New York State authorities are poised to impose a $250 million fine on the Bank of Tokyo-Mitsubishi UFJ over claims that the bank, Japan’s largest by assets, transferred illicit funds on behalf of Iran and other countries blacklisted from doing business in the United States, according to people briefed on the case.
The bank, which is expected to settle the case on Thursday with New York’s financial regulator, Benjamin M. Lawsky, was accused of routing 28,000 payments worth about $100 billion through its New York branches. To avoid detection, Mr. Lawsky is expected to contend, the bank stripped information from the wire transfers that could have exposed the identity of the Iranian entities.
The bank approved the illegal transfers over at least a five-year span, ending in 2007, according to the people briefed on the case.
In addition to Iran, the bank is thought to have had dealings with Sudan and Myanmar. At the time, those countries were all operating under United States sanctions.
A spokesman for the Bank of Tokyo Mitsubishi declined to comment. The bank, according to the people briefed on the case, is thought to have voluntarily alerted regulators to its activity. It also has moved to bolster its internal controls in the years since.
Still, the $250 million penalty dwarfs an earlier settlement that the bank reached with an arm of the Treasury Department. Last year, the agency imposed an $8.6 million fine on the bank over its violations of United States sanctions.
The action on Thursday is Mr. Lawsky’s latest attack on foreign banks that enable sanctioned countries like Iran to tap into the American financial system. In August, Mr. Lawsky struck a $340 million pact with the British bank Standard Chartered, which he accused of transferring hundreds of billions of dollars in tainted money for Iran and lying to regulators.
The case became a source of tension between Mr. Lawsky and federal authorities, who were slower to act against the bank. In December, federal regulators and prosecutors reached their own deal with the bank.
It is unclear whether Mr. Lawsky’s action on Thursday will aggravate those tensions, given that he imposed a fine nearly 30-times that of federal authorities.
Mr. Lawsky’s aggressive style – and rare decision to act alone – inspired comparisons to Eliot L. Spitzer. Mr. Spitzer, during his tenure as New York’s attorney general, similarly received praise and criticism for his tough tactics on Wall Street and his tendency to muscle aside federal authorities.
A spokesman for Mr. Lawsky’s agency, the New York State Department of Financial Services, declined to comment.
The action against the Japanese bank caps a busy week for Mr. Lawsky. On Tuesday, the New York regulator took aim at the bank consulting industry, leveling a $10 million fine and one-year ban against Deloitte, one of the nation’s most prominent consultants. Mr. Lawsky accused Deloitte of watering down recommendations it made about fixing Standard Chartered’s dealings with Iran. It did so, he said, “based primarily on Standard Chartered’s objection.”
In the case against the Bank of Tokyo-Mitsubishi, Mr. Lawsky is expected to order the bank to hire an outside consultant to examine its operations. The consultant, the people briefed on the case said, will have to abide by a new set of standards that Mr. Lawsky unveiled this week.
Article source: http://dealbook.nytimes.com/2013/06/20/worlds-largest-bank-to-pay-250-million-fine-for-iran-deals/?partner=rss&emc=rss