Rabobank National Association, a subsidiary of a Netherlands bank, pleaded guilty in federal court February 7 to unlawfully impeding a US examination of its California operations, including Calexico and Tecate branches.
According to a report from the Office of the Comptroller of the Currency (OCC), Rabobank, a Roseville, CA subsidiary of the Netherlands-based Cooperative Rabobank, pleaded guilty to a felony conspiracy charge for impairing, impeding and obstructing its primary regulator, the OCC, by concealing deficiencies in its anti-money laundering (AML) program and for obstructing the OCC's examination of Rabobank. "Rabobank's guilty plea and forfeiture of more than $360 million is a warning to financial institutions that there are significant consequences for banks that engage in obstructive conduct in an effort to hide their anti-money laundering program failures from their regulators".
A European bank has been caught laundering money for the Mexican drug trade, and trying to cover it up.
In 2013, the bank actively sought to deceive regulators about its operations.
The suspicious transactions were made in connection to global drug trafficking, organized crime and money laundering, yet Rabobank solicited businesses and individuals conducting the transactions and failed to adequately monitor or investigate the suspicious bank transactions, according to the U.S. Attorney's Office.
Rabobank's Calexico branch, which sits about two blocks from the US-Mexico border, became the highest performing branch in the southern California county because of the cash deposits from Mexico, according to the Justice Department. The bank also instructed its staff to increase the number of accounts included on the "verified list" - jumping from less than 10 verified customers in 2009 to more than 1,000 verified customers in 2012.
A former Rabobank vice president, George Martin, entered into a deferred prosecution agreement with the US concerning his role in the case, according to the DOJ.
In the Rabobank case, executives were accused by the DOJ of coming up with a series of measures to prevent the investigation of suspicious transactions, customers and accounts.
Bank policy at the time prevented internal investigations into suspicious transactions, as required by law, even though the bank received "regular" alerts about transactions by high-risk customers and accounts, according to prosecutors.
The bank will have to pay a fine of $368.7 million, the largest financial penalty in the Southern District of California court area.
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