U.S. arm of big Dutch bank fined $50 million for AML/BSA deficiencies (updated)

The U.S. arm of a huge multi-national Dutch banking company was assessed a $50 million civil money penalty Wednesday by a federal banking regulator charging deficiencies in the U.S. bank’s anti-money laundering (AML) processes.

The Office of the Comptroller of the Currency (OCC) said it was assessed the penalty against Rabobank, N.A., of Roseville, Calif. ($13.5 billion in assets). According to the agency, the bank’s deficiencies in its AML processes, and non-compliance with the Bank Secrecy Act (BSA) requirements, led to the penalty. The bank had been subject since 2013 to a cease-and-desist order (consent order). That order is now terminated.

Meanwhile, the bank also Wednesday agreed  to pay more than $368 million for processing funds likely tied to drug trafficking and other illicit activity and pleaded guilty in federal court to conspiring to obstruct regulatory oversight. The OCC said the $50 million fine it assessed would be credited toward the bank’s Justice Department fine.

In a release, the OCC said it found at the bank the following:

  • During the OCC’s examination that commenced in November 2012, bank senior officers participated in efforts to preclude the OCC from obtaining requested information and the bank concealed requested documents from OCC officials, in violation federal law.
  • Since at least 2012, it failed to establish and maintain a compliance program that adequately covers required BSA/AML elements, including development of adequate “customer due diligence” and “enhanced due diligence” processes, as required by the BSA.
  • It failed to adequately investigate questionable activity related to law enforcement subpoenas and requests received pursuant to the USA PATRIOT Act, which requires banks to provide certain customer and account information upon request from the Financial Crimes Enforcement Network (FinCEN).
  • As required by the 2013 order, an independent consultant reviewed the bank’s transaction and account activity between January 2010 and December 2013, resulting in the filing of 472 Suspicious Activity Reports (SARs) and reporting more than $233 million in previously unreported suspicious activity, resulting in violation of federal statute.

The bank regulator said its action was taken in coordination with a separate action by the Department of Justice (DOJ). “The bank paid the OCC-assessed penalty to the U.S. Treasury and that amount is credited toward satisfaction of the fine assessed by the Department of Justice,” OCC said. “The OCC has determined that the bank has implemented all of the corrective actions required by the 2013 consent order and has achieved compliance with the requirements set forth in that order.”

OCC Assesses $50 Million Civil Money Penalty and Terminates Consent Order Against Rabobank, N.A.