Rabobank banked millions in untraceable cash

Reuters

Reuters

The US unit of Dutch bank Rabobank pleaded guilty on Wednesday to obstructing an investigation into the hundreds of millions in drug-tainted cash from Mexico that flowed through its accounts, the Justice Department said.

It marks one of the largest USA settlements involving the laundering of Mexican drug money, though it's still only a fraction of the US$1.9 billion that Britain's HSBC agreed to pay in 2012. Two of the executives were fired in 2015 and one retired that year.

"Settling these matters is important for the bank's mission here in California", Mark Borecco, CEO of RNA, said to Fox News. "Rabobank's guilty plea and forfeiture of more than $360 million is a warning to financial institutions that there are significant consequences for banks that engage in obstructive conduct in an effort to hide their anti-money laundering program failures from their regulators".

A Rabobank branch is seen on February 6, in Thousand Oaks, California.

The company admitted that several of its Southern California border-area branches laundered money for global drug traffickers, failed to properly investigate the suspicious transactions and then deceived and obstructed federal investigators who were on the verge of discovering the illicit activity. The money was wired via wire transfers, checks and cash transactions without notifying federal regulators of the suspicious activity as required by law, according to the U.S. Attorney's Office. The bank also instructed its staff to increase the number of accounts included on the "verified list" - jumping from less than 10 verified customers in 2009 to more than 1,000 verified customers in 2012. "The bank should have known and they just chose not to report any suspicions activity".


Heather Lowe, legal counsel and government affairs director at research and advocacy group Global Financial Integrity, said the illegal activity bore similarities to what happened with HSBC and Wachovia.

"It seems in this case we have the bank taking the hit for lying but not for the violations themselves", said Lowe, who anticipates the three unnamed executives will be prosecuted. She was dismissed in July 2013.

"When Rabobank learned that substantial numbers of its customers' transactions were indicative of global narcotics trafficking, organized crime, and money laundering activities, it chose to look the other way and to cover up deficiencies", the Justice Department's John Cronan said in a statement.

Martin told investigators that he and others allowed millions of dollars to pass through the bank.

Rabobank's headquarters in Utrecht. Sentencing is scheduled May 18.

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