Newspaper article International New York Times

Bank to Pay $1.45 Billion to Settle Raft of U.S. Cases ; Commerzbank Admits Roles in Accounting Fraud and Sanctions Violations

Newspaper article International New York Times

Bank to Pay $1.45 Billion to Settle Raft of U.S. Cases ; Commerzbank Admits Roles in Accounting Fraud and Sanctions Violations

Article excerpt

The settlement covers the bank's role in enabling a huge accounting scheme and other illicit transactions, state and federal authorities announced.

Commerzbank agreed on Thursday to pay nearly $1.5 billion to settle civil and criminal charges related to its role in enabling a huge accounting scheme and other illicit transactions, New York State and federal authorities announced.

The settlement closes the book on several overlapping investigations into the bank, which is based in Frankfurt and is Germany's second-largest lender after Deutsche Bank. The agreement also caps months of negotiation that dragged on as new evidence of wrongdoing continued to emerge.

Part of the case focused on the bank's dealings with Iran and other countries blacklisted by the United States, a common sore spot for international banks. Commerzbank processed hundreds of millions of dollars through the United States financial system on behalf of Iranian and Sudanese entities, the authorities said, and deleted data from wire transfers that would have disclosed the true identity of the sanctioned companies.

Another element of the case focused on the bank's relationship with the Olympus Corporation, the Japanese manufacturer of medical devices and cameras that was accused of orchestrating a huge accounting fraud. Commerzbank, the authorities say, provided a vehicle for the fraud, acting as both a lender to Olympus and conducting more than $1.6 billion in transactions to support the fraud.

"Commerzbank stands charged with Bank Secrecy Act criminal offenses for its acute, institutional anti-money laundering deficiencies that allowed over a billion dollars of the Olympus fraud to flow through its New York office," Preet Bharara, the United States attorney in Manhattan, said in a statement. …

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