Rabobank to pay a $373 million fine for money laundering for drug cartels

January 22, 2018

In what appears to be an attempt to avoid a criminal indictment, Rabobank is planning to pay a $373 million fine to the U.S. government for alleged money laundering for Mexican drug cartels, allegations first raised by an Arroyo Grande branch bank employee. [Cal Coast Times]

Beginning in about 2010, bank management would routinely send armored trucks to pick up cash at its branch in Calexico, a tiny town just across the border from Mexicali. Wire transfers were then sent from the Rabobank in Calexico to customers across the border, according to bank insiders.

The Bank Secrecy Act of 1970 requires banks in the United States to work with the government to detect and prevent money laundering. But, bank officials allegedly instructed employees to ignore signs of money laundering and repatriation of funds, said a bank insider.

Failing to properly report the transfers, not only permitted the bank to increase profits, but also allowed tens of million of dollars in drug money to be funneled across the border.

In 2011, George Martin, a former compliance department manager at Rabobank in Arroyo Grande, met with a CalCoastNews reporter to discuss his concerns, which he said were off the record while he looked for a new job. At the time, Martin had a family member who was undergoing medical treatments at a hospital in San Fransisco and he had concerns about his ability to earn a living and provide healthcare for his family, Martin said.

A few months later, Martin told a federal official about his concerns, Martin said.

In 2015, CalCoastNews exclusively reported that federal law enforcement agencies were investigating Rabobank over questions about whether the bank overlooked signs of money laundering by customers with connections to Mexican drug cartels. Investigators were also focused on the bank’s Financial Intelligence Unit’s Manager Stephen Byron and the bank’s former chief compliance officer Laura Akahoshi, a bank insider said.

On Dec. 14, 2017, Martin entered into a deferred prosecution agreement with the U.S. Attorney’s Office in San Diego. As long as Martin continues to cooperate with the investigation into Rabobank and several high-ranking bank employees, he will not be prosecuted with aiding and abetting violations of the Bank Secrecy Act.

A few weeks after Martin signed his agreement, Rabobank announced to shareholders it had set aside $374 million in anticipation of settling with the federal government and pleading guilty to withholding information from the U.S. Department of Treasury.

At this time, no bank employees have been indicted for failing to report money laundering for several Mexican drug cartels.







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25 Comments

  1. copperhead says:

    A fine? The bank should lose its charter and those involved should be prosecuted if the allegations are proven true. Ridiculous.

    (12) 12 Total Votes - 12 up - 0 down
    • MrYan says:

      It will never happen, as those with real money in the bank would stand to lose it if closed. FDIC and its’ $250,000 limit would not help them if the bank was fined out of existence. The investor class is always protected from loss. Those that have real money get to play by different rules.

      Hey Copperhead what would be your response if the President is accused similar money laundering charges? Just curious.
      A man the cannot get a loan in the USA from any bank because of repeated bankruptcy, yet finds plenty of funding for projects from Russian connected banks–as well as plenty of Russian buyers of that property? Those buyers regularly overpay for said property (to the tune of $50 million on one property alone). Money laundering 101 it what it is.
      As you say above,”if proven true”; would you have the same response for this President as you do for Rabobank Mgmt?
      Same game–different ball field is all.

      (-2) 2 Total Votes - 0 up - 2 down
      • copperhead says:

        Is accusing the president of money laundering the next tactic to be employed by the deep state? We had better order up another special prosecutor.
        Just curious, since Clinton lost the election and is no longer relevant, how much money has their foundation taken in?

        (6) 6 Total Votes - 6 up - 0 down
        • MrYan says:

          Money laundering has always been the long game in this investigation. You need to pay better attention. I mean really!!
          Do you have any idea how may prosecutors, especially financial ones, are currently working for Mueller? This president will be RICO-sauved by Mueller if he is given the time to do his job :-)

          Just so we’re clear–if you do business with someone (launder money) technically it is a form of collusion.
          I suppose I could go look at the books at the Clinton foundation to get your answer. Too bad I can’t do the same with this president. But you do know deflection is a tactic-not a logical argument–and usually unworthy of response. Your non-answer–logically speaking–says you’re good with Russian mobster ties to our current president.
          But but but …….Hilllary did it first. She ain’t president.

          (-2) 2 Total Votes - 0 up - 2 down
        • AmericaTheFree says:

          “Deep State”? Guess you’ve bought into the current madness known as “Nunes”, right? Or the alt-right’s “Whataboutism”? Clinton is not our President, Trump is.

          The right always blames the left for not getting over the fact that Hillary lost the Electoral College (notice I didn’t say election, because she didn’t) but from the right we’re constantly reminded of her, and her irrelevance. Convenient conservatism hypocrisy.

          (-1) 1 Total Votes - 0 up - 1 down
          • AmericaTheFree says:

            I’d be a bit remiss if I didn’t remind you copperhead that the Trump Foundation is closed for business and is under at least a couple of investigations, one from the feds’ and one from the state of NY. Why would that be? And, it appears the single largest beneficiary from that “charitable organization” was Trump’s legal defense fund.

            Trumpism at it’s very, very, very best!

            (0) 0 Total Votes - 0 up - 0 down
  2. George Bailey says:

    Ladies & Gentlemen,

    The top officials at Rabobank ought to be indicted immediately, and none of these perps should be allowed to ‘buy-off’ their prosecution by dissolving shareholder funds. Enough is enough.

    From Rabobank’s website:

    About Rabobank Group

    Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, and real estate services in more than 40 countries worldwide. Founded more than a century ago, Rabobank today is one of the largest banks in the world, with nearly $1 trillion in assets, and ranks among the 10 safest banks globally.

