Credit Suisse To Pay $536 Million For Helping Rogue States Get Dollars

Credit Suisse, the financial giant has agreed to pay $536 million to settle a case with the Justice Department after federal prosecutors accused the banking company of helping Iran, Syria, Burma and Cuba to skirt U.S. rules that make it more difficult for those countries to obtain U.S. currency.

Attorney General Eric Holder said in a statement:

Today we are announcing the outcome of a major investigation into massive financial misconduct at one of the world's largest global banks, Credit Suisse. In both its scope and complexity, the criminal misconduct perpetrated by Credit Suisse in this case is simply astounding. Indeed, as set forth in the court documents filed today, this case offers a stark and disturbing example of the lengths to which some corporate wrongdoers are willing to go in seeking ill-gotten financial gains.

It is exactly the type of wrongdoing that has led to the erosion of the public's confidence in our financial security and institutions. And it is the kind of financial misconduct we at the Department of Justice will continue to target aggressively.

For more than a decade, Credit Suisse did business with and for countries that the United States had specifically banned from our financial systems. The rules that prohibited financial transactions with these sanctioned nations were in place for many years. Credit Suisse, like all other major global banks, knew well that the United States would not process financial transactions from individuals or companies in places like Iran, Libya, Sudan, Burma, and Cuba.

 

But rather than adhere to the law and decline to serve these customers, Credit Suisse established a business model to allow these rogue players access to U.S. dollars. 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. They created a "how-to" book on committing a crime — and it worked well for years.

In another case, a Credit Suisse team leader circulated an email with screen shots of payment applications, showing how to format messages to ensure that they would pass through the United States undetected.

Credit Suisse said it was pleased with the outcome, especially since it had participated in the investigation which it had previously disclosed.

It also said it has taken steps to prevent a repeat of the activity that got it in trouble. An excerpt from its statement:

Credit Suisse had previously disclosed the investigation by US authorities and that it was conducting an internal review into certain US dollar payments involving countries, persons or entities that may be subject to US economic sanctions. In 2005, Credit Suisse decided to exit the business in question and subsequently proactively undertook an extensive independent investigation into the Zurich-based payment activity and other practices, working closely and constructively with regulators and US authorities. Credit Suisse's internal review has now been concluded and discussed with these and other government authorities including Credit Suisse's main regulator, the Swiss Financial Market Supervisory Authority, FINMA.

Credit Suisse is committed to the highest standards of integrity and regulatory compliance in all its businesses, and takes this matter extremely seriously. Credit Suisse has enhanced its procedures to prevent practices of this type from occurring in the future.