Commerzbank Will Pay $1.45 Bln To Settle U.S. Fraud Probe

(RTTNews) - German lender Commerzbank AG (CRZBY.PK) has agreed to pay $1.45 billion to settlement with US regulators for violating sanctions on Iran and Sudan as well as money-laundering laws, the DoJ announced on Thursday.

The bank entered into a deferred prosecution agreement with the Justice Department for violations of the International Emergency Economic Powers Act (IEEPA) and the Bank Secrecy Act (BSA). The bank also agreed to pay penalties to settle other violations to the Treasury Department and the Federal Reserve System.

Commerzbank was alleged to have had transactions with Iran and Sudan, countries that have been blacklisted by the US.

"Commerzbank concealed hundreds of millions of dollars in transactions prohibited by U.S. sanctions laws on behalf of Iranian and Sudanese businesses," said Assistant Attorney General Caldwell. "Financial institutions must heed this message: banks that operate in the United States must comply with our laws, and banks that ignore the warnings of those charged with compliance will pay a very steep price."

The settlement also covers a multi-billion dollar accounting fraud involving Olympus, a Japanese-based manufacturer of medical devices and cameras. From late 1990s through 2011, Olympus was involved in a massive accounting fraud through Commerzbank, designed to conceal from auditors and investors hundreds of millions of dollars in losses.

Commerzbank has agreed to a cease and desist order, to take certain remedial steps to ensure its compliance with U.S. law in its ongoing operations and to pay a civil monetary penalty of $200 million.

Commerzbank agreed to pay the New York State Department of Financial Services a monetary penalty of $610 million. The Treasury Department's Office of Foreign Assets Control has also levied a fine of $258.6 million, which will be satisfied by payments made to the Justice Department.

Commerzbank will pay $263 million in forfeiture and a fine of $79 million for the IEEPA violations, and to pay $300 million in forfeiture related to the BSA violations.