The big Italian bank failed to flag questionable transactions and deviated from policies designed to root out wrongdoing, which “seriously (compromised) the security of the international financial system,” said Maria Vullo, superintendent of the New York Department of Financial Services.
“DFS uncovered sweeping violations requiring that this institution must make immediate and fundamental changes in the way it conducts business,” she said.
Thursday's fine was a followup to a 2007 agreement between the bank and regulators after officials from the DFS and the New York Federal Reserve bank uncovered problems at Intesa.
Intesa failed to upgrade its practices for combating money laundering, as it promised in the 2007 agreement, and failed to maintain “true and accurate books” of transactions, as required under New York banking law, DFS said.
Bank staff missed thousands of alerts of suspicious transactions and wrongly classified a large percentage of alerts as “false positives,” which meant they were dismissed when they should have been probed more fully.
Other Intesa violations included the use of “opaque methods and practices” to conduct more than 2,700 US dollar clearing transactions between 2002 and 2006 amounting to more than $11 billion on behalf of Iranian entities, the agency said.
That system allowed Intesa to thwart supervision from regulators of transactions that may have violated US sanctions.
Under Thursday's settlement, Intesa agreed to extend for up to two years an independent consultant to upgrade its anti-money laundering system.
The Intesa fine comes on the heels of earlier penalties of several other large banks for money laundering violations. In November, DFS fined Agricultural Bank of China $215 million after it was found to have obscured suspicious transactions involving Russia, China, Afghanistan and other countries.