Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Total BNP Paribas fine is $8.97 billion for money laundering

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I previously mentioned the total penalty BNP Paribas agreed to pay for laundering money to evade U.S. trade sanctions was $8,833.6M. The updated WSJ article said the total settlement is $8.97B. After realizing the disconnect, I went back to the federal plea deal. I missed that amount until this morning.

The forfeiture is $8,833.6M, which represents the amount the feds say on page 1 of the plea deal is

… representing the amount of proceeds traceable to the violations set forth in Count One of the Information.

Payments to the Federal Reserve ($508M), NY DFS ($2,240.4M) and NY County DA (up to $2,243.4M) are credited to that amount.

That $8.8B amount is the Total Forfeiture Amount.

In addition, there is a criminal fine for the illegal behavior. The methodology of working to a number is on page 3 and 4 of the plea deal. Conclusion is

…the appropriate fine amount is $140 million (the “Stipulated Fine Amount”), representing twice the amount of pecuniary gain to BNPP as a result of the offense conduct.

This is in addition to the forfeiture amount above. The plea deal says

Similarly, BNPP agrees that it will not receive credit toward the Total Forfeiture Amount as a result of its payment of the Stipulated Fine Amount.

The total dollar penalty is then:

  • $8,833.6M – Total Forfeiture Amount
  • $    140M – Stipulated Fine Amount
  • $8,973.6M – total penalty

The DFS consent decree says the bank will pay the state of New York $1.05B to settle the plea deal with the New York County District Attorney. This is less that the $2.2B allowed for a credit allowed under the federal deal. The difference will flow to the DoJ.

So here is my calculation of how the $8.97B will be split, ignoring another minimal four hundred dollars for a special assessment, which seems to be required as a part of any conviction:

 $ million  agency
        2,240.4  NY state Department of Financial Services
           508.0  US Federal Reserve Bank
        1,005.0  State of New York
        5,080.2  US Department of Justice
           140.0  United States Treasury
        8,973.6  total monetary penalty

 

Why so much discussion of banking fiascos?

As I’ve mentioned before, banks are the topic of so much discussion on this blog because that is an interest area of mine. Doesn’t fit on any of my other blogs, so this is the place. Also, I’m diving deep into some issues (Libor rate fixing, money laundering to facilitate tax evasion, and money laundering to evade US trade sanctions) to simultaneously understand what is going on in the world around us and to learn how the federal criminal justice system works.

Written by Jim Ulvog

July 1, 2014, 8:33 am at 8:33 am

Posted in Fraud, Other stuff

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  1. […] Total BNP Paribas fine is $8.97 billion for money laundering […]


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