Dutch bank ING Bank NV will pay $619 million to settle charges that it secretly moved billions of dollars through the U.S. financial system on behalf of Cuban and Iranian customers, in violation of U.S. sanctions.
ING intentionally deleted information about thousands of transactions that would have linked the money to sanctioned parties in Cuba, Iran and other countries, the Treasury Department said Tuesday.
The fine, a record for U.S. sanctions violations, defuses multiple criminal and civil probes of ING's practices between 2002 and 2007. It includes agreements that shield ING from further action by the Department of Justice, U.S. Attorney for the District of Columbia and the Manhattan District Attorney's office, ING said. All were investigating ING's practices. Treasury's Office of Foreign Assets Control had a parallel probe.
The U.S. imposes financial sanctions on political enemies to hinder their access to the global financial system. The goal is to choke off banks and other sources of capital, limiting their economic growth and their ability to buy weapons, food and other items available through global trade. Sanctions ensure that U.S. banks don't get involved.
"We have to have accountability and we have to have transparency in our international banking and finance systems so when those systems are circumvented intentionally, law enforcement has to step in," said Manhattan District Attorney Cyrus Vance.
Since 2009, Credit Suisse, Barclays and Lloyds paid similar settlements related to allegations that they moved money for people or companies that were on the U.S. sanctions list.
ING appears to have routed about $1.6 billion illegally through U.S. banks, Treasury said. The actions occurred within ING's wholesale banking division, which executes transactions for other financial firms and helps them with financing.
The Justice Department's investigation grew out of a probe into a Dutch company that was exporting goods from the U.S. to Iran by way of the Netherlands. The company used ING to process payments, according to a separate criminal case brought by the Justice Department in 2007.
ING was charged with one count of knowingly and willfully conspiring to violate two major sanctions laws, the International Emergency Economic Powers Act, which allows the president to regulate commerce in response to foreign threats; and the Trading with the Enemy Act, which restricts trade with Cuba.
The charges were outlined in a filing Tuesday in federal court for the District of Columbia. ING did not contest the charges, agreed to the filing "and has accepted responsibility for its criminal conduct and that of its employees," the Justice Department said in a release.
ING set aside money from its first-quarter earnings to cover the fine, the company said in a statement. It said internal investigations of the issue were under way before ING received inquiries from U.S. authorities.
Jan Hommen, CEO of ING Bank's parent company ING Group, called the violations "serious and unacceptable." The government's filings "describe a very different ING than the company we're all working so hard for today," he said.
The bank said it has strengthened global risk controls since the illegal activity became known. Among other steps, it closed its Cuban office in 2007, created a central team focused on preventing and detecting money laundering and added compliance staff.
The fine will be divided equally between state and federal governments.
Daniel Wagner can be reached at www.twitter.com/wagnerreports.