Dirt on Frankfurt
German bank’s laundry bill: $1.45B
Another moneylaundering bank has been hung out to dry.
German bank giant Commerzbank agreed to pay $1.45 billion — its biggest fine ever — to settle investigations into its dealings with blacklisted nations like Iran and Sudan.
The firm also booted Deepa Keswani, who led antimoney laundering and fraud compliance in the bank’s New York office during the alleged violations, according to a person familiar with the settlement.
Keswani was most recently the New York head of regulatory compliance before her ouster Wednesday.
The settlement resolves two probes into money laundering and sanctions violations. A slew of state and federal regulators have been investigating the Frankfurtbased bank, including Manhattan US attorney Preet Bharara, Ben Lawsky’s Department of Financial Services and Manhattan District Attorney Cyrus Vance.
The Department of Justice, the Federal Reserve and the Office of Foreign Assets Control were also probing Germany’s secondbiggest bank by assets.
“When regulators cooperate, it benefits the target of the investigation, which can resolve many of its problems at once,” Matthew L. Schwartz, partner at Boies Schiller & Flexner, told The Post.
“Institutions must ensure that suspicious activity detected in the ordinary course of business is escalated to compliance and, as necessary, beyond,” said Schwartz
Several banks already have been penalized for sanctions and money laundering violations. French bank BNP Paribas pleaded guilty to criminal charges and agreed to pay almost $9 billion to resolve accusations it violated sanctions against Sudan, Cuba and Iran.
The investigation was sparked when a former banker at Commerzbank, Chan Ming Fon, was arrested and later pleaded guilty to helping Japanese accounting firm Olympus perpetuate a $1.7 billion fraud, said the person familiar with the probes.
The transactions tied to the fraud prompted Bharara and other US officials to investigate Commerzbank.
For six years through 2008, Commerzbank employees tried to mislead regulators about the identity of Iranian and Sudanese entities party to more than $253 billion in dollar clearing transactions, officials said.
“Bank employees helped facilitate transactions for sanctioned clients such as Iran and Sudan, and a company engaged in accounting fraud,” Lawsky, the DFS superintendent, said in a statement Thursday.