On Wednesday April 15, Manhattan District Attorney Cyrus R. Vance, Jr. announced the sentencing and final resolution of the criminal investigation into BNP Paribas S.A. (“BNPP”) for violating U.S. sanctions and falsifying the business records of financial institutions in Manhattan. On June 30, 2014, BNPP entered a guilty plea to charges of Falsifying Business Records in the First Degree and Conspiracy in the Fifth Degree for illicitly moving billions of dollars through banks in Manhattan on behalf of Sudanese, Iranian, and Cuban clients. As part of the plea, BNPP also paid a record total of $8,833,600,000 in criminal penalties.
“Our position at the center of an international marketplace and global financial capital gives my Office the authority to pursue cases far beyond the scope of most local prosecutors’ offices,” said District Attorney Vance. “As a result of our experience and leadership in this area, we have initiated and pursued investigations into illicit money movement and sanctions violations worldwide. By pursuing these cases, we have brought about fundamental change in the way financial institutions conduct business, with heightened awareness and vigilance with respect to dealing with potentially dangerous sanctioned entities.”
The settlement, which amounts to nearly $8.9 billion in total, includes the resolutions of parallel regulatory inquiries, through which the Board of Governors of the Federal Reserve System and the New York State Department of Financial Services imposed civil monetary penalties in the amount of $508,000,000 and $2,243,400,000, respectively, with these amounts being credited against the total forfeiture amount. The total amount also includes a settlement of $963,619,900, reached with the Office of Foreign Assets Control of the United States Department of the Treasury, arising from an inquiry into the same pattern of conduct.
As admitted in the guilty plea, between 2004 and 2012, BNPP moved nearly $8.9 billion through the U.S. financial system and Manhattan-based bank branches on behalf of clients from Iran, Cuba, Sudan, and other sanctioned entities. In order to do so, BNPP modified and omitted references to funding sources on payment messages and established accounts with satellite banks for the explicit purpose of facilitating transactions with sanctioned banks and entities. Additionally, BNPP directed employees to omit mention of sanctioned entities on payment messages, removed information that would have revealed the involvement of a sanctioned entity, and purposefully transmitted false or incomplete payment messages through local institutions, including BNPP’s own affiliate in New York. The prohibited dollar-denominated transactions facilitated by BNPP violated New York laws by causing false payment messages to be filed with local entities, thereby concealing the illegal nature of the transactions and deceiving U.S. banks into processing the illegal payments.
Pursuant to the plea agreement and the resolution of the joint investigation, BNPP agreed to adhere to best practices for international banking transparency, implement procedures and training designed to ensure compliance with U.S. sanctions, and pay nearly $8.9 billion in criminal penalties and forfeiture.
The investigation was conducted jointly with the U.S. Department of Justice’s Asset Forfeiture and Money Laundering Section, the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the United States Internal Revenue Service Criminal Investigation.
The BNPP case was prosecuted by former Assistant District Attorney Edward Starishevsky, Senior Counsel for International Financial Investigations, and Assistant District Attorney Kim Han, Deputy Chief of the Tax Crimes Unit, under the supervision of Polly Greenberg, Chief of the Major Economic Crimes Bureau, Christopher Conroy, Principal Deputy Chief of the Major Economic Crimes Bureau, and Executive Assistant District Attorney David Szuchman, Chief of the Investigation Division. Financial Intelligence Analyst Bonnie Robinson, and former Investigative Analysts Trevor Chenoweth and Lisa Daniels assisted in the investigation.
In December 2014, District Attorney Vance and a team of prosecutors and analysts from the Office’s Major Economic Crimes Bureau received the Assistant Attorney General’s Award for Exceptional Service from the U.S. Department of Justice in recognition of significant achievements in the case of the People v. BNP Paribas. The award is presented annually to honor individuals for their unique contributions and dedication to achieving the goals of the Criminal Division and Department of Justice.