Feds SocGen in kisser
$1.3B Cuba graft settlement
A major European bank laundered nearly $13 billion in transactions from Cuba and state terrorism sponsors for 10 years as part of a scheme to evade US financial sanctions, according to a $1.34 billion settlement with the Department of Justice announced Monday.
Société Générale, one of the largest French banks, was charged with one count of violating the Trading With The Enemy Act, a 101-year old law that currently applies only to Cuba. The bank allegedly ran a secret credit facility to do business with the Communist nation.
The bank knowingly helped Cuba evade the sanctions “by structuring, conducting and concealing US dollar transactions using the US financial system,” according to a civil complaint filed in Manhattan federal court.
“Today, Société Générale has admitted its willful violations of US sanctions laws — and longtime concealment of those violations, which resulted in billions of dollars of illicit funds flowing through the US financial system,” Manhattan US Attorney Geoffrey S. Berman said in a statement.
A SocGen statement said it had been extending credit to Cuba since 2000.
In addition to the Cuban trading, the bank facilitated trades with Sudan, Libya and Iran, countries that are considered state sponsors of terrorism by the US Treasury Department, according to the statement.
Banks that want to do business in the US — or with US currency — are required by law to shut out hostile countries, compa- nies and investors from the financial system to starve their sources of funding.
“We acknowledge and regret the shortcomings that were identified in these settlements, and have cooperated with the US authorities to resolve these matters,” SocGen Chief Executive Frédéric Oudéa said.
The fines and penalties won’t have any effect on the company’s earnings since they were budgeted into previous legal cost estimates, the bank said in the statement.
The bank will forfeit $717.2 million to the DOJ and $312 million to the New York State Department of Financial Services. The rest will be split between the Federal Reserve, the US Treasury and the Manhattan DA’s office.
The feds agreed to hold off on prosecuting SocGen for three years as long as it cleans up its compliance program and stops laundering money for terrorists, according to the DOJ.
In June 2014, Francebased BNP Paribas was fined nearly $9 billion for laundering money for Su- dan, Iran and other state terrorism sponsors. Its ability to clear transactions in US dollars was temporarily suspended.
The bank pleaded guilty to falsifying business documents and conspiracy.