ING to pay $619 million to settle Cuba, Iran sanctions probe

ING Groep NV agreed to pay $619 million to settle U.S. charges it falsified financial records to bypass sanctions on countries including Cuba and Iran, the largest such penalty against a bank, Bloomberg reported.

ING Bank, a unit of Amsterdam-based ING Groep, moved billions of dollars through the financial system on behalf of Cuban and Iranian clients, violating U.S. sanctions by concealing the illegal nature of the transactions and deceiving U.S. banks into processing illegal wire payments, Manhattan District Attorney Cyrus Vance Jr. and the U.S. Department of Justice said in a statement.

The penalty is the largest ever against a bank in connection with U.S. sanctions violations, Assistant U.S. Attorney General for National Security Lisa Monaco said in the statement.

The settlement is part of a four-year investigation of "stripping," in which codes indicating the source of wire transfers are removed. Vance said his office has secured $1.8 billion in settlements since 2009. London-based Lloyds Banking Group Plc paid $350 million, Zurich-based Credit Suisse AG paid $536 million and Barclays Plc paid $298 million in agreements reached earlier in the probe into 10 banks that was begun by former District Attorney Robert Morgenthau.

'Strong Message'

"These cases give teeth to sanctions enforcement, send a strong message about the need for transparency in international banking, and ultimately contribute to the fight against money laundering and terror financing," Vance said.

The U.S. government restricts certain countries including Iran, Sudan and Cuba from using the U.S. banking system. The U.S. Department of the Treasury's Office of Foreign Assets Control administers economic sanctions against targeted foreign countries and regimes.

ING Bank moved more than $2 billion illegally through the U.S. financial system from the early 1990s to 2007 via more than 20,000 transactions on behalf of Cuba and Iran, according to court documents.

Half of the $619 million will be paid to the Manhattan District Attorney's office, which will distribute the money to the city and the state, Vance said in the statement. The other half will be paid to the U.S., Vance said.

"The violations that took place until 2007 are serious and unacceptable," Jan Hommen, CEO of ING Group, said in a statement. "Since starting the investigations in 2006, ING Bank has taken decisive actions to strengthen compliance throughout the organisation and heighten employee awareness of compliance risks."

'Rogue Nations'

Vance said in a speech on money laundering in Washington in November that more announcements on settlements would come.

"The foreign banks that were processing these payments for customers in Iran, Sudan, Libya and other rogue nations violated the law, and undermined international security, by enabling their U.S. correspondents to process wire payments that otherwise would have been rejected," Vance said at the time, according to a transcript of his speech. "They did so systematically, intentionally and as part of their daily business."

Vance also said in the speech that his office's probe of Islamic Republic of Iran Shipping Lines found that some U.S. banks had been deceived into executing transactions on behalf of Iranian entities seeking to advance that nation's nuclear ambitions. The shipping line was charged in June with a scheme to move more than $60 million through at least seven U.S. banks.