Former ABN Amro Bank Agrees To Forfeit $500 Million In Connection With Conspiracy To Defraud US And BSA Violation

The former ABN AMRO Bank N.V., now named the Royal Bank of Scotland N.V., has agreed to forfeit $500 million to the United States in connection with a conspiracy to defraud the United States, to violate the International Emergency Economic Powers Act (“IEEPA”) and to violate the Trading with the Enemy Act (“TWEA”), as well as a violation of the Bank Secrecy Act (“BSA”). 

A criminal information was filed today in U.S. District Court for the District of Columbia charging the former ABN AMRO, a Dutch corporation that was headquartered in Amsterdam, with one count of violating the BSA and one count of conspiracy to defraud the United States and violate the IEEPA and TWEA.   The bank waived indictment, agreed to the filing of the information, and accepted and acknowledged responsibility for its conduct.  ABN AMRO agreed to forfeit $500 million as part of a deferred prosecution agreement, also filed today in the District of Columbia.  U.S. District Court Judge Colleen Kollar-Kotelly accepted the deferred prosecution agreement.
 
According to court documents:  From approximately 1995 and continuing through December 2005, certain offices, branches, affiliates and subsidiaries of ABN AMRO removed or altered names and references to sanctioned countries from payment messages.  ABN AMRO implemented procedures and a special manual queue to flag payments involving sanctioned countries so that ABN AMRO could amend any problematic text and it added instructions to payment manuals on how to process transactions with these countries in order to circumvent the laws of the United States.  Despite the institution of improved controls by ABN and its subsidiaries and affiliates after 2005, a limited number of additional transactions involving sanctioned countries occurred from 2006 through 2007. 
 
According to court documents: ABN AMRO used similar stripping procedures when processing U.S. dollar checks, traveler’s checks, letters of credit and foreign exchange transactions related to sanctioned countries.  ABN AMRO and the sanctioned entities knew and discussed the fact that, without such alterations, amendments and code words, the automated OFAC filters at banks in the United States would likely halt the payment messages and other transactions, and, in many cases, the banks would reject or block the sanctions-related transactions and report the same to OFAC.  By removing or altering material information, these payments and other transactions would pass undetected through filters at U.S. financial institutions.  This scheme allowed U.S. sanctioned countries and entities to move hundreds of millions of dollars through the U.S. financial system.
 
The BSA violations involved the failure of the New York branch of ABN AMRO to maintain adequate anti-money laundering procedures and processes.  According to court documents, beginning as early as January 1998 and continuing until approximately December 2005, ABN AMRO’s New York branch office willfully failed to establish an adequate AML program.  According to court documents, the office did not have adequate staffing, training and oversight, which permitted multiple high-risk shell companies and foreign financial institutions to use the bank to launder money through the United States.  According to court documents, more than $3.2 billion dollars involving shell companies and high risk transactions with foreign financial institutions flowed through ABN AMRO’s New York branch.  ABN AMRO also admitted it failed to maintain proper documentation regarding its customers or maintain readily available documentation about its high risk clients.