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Commerzbank, U.S. DoJ enter $642 million settlement

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Commerzbank
Commerzbank AG   Violations of IEEPA and BSA

Commerzbank AG and its U.S. branch, Commerzbank AG New York Branch (Commerz New York), have agreed to forfeit $563 million, pay a $79 million fine and enter into a deferred prosecution agreement with the Justice Department (DoJ).

The settlement is for violations of the International Emergency Economic Powers Act (IEEPA) and the Bank Secrecy Act (BSA).

The bank has also entered into settlement agreements with the Treasury Department's Office of Foreign Assets Control (OFAC) and the Board of Governors of the Federal Reserve System.

In entering the deferred prosecution agreement, Commerzbank admitted and accepted responsibility for its criminal conduct in violation of IEEPA, and Commerz New York admitted its criminal conduct in violation of the BSA. Commerzbank further agreed to pay $263 million in forfeiture and a fine of $79 million for the IEEPA violations, and to pay $300 million in forfeiture in connection with the BSA violations, which will be remitted to the victims of a multi-billion dollar securities fraud scheme that was permitted to operate through Commerzbank.

Commerzbank also agreed to implement rigorous internal controls and to cooperate fully with the Justice Department, including by reporting any criminal conduct by an employee.

A four-count felony criminal information was filed in the District of Columbia charging Commerzbank with knowingly and willfully conspiring to commit violations of IEEPA and Commerz New York with three violations of the BSA for willfully failing to have an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent accounts, and willfully failing to file suspicious activity reports.

Assuming the bank's continued compliance with the deferred prosecution agreement, the government has agreed to defer prosecution for a period of three years, after which time, the government would seek to dismiss the charges.

The New York County District Attorney's Office also announced that Commerzbank has entered into a deferred prosecution agreement, and in the corresponding factual statement, Commerzbank admitted that it violated New York State law by falsifying the records of New York financial institutions. In total, Commerzbank will pay $1.45 billion in penalties.


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