Rabobank N.A. agreed on Wednesday to pay over $368 million as a settlement over the issue of processing illicit funds.
The funds are thought to be closely tied to drug trafficking and other illegal activity. The bank pleaded guilty in federal court, admitting to conspiring to impede regulatory oversight.
A statement was released by the U.S. Department of Justice discussing the case. According to them, the bank allowed hundreds of millions in untraceable cash from Mexico and elsewhere to be deposited into branches in California.
The funds were then transferred without sufficient monitoring. Still, according to the statement, Rabobank did not report any of the suspicious transactions to federal regulators.
“When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organized crime and money laundering activities, it chose to look the other way,” stated acting assistant attorney-general John Cronan. “Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies.”
Chair of Rabobank’s managing board, Wiebe Draijer called the violations “serious, regrettable and unacceptable.”
“Rabobank is fully committed to conducting business with the highest levels of integrity, which includes strict compliance with all applicable laws, regulations, and standards in each of the markets and jurisdictions in which it operates,” said Draijer in a statement.
The Rabobank fine comes less than six years after HSBC faced the same case and paid $1.92 billion for settlement.
Rabobank N.A. is a California unit of the Dutch cooperative bank.
RBS Denies British lawmaker’s Allegation
On the other hand, Royal Bank of Scotland on Tuesday denied British lawmaker’s allegations of misleading politicians.
Accusations were made by Clive Lewis, a Labour lawmaker and spokesman for the opposition party on Treasury matters.
He claimed that RBS’s executives misled a parliamentary committee over the extent of mistreatment that the bank has allegedly done to small businesses. Lewis stated that the mistreatment was done during and after the financial crisis.
The CEO and Chairman of RBS were questioned extensively last week by Britain’s Treasury Select Committee. The TSC asked about a restructuring unit that is said to have pushed struggling firms into bankruptcy so that the bank can pick up their assets cheaply.
RBS Chairman Howard Davies rejected the allegations. He instead pointed out that his accuser was the one to made misleading comments.
“I would ask that you revisit the evidence for your comment as, without correction, there is a risk that the House has been misled,” said Davies in a letter addressed to Lewis.
Lewis was not immediately available for comment.
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