-five (45) days after the end of each calendar quarter, the Regulatory Compliance Committee shall submit a written progress report to the Board detailing the actions taken or required to be taken to comply with each provision of this C&D Order and the actions required by the 2004 Examination, as well as the results and status of those actions.

6. Within sixty (60) days after the end of each calendar quarter, the Board shall submit to the Regional Director: (i) a copy of the Regulatory Compliance Committee’s quarterly progress report required by Paragraph 5 above, with any additional comments made by the Board; and (ii) a written certification that each Director has reviewed the report.

Compliance with Order

7. All policies, procedures, corrective actions, plans, programs, reviews and systems required by this C&D Order (collectively, Policies and Procedures) shall conform to all applicable statutes, regulations, OTS policy and guidance. The Board shall submit copies

BankAtlantic C&D Order

7

of all Policies and Procedures required by this C&D Order to the Regional Director within the timeframes specified or, in the event a timeframe is not specified, within thirty (30) days after adoption by the Board. The Board shall revise such Policies and Procedures as required by the Regional Director within thirty (30) days of receipt of written direction from the Regional Director. The Policies and Procedures, as modified consistent with the written direction of the Regional Director, shall be incorporated into this C&D Order and any deviation from such Policies and Procedures shall be a violation of this C&D Order.

Definitions

8. All technical words or terms used in this C&D Order for which meanings are not specified or otherwise provided by the provisions of this C&D Order shall, insofar as applicable, have meanings as defined in Chapter V of Title 12 of the Code of Federal Regulations, Part 103 of Chapter I of Title 31 of the Code of Federal Regulations, the BSA, the Home Owners Loan Act (HOLA), the FDIA, OTS Memoranda or other published OTS guidance. Any such technical words or terms used in this C&D Order and undefined in said Code of Federal Regulations, the BSA, the HOLA, the FDIA, OTS Memoranda, or other published regulatory guidance shall have meanings that are in accordance with the best custom and usage in the savings and loan industry.

Successor Statutes, Regulations, Guidance, Amendments

9. Reference in this C&D Order to provisions of statutes, regulations, OTS Memoranda, and other published regulatory guidance shall be deemed to include references to all amendments to such provisions as have been made as of the Effective Date and references to successor provisions as they become applicable.

BankAtlantic C&D Order

8

No Violations Authorized; OTS Not Restricted

10. Nothing in this C&D Order or the Stipulation shall be construed as: (i) allowing the Bank to violate any law, rule, regulation, or policy statement to which it is subject, or (ii) restricting or estopping the OTS from taking any action(s) that it believes are appropriate in fulfilling the responsibilities placed upon it by law including, without limitation, any type of supervisory, enforcement or other action that the OTS determines to be appropriate, arising out of matters described in the most recent Report of Examination, or based on other matters.

Time Limits; Effect of Headings; Separability Clause; Stipulation Incorporated

11. Time limitations for compliance with the terms of this C&D Order run from the Effective Date, unless otherwise noted.

12. The section and paragraph headings herein are for convenience only and shall not affect the construction hereof.

13. In case any provision in this C&D Order is ruled to be invalid, illegal or unenforceable by the decision of any court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby, unless the Regional Director in his/her sole discretion determines otherwise.

14. The Stipulation is made a part hereof and is incorporated herein by this reference.

Effective Date; Duration

15. This C&D Order is and shall become effective on the date it is issued, i.e., the Effective Date as shown on the first page hereof. This C&D Order (including the related Stipulation) shall remain in effect until terminated, modified or suspended, in writing by the OTS, acting through its Director, Regional Director or other authorized representative.

OFFICE OF THRIFT SUPERVISION
By:	/s/ John E. Ryan
	John E. Ryan
	Regional Director

BankAtlantic C&D Order

9

EX-10.5

Exhibit 10.5

UNITED STATES OF AMERICA
Before The
OFFICE OF THRIFT SUPERVISION

__________________________

	)
In the Matter of	)
	)
BankAtlantic	)	Order No.:
Fort Lauderdale, Florida	)
	)	Date:
OTS Docket No. 05551	)
	)

__________________________

ORDER OF ASSESSMENT OF
A CIVIL MONEY PENALTY

     WHEREAS, BankAtlantic, Fort Lauderdale, Florida, OTS Docket No. 05551 (BankAtlantic), by and through its Board of Directors, has executed a Stipulation and Consent to the Issuance of an Order to Cease and Desist for Affirmative Relief and an Order of Assessment of a Civil Money Penalty (Stipulation); and

     WHEREAS, BankAtlantic, by its execution of the Stipulation, has consented and agreed to the issuance of this Order of Assessment of a Civil Money Penalty (Order), by the Office of Thrift Supervision (OTS), pursuant to 12 U.S.C. 1818(i).¹

     WHEREAS, the Director of the OTS has delegated to the Regional Directors of the OTS the authority to issued Orders of Assessment of a Civil Money Penalty on behalf of the OTS where the institution that is the subject of the Order has consented to the issuance of the Order.

NOW THEREFORE, IT IS ORDERED that:

     1. Within ten (10) calendar days of the date of this Order, BankAtlantic shall pay a civil money penalty in the amount of ten million dollars ($10,000,000.00).

