A Roseville subsidiary of a Dutch banking company was sentenced Friday for concealing flaws in its anti-money-laundering program and later providing misleading information about the program when investigated by federal regulators, the U.S. Department of Justice said.
As a result, the bank blocked or delayed investigations into roughly $370 million worth of suspicious transactions near the U.S.-Mexico border believed to be tied to narcotics trafficking and organized crime, the press release said.
The company, Rabobank National Association, is known as a leader in agricultural lending throughout California and employed more than 200 workers in Roseville in 2014, a Sacramento Bee story said. Its parent company, Rabobank Group, operates out of the Netherlands.
Rabobank pleaded guilty to charges of conspiracy to defraud the United States and to corruptly obstruct an examination of a financial institution earlier this year. It also forfeited almost $370 million for allowing the illicit funds to be processed through the bank, the press release said.
"Today’s sentence and the related forfeiture demonstrate that the Department of Justice will use all the tools at our disposal to combat drug trafficking and transnational crime — including prosecuting financial institutions that turn a blind eye to illicit proceeds moving through their customers’ accounts," a statement by Acting Assistant Attorney General John Cronan said.
Rabobank admitted to making the changes to its anti-money laundering polices in 2009. Over the next three years, those policies allowed transactions that were previously considered high-risk, such as high quantity cash deposits and withdrawals, check transactions, and electronic transfers, to go unreported or face delayed reporting to the Financial Crimes Enforcement Network.
Meanwhile, the bank's branches in California's Imperial County depended on cash coming from Mexico that, according to the press release, the bank likely knew was tied to drug trafficking and organized crime. The bank continued to work with the cash-heavy customers from Mexico while ignoring proper procedures that address high-risk transactions until about 2013.
Lastly, Rabobank admitted that at least three executives purposely gave false and misleading information about the bank's anti-money-laundering program when the U.S. Office of the Comptroller of the Currency investigated findings from a third-party consultant "described the deficiencies and resulting ineffectiveness" of the program. Two employees were also fired for providing the OCC with information about the program flaws.
U.S. District Judge Jeffrey Miller of the Southern District of California handed down the sentence. Rabobank faces a $500,000 fine and a two-year probation.