InfoBytes Blog
Swiss bank to pay $79 million to settle money laundering charges
On May 27, the DOJ announced it had entered into a three-year deferred prosecution agreement with a Swiss bank charged with conspiring to commit money laundering, in which the bank agreed to pay more than $79 million after admitting that it “conspired to launder over $36 million in bribes through the United States to soccer officials” in exchange for broadcasting rights to international soccer matches. According to the DOJ, between February 2013 and May 2015, the bank, through a former bank relationship manager (who pleaded guilty in June 2017 for his role in the scheme and was sentenced last November), conspired with sports marketing executives to launder at least $36 million in bribes through the U.S. in order to “conceal the true nature of the payments and promote the fraud.” During this period, the DOJ claimed the bank’s anti-money laundering (AML) controls “failed to detect or prevent money laundering transactions related to the bribery schemes,” and that had the former bank relationship manager’s supervisors or compliance personnel conducted meaningful due diligence they would have been alerted to “multiple, significant red flags, including facially false contracts, payments to third parties at the direction of a [soccer federation] official, and services purportedly rendered by shell corporations—all of which would have alerted the [b]ank to the bribery, money laundering or other illegal activity.” The DOJ further noted that the bank admitted it was aware that the former bank relationship manager’s clients’ accounts were associated with international soccer—an area “generally understood to involve high corruption risks”—but still directed these accounts to be fast tracked in the hopes of obtaining lucrative business.
The terms outlined in the deferred prosecution agreement are based on several factors, the DOJ stated, including the bank’s prior criminal history and the fact that the bank failed to voluntarily disclose the conduct and played a critical rule in the scheme for more than two years. The DOJ further noted that the bank did not receive any cooperation credit because it made misleading representations about relevant facts in the case, which hindered the investigation, and failed to provide all evidence pertaining to the involvement of senior management. However, the bank did receive some credit for making significant efforts to remediate its compliance program and spent $112 million on a three-year AML initiative designed to upgrade all accounts held by the bank, not just high-risk accounts. Under the terms of the agreement, the bank will pay a fine of roughly $43.3 million and forfeit approximately $36.4 million.