13th February 2018

Rabobank guilty of anti-money laundering failures and conspiracy to defraud the US

As a result of Rabobank’s bank secrecy act and anti-money laundering failures it processed over $360m in illicit funds and then conspired with its executives in an attempt to conceal these ongoing failures from its regulator, according to US Magistrate Judge Jill L Burkhardt

Rabobank National Association (Rabobank), a Roseville, California subsidiary of the Netherlands-based Co-operative Rabobank UA, appeared before the US Judge and pleaded guilty to a felony conspiracy charge for impairing, impeding and obstructing its primary regulator, the Department of the Treasury’s Office of the Comptroller of the Currency (the OCC) by concealing deficiencies in its anti-money laundering (AML) programme and for obstructing the OCC’s examination of Rabobank. Rabobank will forfeit $368,701,259 as a result of allowing illicit funds to be processed through the bank without adequate Bank Secrecy Act (BSA) or AML review.

At the hearing, Rabobank pleaded guilty to conspiracy to defraud the US and to corruptly obstruct an examination of a financial institution. In pleading guilty, Rabobank admitted to conspiring with several former executives to defraud the US 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.

Rabobank’s guilty plea comes less than two months after a former Rabobank vice president, George Martin, entered into a deferred prosecution agreement with the US for his role in aiding and abetting Rabobank’s failure to maintain an AML programme that met BSA requirements. Mr Martin admitted his conduct in federal court in San Diego on 14 December, 2017. As part of its guilty plea, Rabobank agreed to cooperate with the US’s continuing investigation.

“When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organised crime, and money-laundering activities, it chose to look the other way and to cover up deficiencies in its anti-money laundering programme,” said Acting Assistant Attorney General Cronan.

“Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies. The integrity of our financial system depends on prompt reporting by banks and other financial institutions of suspicious, potentially criminal transactions, and on these entities’ truthfulness and transparency with their regulators.

"Rabobank’s guilty plea and forfeiture of more than $360m is a warning to financial institutions that there are significant consequences for banks that engage in obstructive conduct in an effort to hide their anti-money laundering program failures from their regulators.”