Search

Ex-Rabobank CEO fined $20,000 for failing to provide an AML report

The Office of the Comptroller of the Currency (OCC) this month imposed a $20,000 punishment on the former CEO of Rabobank, N.A. for his alleged involvement in impeding a Bank Secrecy Act (BSA) program examination.

While the OCC was conducting an investigation at the bank in 2013, the agency claimed that John Ryan, who served as CEO of Rabobank from September 2012 to December 2015, prevented a material audit report from being submitted to the agency. In December 2013, Rabobank and the OCC reached an agreement on a consent decree addressing shortcomings in the bank's BSA/anti-money laundering (AML) compliance program. In 2018 the regulator will punish the bank $50 million as a result of its investigation's findings.


Ryan and the OCC struck a settlement on July 28 that was made public on Thursday.

In a $369 million enforcement action by the Department of Justice, Rabobank pleaded guilty in February 2018 to "conspiring with several former executives to defraud the United States by unlawfully impeding the OCC’s ability to regulate the bank and to obstruct an examination by the OCC of its operations throughout California, including its Calexico and Tecate bank branches." Ryan was not mentioned in the guilty plea, but George Martin, a former vice president of Rabobank, was after he acknowledged his involvement in the scam in December 2017.


Failures in Rabobank's anti-money laundering program "allowed hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural bank branches in Imperial County, and transferred via wire transfers, checks, and cash transactions, without proper notification to federal regulators as required by law," the Justice Department claimed. According to the agency, the bank's officials made an effort to hide this knowledge at the time in order to avoid penalties comparable to those it paid in 2006 and 2008 for "nearly identical failures."


In collaboration with the Justice Department's action, the OCC was fined $50 million. The bank was also criticized by the OCC for flaws in its systems for conducting enhanced and client due diligence as well as for failing to record $233 million worth of previously unreported suspicious behavior.


In accordance with the OCC's consent order from last month, Ryan was accused of acting in a way that "engaged in violations of the law and unsafe or unsound practices and breached his fiduciary duty to the bank, which caused the bank to suffer financial loss or other damage and demonstrated continuing disregard for the safety or soundness of the bank."


Ryan did neither agree or disagree with the regulator's conclusions. His sanction is lower than the $50,000 fine the OCC previously imposed on former chief compliance officer of Rabobank Laura Akahoshi for her suspected involvement in the scheme.


Regulators continue to monitor Rabobank's AML program. In October 2021, the Dutch Central Bank issued a warning to Rabobank over violations of the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act that, if not corrected, could result in future enforcement action.

By fLEXI tEAM

10 views0 comments