"North Dade could have engaged a professional to design and install a near bullet-proof compliance program," he explained. "It didn't and that's why we have this textbook example of how not to do it when it comes to abiding by AML KYC and due diligence principles."

Kenney, who was recently the keynote speaker at the Association of Certified Fraud Examiners' 25th Annual Global Fraud Conference and received the association's 2014 Cressey Award for his lifetime achievement in the detection and deterrence of fraud, said credit unions must practice extreme caution in dealing with high-risk accounts such as money services businesses.

There has been a surge in illicit activity at smaller community banks and credit unions, as larger banks such as Barclays PLC or HSBC move away from providing services to MSBs, said Kenney, who is managing partner of Martin Kenney & Co. Solicitors, a British Virgin Islands-based firm specializing in international fraud.

"North Dade was working with high risk locations far beyond its field of membership and body of knowledge," he added. "North Dade is most unlikely to be alone in that." Failing to adhere rigorously to AML standards can mean financial ruin if penalties dig into liquidity.

For credit unions, a standard off-the-shelf compliance program is unlikely to ensure effective compliance, he said.

"Each financial institution offers different products and has a different customer base," he said. "A compliance program must be specifically tailored to meet the needs of the institution. As those needs change, the compliance program will need to be reviewed and adapted." It's vital for staff to be trained to recognize and respond to red flags, Kenney said.

Read more: BSA burden bigger for small credit unions …

Smaller credit unions like North Dade often have bigger challenges in achieving BSA compliance, Randy Thompson, CEO of TCT Risk Solutions (formerly TCT Inc.), a balance sheet and risk management CUSO based in Eagle, Idaho, said.

"Quite often compliance falls on the shoulders of the CEO/manager who is already managing a multitude of items in running their shop," Thompson said. "This creates a double problem because, as the CEO focuses on compliance, other important duties may receive inadequate attention."

If a credit union is unable to appoint a staff member to oversee compliance, the institution's leaders should reach out and ask for help for their fellow credit unions or look for a shared resource (person) with compliance expertise, Thompson said.

"Consistent attention, coupled with the application of shared resources, can create a compliance program that works and protects the credit union and its members," he explained.

NCUA and FFIEC provide many tools and audit questionnaires to assist with compliance, he said.

"Doing annual in-house pre-audits will help you find the holes in your BSA/AML compliance program, so you can correct issues before they become a violation," he explained. "Having reports and procedures in place that help identify high risk transactions coupled with ongoing staff training on BSA/AML requirements will alleviate weaknesses in the credit union's compliance program."