According to a report prepared by the Manhattan Institute, a conservative think-tank based in New York, the Justice Department has entered into more than 200 deferred prosecution or non-prosecution agreements in the last decade. Since 2009, 18 of the total federal agreements have involved financial institutions.
Here are some of the major fines in the financial sector since 2009:
1. August and December 2012, Standard Chartered, $667 million. Charge: Violating US Sanctions on transactions with Iran, Burma, Libya and Sudan.
The New York Department of Financial Services (DFS) accused the British bank of scheming with the Iranian government over a decade to move billions of dollars through the U.S. financial system. In the nine-month investigation, the DFS found that the U.S. unit of the bank had hidden thousands of transactions with Iran worth $250 billion.
2. June 2012, ING Bank NV, $619 million. Charge: Covering up illegal transactions with Cuban and Iranian entities.
U.S. authorities said ING moved $1.6 billion illegally through banks in the United States from the early 1990s by eliminating payment information that would have revealed the involvement of sanctioned countries and entities. According to prosecutors, ING told clients from sanctioned countries how to evade computer filters designed to prevent them from gaining access to the U.S. financial system.
3. August 2010, Barclays, $298 million: Charge: Allowing client payments from Cuba and Sudan.
Authorities said that bank employees deleted and changed payment messages referencing banned countries, and routed some payments through an internal account to make them seem like they were coming from England.
The London-based bank admitted that between 1995 and 2006 it helped banks in Iran, Cuba and Libya, Myanmar and Sudan evade U.S. regulations banning payments into the U.S. from these countries.
4. March 2010, Wachovia Bank, $160 million. Charge: Lacking robust anti-money laundering measures, allowing Mexican cartels to launder millions of dollars worth of drug proceedings.
An investigation, which began after Mexican soldiers intercepted a plane carrying cocaine in 2005, ultimately uncovered at least $110 million in drug profits laundered from Mexico through Wachovia. Authorities made the discovery after following the paper trail behind the money used to purchase the plane carrying the drugs. Authorities uncovered billions of dollars in wire transfers and cash shipments through Mexican currency exchange houses into Wachovia accounts.
5. December 2009, Credit Suisse, $536 million. Charge: Allowing clients in Iran, Libya, Sudan, Myanmar, and Cuba to conduct financial transactions.
U.S. officials accused Credit Suisse of actively helping its clients avoid detection by U.S. authorities. The bank helped its Iranian clients avoid detection by telling them that bank staff would check each message individually to make sure their transactions remain undetected. “At one point, the company even developed a pamphlet for its Iranian clients, explaining how to fill out payment messages so as not to trigger U.S. filters,” said in a statement the U.S. Attorney General. “They created a ‘how-to’ book on committing a crime – and it worked well for years.”
All of these cases have the same conclusion: the financial entities avoided criminal charges by entering into a deferred prosecution with authorities, in spite of willfully violating U.S. laws.
The Justice Department made deferred prosecution an official alternative after changing its guidelines for federal prosecution of business organizations in 2008.
“Under appropriate circumstances, a deferred prosecution or non-prosecution agreement can help restore the integrity of a company’s operations and preserve the financial viability of a corporation that has engaged in criminal conduct,” said a 2008 U.S. Department of Justice memo.
In the HSBC case, apprehensions over the effects that criminal charges could have had on the financial system played an important role in the decision to pursue a deferred agreement. “State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system,” reported the New York Times.
The trend in these types of settlements suggests that they have become commonplace and raises serious questions about whether the government treats financial institutions as if they are “too big to jail” – even when they aid rogue regimes and cartels.