The U.S. Attorney for the Southern District of New York recently announced the settlement of a case involving violations of the Bank Secrecy Act’s anti-money laundering (AML) requirements by U.S. Bancorp. The bank was charged with willfully failing to both have an adequate AML program and file suspicious activity reports. In exchange for the government’s deferral of prosecution of the felony violations for two years, and pending approval by the court, U.S. Bancorp has agreed to pay a $528 million penalty and continue reforms of its AML program. Although most private fund advisers are not currently required to have AML programs, many have elected to voluntarily implement certain AML-related policies and procedures. In addition, it is likely that the SEC expects private fund advisers to maintain AML programs that meet certain minimum standards as a best practice. This article examines the mistakes that U.S. Bancorp made with respect to its AML program, identifies the lessons that private fund advisers can learn from this action to avoid making the same compliance errors and presents analysis from an attorney with expertise in AML compliance. See our two-part series on establishing an AML program: “How Hedge Fund Managers Can Establish an AML Program Under FinCEN’s Proposed Rule” (Nov. 5, 2015); and “How Hedge Fund Managers Can Operate an AML Program Under FinCEN’s Proposed Rules” (Nov. 12, 2015).