German bank to pay $1.45B to settle money laundering charges

Federal and state regulators are demanding the resignation of several employees at a German bank, along with a $1.45 billion penalty for helping countries avoid U.S. sanctions.

Regulators charged that Commerzbank “turned a blind eye” when it came to money laundering, helping countries like Iran, Sudan and Burma dodge economic sanctions, as well as aiding a Japanese company engaged in accounting fraud.

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According to the government, the bank helped nations skirt U.S. sanctions for several years leading up to 2010, processing 60,000 dollar transactions worth over $253 billion on behalf of Iranian and Sudanese entities.

Among the tactics employed were deleting or omitting references to institutions that would be subject to sanctions in wire transfers, or replacing a bank under sanctions with Commerzbank’s name for transactions heading to U.S. banks.

Regulators charge that the bank deliberately established compliance practices to minimize attention to problematic activities.

As part of the settlement, regulators ordered the bank to “take all steps necessary” to remove four employees still at the bank that engaged in the activity. One additional bank employee has already resigned as a result of the probe.

Under the terms of the settlement, the bank will pay $610 million to New York State’s Department of Financial Services, $300 million to the U.S. Attorney’s Office for the Southern District of New York, $200 million to the Federal Reserve, $172 million to the Manhattan District Attorney’s office, and another $172 million to the Justice Department.