Associated Press
Nov. 9, 2005 12:00 AM
NEW YORK - The
nation's oldest bank, The Bank of New York, has
agreed to pay $38 million in fines and adopt
reforms to end a long-running federal
investigation into fraud and money laundering,
prosecutors said Tuesday.
In exchange, U.S. Attorney Roslynn Mauskopf of Brooklyn and U.S. Attorney Michael Garcia of Manhattan said they would not prosecute the bank for failing to enforce federally mandated anti-money laundering measures.
The agreement stems largely from an international scheme that U.S. authorities said involved $7 billion in illicit transfers from Russia in the late 1990s. The case resulted in a Bank of New York executive and her husband pleading guilty in 2000 to laundering.
The bank will be required to forfeit $26 million to the government and $12 million to victims of fraud. It also will adopt reforms that will be monitored by an outside examiner for the next three years.
Mauskopf and Garcia said in a statement that as part of the agreement the bank admitted some of its officers intentionally deceived federal regulators by purposely failing to disclose evidence of crimes by customers and employees, as required by a previous agreement with the Federal Reserve Bank of New York. The result was at least $18 million in losses to victims, they said.
Officials at the Bank of New York said they already had implemented many of the reforms, and had previously set aside $38 million to avoid any impact on future earnings.
In exchange, U.S. Attorney Roslynn Mauskopf of Brooklyn and U.S. Attorney Michael Garcia of Manhattan said they would not prosecute the bank for failing to enforce federally mandated anti-money laundering measures.
The agreement stems largely from an international scheme that U.S. authorities said involved $7 billion in illicit transfers from Russia in the late 1990s. The case resulted in a Bank of New York executive and her husband pleading guilty in 2000 to laundering.
The bank will be required to forfeit $26 million to the government and $12 million to victims of fraud. It also will adopt reforms that will be monitored by an outside examiner for the next three years.
Mauskopf and Garcia said in a statement that as part of the agreement the bank admitted some of its officers intentionally deceived federal regulators by purposely failing to disclose evidence of crimes by customers and employees, as required by a previous agreement with the Federal Reserve Bank of New York. The result was at least $18 million in losses to victims, they said.
Officials at the Bank of New York said they already had implemented many of the reforms, and had previously set aside $38 million to avoid any impact on future earnings.