Search Results for: "money laundering"

Guilty plea to 3 criminal counts, $8.8B fine, and 1 year ban on dollar settlements for BNP Paribas’ laundering of $190B

BNP Paribas has settled up for their systemic efforts to use the U.S. banking system to launder money for Iran, Sudan, and Cuba.

Criminal pleas

Here are the plea agreements:

  • federal level, 1 guilty plea – 1 count of violating the International Emergency Economic Powers Act
  • state level, 2 guilty pleas – 1 count Falsifying Business Records in First Degree and 1 count Conspiracy in the Fifth Degree.


The dollar amount of laundered money is 6 times larger than any previous press reports suggest. All earlier comments said about $30B was involved.

Negotiations underway for multi-billion dollar settlement with BNP Paribas for violating trading sanctions

Wall Street Journal reports Justice Dept. Seeks More Than $10 Billion Penalty Form BNP Paribas.

At issue is a large volume of transactions and dealings with countries for which the U.S. has banned any financial dealings. We’re talking loaning money and holding (likely hiding) deposits for countries like Iran, Sudan, and North Korea, along with businesses and individuals in those countries.

Negotiations are reportedly underway between the bank and the Justice Department, Manhattan U.S. Attorney, and Manhattan DA. From the article it sounds like the N.Y. Department of Financial Services is in the discussions. After reading about the Credit Suisse settlement, I’ll guess the SEC, FDIC, and OCC are in the conversation as well. Maybe the FRB.

What are the negotiating positions?

Just how harsh is that $2.5 billion fine for Credit Suisse? Not as bad as you might think.

Previous post described the guilty plea by Credit Suisse on charges they willfully aided U.S. citizens in evading income tax.

Fine is $2.5 billion. That is a lot of money. Or is it?

Follow me on a journey to see how big a deal that may be.

Penalty in terms of months or days of net income

Credit Suisse admits to one felony for aiding tax evasion.

After unspecified decades of deliberately helping unnumbered thousands of customers evade income taxes, on Monday Credit Suisse Group plead guilty to one felony charge of aiding tax evasion. They will pay a fine of $2.5 billion.

I think this may be the end of “too big to jail.” Perhaps.

I’ll take a look at the modest size of the fine in relation to earnings in the next post.

Full service money laundering

Why I’m scratching my head over the JP Morgan settlement for not reporting the Madoff fraud

I’m still trying to sort out the $2.7B settlement.

My initial hesitation when reading several pages of the deferred prosecution agreement and other news yesterday moved to full head scratching last night when I read the Wall Street Journal’s editorial, Another Madoff Swindle – The same government that ignored the fraud gets a cut of the recovery.  I’ve since read most of the DPA.

The editorial takes exception to the feds getting a $350M cut of the settlement, as if a reward is deserved. Put another way, that is a 17% commission { $350M / ( $1,700M + $350M ) } on the recovery.

Why does the editorial board use the words “extract”, “swindle” (twice!), and “money-grab”? Here’s a few reasons: …

Q: What’s $2.6B? A: Morgan’s current tab for settling up on failure to file suspicious activity reports on Madoff scheme

Currently looks like J.P. Morgan will be wiring out $2.6B in the next few days to settle charges of having an insufficient anti-money laundering program and not filing suspicious activity reports on the Madoff fraud.

The Wall Street Journal’s tabulation as J.P. Morgan Settles Its Madoff Tab: …

Another multibillion settlement for JP Morgan – this time for not filing suspicious activity reports on Madoff accounts

JP Morgan signed a deferred prosecution agreement with the Department of Justice for not reporting suspicions raised by Morgan’s own staff that the trading in Madoff’s accounts was suspicious.

The Wall Street Journal reports: J.P. Morgan to Pay $1.7 Billion to Victims of Madoff Fraud.

The DPA, which you can read here, says …

Deloitte penalized for anti-money-laundering work done for Standard Chartered

Deloitte Financial Advisory Services agreed to a $10M fine from the N.Y. Department of Financial Services and a one year ban on new work for state chartered banks.

The consent agreement between the state regulators and Deloitte Financial Advisory Services can be found here.

What’s the problem?

Does too big to fail, too big to punish, and too big to manage mean you are too big?

George F. Will suggests the answer to the question is “yes”: When banks get too big to fail, they are too dangerous to leave intact

One of the U.S. senators on the left end of the political spectrum thinks it is time to break up the too-big-to-fail banks.

Look at the concentration of assets in the TBTF range and the long history of TBTF: …

Discussions of banking issues on my other blog

My posts on bad behavior by big banks has been split between here and my other blog, Nonprofit Update.

I’ll post future discussions here, Attestation Update.

For reference, my posts on money laundering at the other blog are here:

Settlement of $1.5B possible for UBS over allegedly playing games with LIBOR. And maybe some individual criminal indictments.

The Wall Street Journal reports $1.5B is the expectation for a settlement next week.  See their article A Shadow Over Banks as UBS Nears Deal.

(Behind paywall, so either grab yesterday’s paper quick or get an online subscription. Or do both.)

Criminal charges?

On the other hand, you cannot say banks are underregulated

Cooking Libor. Money laundering. What are the big banks doing?

Where are the regulators?

I’ve been scratching my head about some of the things banks have been doing lately, such as manipulating Libor. Other people have long been blaming banks and other financiers as the primary cause of the 2008 financial crisis. I am definitely not in that camp, but that’s a topic for another day and a dozen posts. HSBC is setting a $1.5 billion reserve for possible fines related to money laundering, since they apparently allowed $7 billion to move from Mexico to the US in violation of US law.

In the midst of that head scratching, many people are wondering, where were the regulators? In the Libor issue at least, they were well aware of what was going on.