New York fines Commerzbank $1.45 billion for transactions with Iran, Sudan, Japan

Staff writer ▼ | March 12, 2015

Commerzbank will pay for Banking Law violations in connection with transactions on behalf of Iran, Sudan, and a Japanese corporation that engaged in accounting fraud.

The overall $1.45 billion penalty includes $610 million to the Department of Financial Services (DFS); $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 $172 million to the U.S. Department of Justice.

Superintendent Lawsky said: "When there was profit to be made, Commerzbank turned a blind eye to its anti-money laundering compliance responsibilities. Bank employees helped facilitate transactions for sanctioned clients such as Iran and Sudan, and a company engaged in accounting fraud.

"What is especially disturbing is that employees sought to alter the Bank's transaction monitoring system so that it would create fewer ‘red flag' alerts about potential misconduct, which highlights a potential broader problem in the banking industry."

From at least 2002 to 2008, Commerzbank used a series of measures – including stripping out information identifying clients subject to U.S. sanctions (wire-stripping) – to process $60,000 clearing transactions valued at over $253 billion on behalf of Iranian and Sudanese entities.

Additionally, deficiencies in Commerzbank's anti-money laundering compliance program resulted in Commerzbank's facilitation of numerous payments through the Bank's New York Branch that furthered a massive accounting fraud by the Olympus Corporation, a Japanese optics and medical device manufacturer.

You can read the whole explanation here. ■