A US subsidiary of Dutch financial co-operative Rabobank has been fined US$360 million fine for having processed funds from likely illicit activities.
Trade-based money laundering (TBML) featured in Rabobank National Association’s misdemeanours according to court papers.
But the most remarkable aspect of this case is that the bank was fined, not for non-compliance, but for obstructing the regulator’s investigations.
Investigators found that one of the bank’s Calexico branch customers was involved in the black market peso exchange, the TBML typology in which criminal organisations launder US dollars via seemingly legitimate transactions.
The bank’s compliance procedures meanwhile identified several high-risk accounts, including some held by Mexican businesses that arranged cross-border transactions involving millions of US dollars, many of which involved the bank’s Calexico and Tecate branches in southern California.
The most striking feature in this case compared with the well documented run of cases in which international banks have paid heavy fines for non-compliance is that the Rabobank subsidiary has not been fined simply for violating sanctions or breaching anti-money laundering (AML) regulations.
In this case, the bank pleaded guilty to trying to obstruct the regulator’s examination of its operations throughout California.
According to a department of justice statement, when the bank’s regulator, the Office of the Comptroller of the Currency, examined its Bank Secrecy Act and AML compliance operations in 2012, Rabobank executives, “sought to hide and minimise the deficiencies”.
“When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organised crime, and money laundering activities, it chose to look the other way and to cover up deficiencies in its anti-money laundering programme,” said acting assistant attorney General Cronan.
“Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies,” he concluded.
Court papers outlining the case can be found here.
Categories: Trade Based Financial crimes News