Nevada News Reporter

Commerzbank to pay $1.45B in penalties

Commerzbank to pay $1.45B in penalties

Commerzbank will pay $1.45 billion in penalties and fire several employees to resolve federal and state charges that the German banking giant violated U.S. sanctions by processing transactions that benefited Iranian and Sudanese entities. The bank, Germany’s second largest, secretly stripped out identifying data of its clients to process 60,000 U.S. dollar-clearing transactions valued at more than $253 billion from 2002-2008 for individuals and companies in Iran and Sudan, U.S. authorities and regulators said Thursday.635617591292990603-EPA-FILE-GERMANY-ECONOMY-COMMERZBANK

Sudan and Iran are among the nations targeted by restrictions under a federal statute that empowers U.S. presidents to impose economic sanctions in response to overseas actions such as terrorism or human rights abuses that threaten national security. The settlement, part of a deferred prosecution agreement, also covers a massive accounting fraud involving Olympus, a Japanese optics and medical device manufacturer. More than $1 billion of funds linked to the fraud flowed through Commerzbank’s New York office as a result of anti-money laundering deficiencies, prosecutors charged.

Under the financial settlement terms, Commerzbank will make payments to the U.S. Department of Justice; the Federal Reserve; the Manhattan U.S. Attorney’s Office in New York; the Department of the Treasury’s Office of Foreign Assets Control; the New York Department of Financial Services; and the Manhattan District Attorney’s Office. U.S. investigators also demanded that the settlements include firings of bank employees directly involved in the violations. As a result, Commerzbank’s New York-based head anti-money laundering, fraud detection and sanctions compliance resigned, and four other employees are scheduled to face terminations.

Commerzbank said Thursday that it will book an additional one-time charge of 338 million euros, or $358.4 million, during the bank’s fourth quarter to finance the settlement. The bank’s 2014 net profit will be adjusted downward to 264 million euros, or nearly $280 million, from the 602 million euros, or $638.4 million, that was reported in February.