Violating Sanctions Will Cost French Bank $787M

WASHINGTON (CN) - Credit Agricole Corporate and Investment Bank agreed to forfeiture and fines Tuesday that put it on the hook to the United States for $787.3 million.

The case pertains to $312 million that Credit Agricole subsidiaries in Geneva, Switzerland, "knowingly and willfully moved" between August 2003 and September 2008, according to federal court documents made public today.

Regulators say the Paris, France-based bank's subsidiaries moved the funds in question "through the U.S. financial system on behalf of sanctioned entities located in Sudan, Burma, Iran, and Cuba."

The deceptive practices of these subsidiaries "deprived the United States and CACIB's New York branch and other U.S. financial institutions of the ability to filter for, and consequently block or reject, sanctioned payments," according to a statement.

Sudanese business organizations represent the brunt of the $312 million in unlawful payments, but clients located in Burma, Iran and Cuba were at play as well, regulators say.

The United States says Credit Agricole's employees carried out the scheme consciously, despite awareness "of U.S. sanctions against Sudan and the fact that the sanctions applied to payments the bank sent to the United States."

Six of 11 Sudanese banks that Credit Agricole employees permitted to maintain U.S. dollar accounts with the bank were "specially designated nationals," according to the DOJ statement.

To mask the unlawful payments sent through the United States, Credit Agricole's subsidiaries primarily relied on cover payments, prosecutors continue.

The U.S. Department of Justice filed the deferred prosecution agreement that spells out the penalties, along with a one-count felony criminal information and a related civil forfeiture complaint against the Paris-based bank, in D.C.

For a forfeiture totaling $312 million, Credit Agricole is to pay $156 million to the U.S. Attorney's Office for the District of Columbia and $156 million to the Manhattan District Attorney's Office.

Credit Agricole agreed to a cease-and-desist order, as well, the Board of Governors of the Federal Reserve System announced.

In addition to taking certain remedial steps to ensure its compliance with U.S. law going forward, the bank will pay a penalty of $90.3 million, that system added.

Bringing Credit Agricole's total payments to $787.3 million, the New York State Department of Financial Services announced that the bank is paying it a second penalty of $385 million.

That New York deal requires Credit Agricole to employ a compliance consultant for one year as well.

Though the Treasury Department's Office of Foreign Assets Control levied its own $329.5 million fine, regulators noted that this amount "will be satisfied by the payments to federal and local agencies."

Credit Agricole entered into a separate deferred prosecution agreement with the Manhattan DA.

In the corresponding factual statement, the bank "admitted that it violated New York State law by falsifying the records of New York financial institutions," according to a statement.

The government accuses Credit Agricole of "knowingly and willfully conspiring to defraud the United States" and to violate the International Emergency Economic Powers Act and the Trading With the Enemy Act.

"CACIB has waived federal indictment, agreed to the filing of the information and civil forfeiture complaint, and has accepted responsibility for its criminal conduct and that of its employees," the Justice Department said.

Credit Agricole employs more than 7,000 people and has a presence in at least 30 countries.

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