Contributed By Roy Denish
“The fine announced today is the largest ever against a bank in connection with an investigation into U.S. sanctions violations and related offenses and underscores the national security implications of ING Bank’s criminal conduct. For more than a decade, ING Bank helped provide state sponsors of terror and other sanctioned entities with access to the U.S. financial system, allowing them to move billions of dollars through U.S. banks for illicit purchases and other activities,” said Assistant Attorney General Monaco. “I applaud the agents, analysts, and prosecutors who for years pursued this case.”
One of the major financial institutions in the US, the ING bank was fined a staggering 619 million dollars by the department of justice for violation of Trading with the Enemy Act. The bank is accused of moving billons of US currency to Cuba and Iran through the country’s financial network. The fine is considered to be the largest ever in the history of the US financial system.
On Tuesday, a criminal case was filed against the bank headquartered in Amsterdam for violating the state laws of New York and the TWEA. In turn the bank accepted responsibility for its conduct and came to an agreement to forfeit 619 million.
According to court documents, between 1990 and 2007, the bank moved more than $2 billion illegally through the legal channels of US financial network through more than 20,000 transactions to Cuba and Iran, both countries sanctioned by US government.
“The fine announced today is the largest ever against a bank in connection with an investigation into U.S. sanctions violations and related offenses and underscores the national security implications of ING Bank’s criminal conduct. For more than a decade, ING Bank helped provide state sponsors of terror and other sanctioned entities with access to the U.S. financial system, allowing them to move billions of dollars through U.S. banks for illicit purchases and other activities,” said Assistant Attorney General Monaco. “I applaud the agents, analysts and prosecutors who for years pursued this case.”
“Banks that try to skirt U.S. sanction laws undermine the integrity of our financial system and threaten our national security,” said U.S. Attorney Machen. “When banks place their loyalty to sanctioned clients above their obligation to follow the law, we will hold them accountable. On more than 20,000 occasions, ING intentionally manipulated financial and trade transactions to remove references to Iran, Cuba and other sanctioned countries and entities. Today’s $619 million forfeiture—the largest ever—holds ING accountable for its wrongdoing.”
“For years, ING Bank blatantly violated U.S. laws governing transactions involving Cuba and Iran and then used shell companies and other deceptive measures to cover up its criminal conduct,” said Assistant Attorney General Breuer. “Today’s resolution reflects a strong collaboration among federal and state law enforcement partners to hold ING accountable.”
“Investigations of financial institutions, businesses, and individuals who violate U.S. sanctions by misusing banks in New York are vitally important to national security and the integrity of our banking system,” said New York County District Attorney Vance. “These cases give teeth to sanctions enforcement, send a strong message about the need for transparency in international banking, and ultimately contribute to the fight against money laundering and terror financing. I thank our federal partners for their cooperation and assistance in pursuing this investigation.”
“Today, ING Bank was held accountable for their illegal actions involving the movement of more than $2 billion through the U.S. financial system on behalf of Cuban and Iranian entities subject to U.S. economic sanctions,” said FBI Assistant Director in Charge McJunkin. “Investigations of this type are complicated and demand significant time and dedication from agents, analysts and prosecutors. In this case, their steadfast tenacity brought this case through to today’s result, and we will continue to pursue these matters in diligent fashion.”
“In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law, including sanctions against other countries,” said IRS Criminal Investigation Chief Weber. “The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations. Creating new strategies and models of cooperation among our law enforcement partners to ensure international financial compliance is a top priority of the IRS.”
“Our sanctions laws reflect core U.S. national security and foreign policy interests and OFAC polices them aggressively. Today’s historic settlement should serve as a clear warning to anyone who would consider profiting by evading U.S. sanctions,” said OFAC Director Szubin. “We commend our federal and state colleagues for their work on this important investigation.”
According to court documents, ING Bank committed its criminal conduct by, among other things, processing payments for ING Bank’s Cuban banking operations through its branch in Curaçao on behalf of Cuban customers without reference to the payments’ origin and by providing U.S. dollar trade finance services to sanctioned entities through misleading payment messages, shell companies, and the misuse of ING Bank’s internal suspense account.
Furthermore, ING Bank eliminated payment data that would have revealed the involvement of sanctioned countries and entities, including Cuba and Iran; advised sanctioned clients on how to conceal their involvement in U.S. dollar transactions; fabricated ING Bank endorsement stamps for two Cuban banks to fraudulently process U.S. dollar travelers’ cheques; and threatened to punish certain employees if they failed to take specified steps to remove references to sanctioned entities in payment messages.
According to court documents, this conduct occurred in various business units in ING Bank’s wholesale banking division and in locations around the world with the knowledge, approval, and encouragement of senior corporate managers and legal and compliance departments. Over the years, several ING Bank employees raised concerns to management about the bank’s sanctions violations. However, no action was taken.
For decades, the United States has employed sanctions and embargoes on Iran and Cuba. Financial transactions conducted by wire on behalf of Iranian or Cuban financial institutions have been subject to these U.S. sanctions. The TWEA prohibits U.S. persons from engaging in financial transactions involving or benefiting Cuba or Cuban nationals and prohibits attempts to evade or avoid these restrictions. IEEPA makes it a crime to willfully attempt to commit, conspire to commit, or aid and abet in the commission of any violations of the Iranian Transaction Regulations, which prohibit the exportation of any services from the United States to Iran and any attempts to evade or avoid these restrictions. IEEPA and TWEA regulations are administered by OFAC.
The Justice Department’s investigation into ING Bank arose out of ongoing investigations into the illegal export of goods from the United States to sanctioned countries, including Iran. For instance, ING processed payments on behalf of one customer, Aviation Services International B.V. (ASI), a Dutch aviation company which was the subject of a U.S. Commerce Department-initiated criminal investigation, through the United States for trade services relating to the procurement by ASI of dual-use U.S. aviation parts for ASI’s Iranian clients. The ING Bank investigation also resulted in part from a criminal referral from OFAC, which was conducting its own probe of ING Bank.
ING Bank’s forfeiture of $309.5 million to the United States and $309.5 million to the New York County District Attorney’s Office will settle forfeiture claims by the Department of Justice and the state of New York. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the Department will recommend the dismissal of the information in 18 months, provided ING Bank fully cooperates with, and abides by, the terms of the deferred prosecution agreement.
OFAC’s settlement agreement with ING deems the bank’s obligations to pay a civil settlement amount of $619 million to be satisfied by its payment of an equal amount to the Justice Department and the state of New York. OFAC’s settlement agreement further requires the bank to conduct a review of its policies and procedures and their implementation, taking a risk-based sampling of U.S. dollar payments, to ensure that its OFAC compliance program is functioning effectively to detect, correct, and report apparent sanctions violations to OFAC.
The case was prosecuted by Trial Attorney Jonathan C. Poling of the Justice Department’s National Security Division; Assistant U.S. Attorneys Ann H. Petalas and George P. Varghese, of the National Security Section of the U.S. Attorney’s Office for the District of Columbia; and Trial Attorney Matthew Klecka of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
The case was investigated by the FBI’s Washington Field Office and the IRS-Criminal Investigation’s Washington Field Division, with assistance from the Treasury Department’s OFAC and the Commerce Department’s Bureau of Industry and Security.
The Department of Justice expressed its gratitude to Executive Assistant District Attorney, Chief of Investigation Division Adam Kaufmann; and Assistant District Attorneys Sally Pritchard and Garrett Lynch of the New York County District Attorney’s Office, Major Economic Crimes Bureau.