Following a recent settlement with Commerzbank AG in which the bank paid more than a billion dollars in penalties and fines, the Assistant Attorney General stated: “Financial institutions must heed this message: banks that operate in the United States must comply with our laws, and banks that ignore the warnings of those charged with compliance will pay a very steep price.”
The Department of Justice, Treasury Department and other executive branches have become very aggressive in recent years in going after banks that violate a host of U.S. laws, from tax laws and financial reporting requirements to the International Emergency Economic Powers Act (IEEPA) and the Bank Secrecy Act (BSA).
Banks, when targeted for prosecution, generally enter into settlement agreements. Often, these agreements involve turning over information on their customers. If you are concerned that federal authorities could use information provided by your bank to target you for prosecution, it is better to be proactive and deal with the problem now than wait until you are charged.
A New Jersey criminal tax lawyer can provide you with assistance if you have undeclared offshore accounts or have violated other financial laws and regulations of the United States.
Commerzbank AG Settles Allegations of Criminal Wrongdoing
Commerzbank AG paid $1.45 billion in total fines as a result of federal, state and regulatory actions. The Frankfurt Bank faced multiple accusations of wrongdoing, as did its New York branch, Commerzbank NY. The bank also agreed to enter into a three-year deferred prosecution agreement -- if the bank complies with the terms of the agreement for three years, the authorities will dismiss the prosecution.
The fines and deferred prosecution agreement stemmed from the bank’s willful failure to conduct due diligence on foreign accounts, along with its willful failure to file suspicious activity reports. The bank was charged with violating the Bank Secrecy Act (BSA), as well as the International Emergency Economic Powers Act (IEEPA).
Commerzbank AG was facing a four-count federal indictment, prosecution in New York and pending legal actions from the Board of Governors of the Federal Reserve System and the Office of Foreign Assets Control (OFAC), which is part of the Treasury Department.
There were two separate types of transactions the bank was involved in that resulted in these criminal charges. The first involved allegations that the bank had concealed transactions done by businesses from Iran and Sudan, which were in violation of sanctions placed on these countries by the United States government. Bank managers had reportedly raised red flags about the fact that the banks were helping to conceal transactions so sanctions could be circumvented.
The second transaction involved allegations that the bank facilitated a massive accounting fraud by the Japanese company Olympus. Olympus took off-the-books loans from Commerzbank, and Commerzbank processed $1.6 billion in suspicious transactions from the company as it was engaging in securities fraud against investors.
Financial institutions have an obligation to do due diligence and report suspicious transactions, and the Olympus transactions should have triggered this reporting requirement.
A criminal tax lawyer knows there are many ways banks can get into legal trouble, the majority of which revolve around helping customers to facilitate transactions that are against the law. These customers, as well as the banks, can find themselves facing legal action. If you are concerned about being charged with a crime, contact Kevin Thorn and his team for help today.