¹ All references to the United States Code (“U.S.C.”) are as amended, unless otherwise indicated.

     2. Payment of the penalty assessed pursuant to paragraph 1 of this Order shall be concurrent with the civil forfeiture of ten million dollars ($10,000,000.00) assessment by the U.S. Department of Justice in a Deferred Prosecution Agreement with BankAtlantic, dated _______________, and shall be satisfied by a single payment in the amount of ten million dollars ($10,000,000.00) paid pursuant to the terms of that Deferred Prosecution Agreement.

     3. The Stipulation is made of part hereof and is incorporated by this reference.

     4. This Order is and shall become effective on the date it is issued, as shown in the caption hereof. The Stipulation and the Order shall remain in effect until terminated, modified or suspended in writing by OTS, acting through its Director, Regional Director, or other authorized representative. The order, however, will terminate automatically on the day following the day on which BankAtlantic makes full payment of the penalty assessed by this Order.

OFFICE OF THRIFT SUPERVISION
By:	/s/ John E. Ryan
	John E. Ryan
	Regional Director Southeast Region

2

EX-99.1

Exhibit 99.1

BankAtlantic Enters into Agreements with the
Department of Justice, Office of Thrift Supervision, and
FinCEN Relating to Bank Secrecy Act and Anti-Money
Laundering Compliance Matters

     FORT LAUDERDALE, FL — April 26, 2006 — BankAtlantic Bancorp, Inc. (NYSE:BBX) had previously announced that it anticipated entering into agreements with regulators relating to deficiencies in its compliance with the Bank Secrecy Act and anti-money laundering laws and regulations. Today, the Company announced that it had entered into a deferred prosecution agreement with the Department of Justice relating to deficiencies in BankAtlantic’s Bank Secrecy Act and anti-money laundering compliance programs, and at the same time entered into a cease and desist order with the Office of Thrift Supervision, and that it anticipates entering a consent with FinCEN relating to these compliance deficiencies.

     Under the agreement with the Department of Justice, BankAtlantic has agreed to make a payment of $10 million to the United States. The Office of Thrift Supervision has independently assessed a civil money penalty of $10 million. Under the OTS order, the OTS assessment will be satisfied by the payment terms made under the agreement with the Department of Justice. It is anticipated that any penalty assessed under the FinCEN consent will also be satisfied by the payment terms made under the agreement with the Department of Justice. As previously disclosed, BankAtlantic Bancorp established a $10 million reserve during the fourth quarter of 2005 with respect to these matters and the anticipated terms of resolution, and accordingly, the payment will have no impact on 2006 financial results.

     Chairman and Chief Executive Officer Alan B. Levan commented, “As we have disclosed for some time, we identified deficiencies in our Bank Secrecy Act and anti-money laundering compliance in 2004. Since that time we have worked tirelessly to ensure we are in full compliance with the Bank Secrecy Act and other anti-money laundering laws and regulations, and have made significant investments in personnel and compliance systems. We are happy to put these issues behind us.”

     BankAtlantic is committed to full compliance with the provisions of these agreements. Provided that BankAtlantic complies with its obligations under the deferred prosecution agreement for a period of 12 months, the Department of Justice has agreed to take no further action in connection with this matter. BankAtlantic has been advised that the cease and desist order issued by the Office of Thrift Supervision and the anticipated FinCEN consent will have no effect on BankAtlantic’s ongoing operations and growth, provided that BankAtlantic remains in full compliance with the terms of the orders.

     BankAtlantic has filed the deferred prosecution agreement and the orders on a Form 8-K. Copies of these documents will be available on its website at http://www.BankAtlanticBancorp.com, and will also be made available upon request via fax, e-mail, or postal service mail. To request a copy, contact BankAtlantic Bancorp’s Investor Relations department using the contact information listed below.

For further information, please visit our websites:
http:// www.BankAtlanticBancorp.com
http:// www.BankAtlantic.com
http:// www.RyanBeck.com

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BankAtlantic Bancorp Contact Information:
Leo Hinkley,
Senior Vice President, Investor Relations
Email: InvestorRelations@BankAtlanticBancorp.com
Donna Rouzeau,
Assistant Vice President, Investor Relations & Corporate
Communications
Email: CorpComm@BankAtlanticBancorp.com
Phone: 954-940-5300, Fax: 954-940-5320
Mailing Address: BankAtlantic Bancorp, Investor Relations
2100 West Cypress Creek Road, Fort Lauderdale, FL 33309

BankAtlantic, “Florida’s Most Convenient Bank,” Contact Information:
Public Relations:
Hattie Hess, Vice President, Public Relations
Telephone: (954) 940-6383, Fax: (954) 940-6310
Email: hhess@BankAtlantic.com
Public Relations for BankAtlantic:
Boardroom Communications
Caren Berg
Phone: (954) 370-8999, Fax: (954) 370-8892
Email: caren@boardroompr.com

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Matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this release, the word “expect” and similar expressions identify certain of such forward-looking statements. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. Future performance, including continued growth and profitability, is subject to a number of risks and uncertainties, which are, in many instances, beyond the Company’s control, including the risk that despite the policies and procedures put in place, future compliance deficiencies may occur, or that final agreement may not be reached with FinCEN. In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission. The Company cautions that the foregoing factors are not exclusive.