Italian banking group Intesa SanPaolo and its New York branch has been fined $235m by New York’s Department of Financial Services (DFS) for flouting anti-money laundering and bank secrecy laws.
The regulator said that the bank’s compliance staff mismanaged its transaction monitoring system and failed to identify suspicious transactions.
The bank was also alleged of processing suspicious transactions involving shell companies through the New York Branch and deliberately hiding information from bank examiners.
DFS said that between 2002 and 2006, the bank used opaque methods to carry out over 2,700 US dollar clearing transactions, worth over $11bn, on behalf of Iranian clients and other entities possibly subject to US economic sanctions.
The bank also trained certain employees to handle transactions involving Iran so that those transactions could not be readily flagged, the regulator said.
Superintendent Vullo said: “Effective and responsible transaction monitoring systems are an essential tool in the battle against illicit transactions and terrorist financing in this age of risk. There is little doubt that the negligent conduct of this bank is the type of conduct that can fuel international criminal activity, thereby seriously compromising the security of the international financial system.
“DFS uncovered sweeping violations requiring that this institution must make immediate and fundamental changes in the way it conducts business.”