It wouldn’t be a week in America without a criminal banking scandal and this week did not disappoint. BNP Paribas SA was sentenced to just five years probation by a U.S. judge on Friday in connection with a record $8.9 billion fine for violating sanctions against Sudan, Cuba and Iran.
The case is yet another record ‘fine’ for a bank in connection with criminal actions used to make obscene profits and pay even larger bonuses. The fine shows that while the banks are clearly operating as criminal enterprises, the sort that would land an Italian from Chicago or New Jersey in jail for life, the bankers are above the law and are able to pay their way out – with the same profits they got illegally, no less.
To highlight the insanity of the ‘sanctions’ U.S. District Judge Lorna Schofield in Manhattan formally ordered the French bank to forfeit $8.83 billion of ill-gotten gains and pay a paltry $140 million fine.
The $140 million fine makes the settlement the cheapest on record – a mere few thousand dollars per employee to keep on committing crime and stay out of jail.
The case marked the first time a global bank pleaded guilty to violations of U.S. economic sanctions, the Justice Department said, although its clear this mean very little and is mere wordplay, designed to assure hard working Americans this type of thing will ‘never happen again’.
Yet this conduct happens all the time, at all the banks. In BNP’s case it came after a guilty plea in July to conspiring from 2004 to 2012 to violate the International Emergency Economic Powers Act and the Trading with the Enemy Act.
New year, different criminal racket used to hit the numbers.
In this case authorities said that BNP essentially functioned as the “central bank for the government of Sudan,” concealing its tracks and failing to cooperate when first contacted by law enforcement.
Prosecutors said BNP also evaded sanctions against companies in Iran and Cuba, by stripping information from wire transfers so they could pass through the U.S. system without raising red flags. The information stripping was a widespread industry practice used to launder money for both sanctions busting and tax evasion. Megabank UBS was found guilty for the practice earlier this year.
BNP’s sentence was a big win for the bank as it was reached along with an agreement with the U.S. Labor Department that would allow it to continue to manage retirement plans despite the plea. The department granted BNP that exemption this month, which was integral to the deal.
Highlighting this is just business as usual at the bank, this is the second multi-billion dollar settlement for the bank this month alone. Yes, you read that correctly – this month alone.
A New York state court judge on April 15 sentenced BNP Paribas in a related case in which it agreed to forfeit $2.24 billion. No fines were rendered in that case, which allows BNP to pay the government with criminal proceeds and which effectively allows the bank to try various criminal activities and then if it gets caught, it simply gives the stolen money back with no actual penalty.
Friday’s sentencing came a day after BNP Paribas reported first-quarter net income of 1.65 billion euros ($1.83 billion), up 17.5 percent. Revenue grew 11.6 percent to 11.1 billion euros.
The numbers beg the question: what illegal scheme has the company concocted now to have such astounding financial results? It surely musn’t be legal.