May 22, 2017
Once Again, DOJ Announces Megabank Crime With No Crook on the Hook
Statements of Public Citizen Experts
Note: The U.S. Department of Justice (DOJ) today announced what it calls a settlement and “non-prosecution agreement” with Citigroup covering violations of anti-money laundering laws. Citigroup agreed to pay $97.4 million.
“Despite announcing what are described as criminal violations by a Citigroup subsidiary failing to detect money laundering, U.S. Attorney General Jeff Sessions announced no charges against the responsible individuals.
The case involved more than 18,000 alerts covering $142 million in what the DOJ calls ‘potentially suspicious remittance transactions’ at Citi’s Banamex USA division. The DOJ charged that the firm made at least $92 million in these transactions. Yet it is requiring Citi to forfeit only $97.4 million.
This agreement technically doesn’t protect individuals from future prosecution. But the DOJ sacrifices leverage by settling this case now, since final penalties could be conditioned on cooperation. What’s more, the DOJ identifies four individuals already sanctioned by bank regulators, indicating that the government already knows at least some responsible actors.
The Bank Secrecy Act makes it a crime to ‘willfully fail to establish and maintain’ a robust anti-money laundering compliance program. Details released by the DOJ show that between 2007 and 2012, the firm processed more than 30 million remittances to Mexico covering $8.8 billion with ‘virtually no investigation for suspicious activity.’ In one instance, a Mexican beneficiary received 1,400 remittances from more than 950 different senders in 40 different states in the U.S. But the Citi subsidiary never filed a ‘suspicious activity report,’ which is a bank investigation of the issue.
Sessions plans to renew mass incarceration of minor drug offenders. With this settlement, he’s also reassuring megabankers that a different standard applies to them.”
– Bartlett Naylor, financial policy advocate, Public Citizen’s Congress Watch division
“Tough Guy Attorney General Jeff Sessions, who wants to throw the book at nonviolent drug offenders and apply the harshest possible treatment to immigrants in this country without authorization, turns into Marshmallow Sessions when it comes to corporate crime. Citigroup admitted to criminal violations of anti-money laundering obligations, but will face no criminal prosecution. Instead, the company enters into a discredited non-prosecution agreement, which amounts to little more than a promise not to break the law in the future. In Donald Trump and Jeff Sessions’ America, it turns out, crime does pay – so long as you incorporate.”
– Robert Weissman, president, Public Citizen