    OK, so this SUPPOSED global banking leader is led by crooks and resorts to money laundering for the global drug cartels? I say the government should seize ALL of their assets and force them into bankruptcy. The current CEO, Mark Borrecco, had a hand in trying to expand their business into Southern California, and I find it hard to believe that top management did not approve this felonious behavior.

    The CEO, Mark Borrecco, owes us all an explanation.

    Just saying,

    George Bailey

    (14) 14 Total Votes - 14 up - 0 down
  3. MrYan says:

    A $373 Million dollar fine for laundering money for drug dealers and no jail time for any of the upper mgmt. of Rabobank? I wonder how many deaths were associated with the money that was laundered? Participating in a crime (money laundering) for a profit motive makes you complicit for the underlying crime of murder.
    We’ll charge the low level co-conspirator’s with murder on a robbery gone bad–for example someone who drove someone to a location knowing they may commit a crime, but not a full participant in that crime. They’ll go down 25 to life. Same as the shooter.
    But a Banker? Who profits off the misery of thousands and the deaths of hundreds, we’ll just levy a fine.
    People who launder money are just as bad as the criminals they choose to do business with and should face the same consequences as El Chappo.

    The Russians, Chinese, and Mexican cartels are propped up by our most rich and powerful who gladly clean their ill gotten gains. It is these people who should be going to jail and not the drug user.
    Most of the money laundering has moved to real estate development after 9/11 due toincreased banking regs–so it is surprising a bank would be foolish to enter into this deal. They should have left it Trump/Kushner types to launder–they’re obviously better at it.

    (11) 11 Total Votes - 11 up - 0 down
  4. 1965buick says:

    Hope they’re happy.
    ‘It’s not wrong if you don’t get caught’ seems to be the mantra now.

    (17) 19 Total Votes - 18 up - 1 down
  5. JB Bronson says:

    Wake up America! There are more drugs and illegal immigrants coming under, around and over the actual
    border.

    Banks like Rabobank and Wells Fargo got caught, but more are dirty and a wall won’t change any of that.

    (15) 27 Total Votes - 21 up - 6 down
  6. SLOBorn says:

    Another side effect of our continuous “War on Drugs”. It’s a silly ass notion to think if we cannot somehow take the profit margin away from those foreign cartels that we’ll somehow win this “war”. Now we see how big banks are also profiting on the backs of our misspent tax dollars, and our citizens, it’s even more important to take a new look at how we educate, no not attack, the “end user”. It’s also important that the “gateway drug” known as alcohol, used first by the vast majority of young indulgers and the #1 drug of choice in this country, should have a fresh look on how we portray, tax and sell that drug in our society. It’s working for tobacco, why wouldn’t it with alcoholism?

    I’d rather see Rabobank be forced to fund drug and alcohol abuse education and treatment in those communities it does business in, from it’s bottom line, then paying fines that will probably be ill spent on some failed endeavor like a wall or war.

    (-11) 35 Total Votes - 12 up - 23 down
    • Jorge Estrada says:

      When extortion is affordable to the extent of calling it a fine, who is laundering the money?

      (7) 11 Total Votes - 9 up - 2 down
  7. Jorge Estrada says:

    Maybe the cash crops should grow over to Bitcoins? How do you say Bitcoins in Mexican, Chingasos? Ya, a million Chingasos really sounds like something……or I got busted for Chingasos laundering…..ha ha All of this is just as silly as no new taxes, let’s call it a fine.

    (-6) 16 Total Votes - 5 up - 11 down
  8. rukidding says:

    No prosecution for the guilt just have the shareholders pay the fee after they have received the profits from the crime. 100% sanctuary?

    (26) 30 Total Votes - 28 up - 2 down
  9. tomsquawk says:

    Put the money towards the wall and black flag the bank. also see if the bank is in compliance with the Bank Secrecy Act and the Travel Rule. “A Bank Secrecy Act (BSA) rule [31 CFR 103.33(g)]—often called the “Travel” rule—requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution”.

    (10) 26 Total Votes - 18 up - 8 down
    • SLOBorn says:

      “Put the money towards the wall…”

      I thought Mexico was suppose to pay for that, right? Put that money towards children’s education on the harms of drug use and treatment on the big pharm’ driven opioid epidemic. Makes much more sense, and would have much better long term real positive effects then any wall, anywhere, but especially one on our southern border.

      (4) 30 Total Votes - 17 up - 13 down
      • tomsquawk says:

        ok, not a bad idea, but still get into their compliance

        (0) 8 Total Votes - 4 up - 4 down
        • SLOBorn says:

          With the current administration in Washington I think you’d find those types of compliances rolled back rather then enforced.

          I know I often sound like a bleeding heart liberal but I get tired as hell watching our tax dollars spent on failed time after time ‘band aid” fixes rather then on what is proven to work, and work for the long term.

          On top of all the taxes we have paid into this failed “war” I hope you also realize that all the cash money and property seized in this “war” goes into the coffers of the LEA’s that “fight” it, in 2014 alone it was almost $4 billion dollars worth, so how much have we actually spent on this failure? It’s estimated we’ve spent about $500 PER SECOND since Nixon called out for this “war”, and that’s not including the seizures of assets.

          The type of profits involved in the drug trade from foreign manufacturers and suppliers makes it easier for corporations, like Rabobank, to shirk regulations as what they stand to profit is far greater than what they stand to lose, and what they do lose is usually paid from the pockets of their share holders and customers. Win-win…

          (-5) 19 Total Votes - 7 up - 12 down
      • SLOBIRD says:

        SLOBorn… Obviously with your statement, you are not aware of the War on Drugs that this Country has under taken, especially in our schools, and spends millions every year. How sad!

        (3) 7 Total Votes - 5 up - 2 down
        • SLOBorn says:

          No, obviously you didn’t read my post either correctly or in its entirety. I stated, very clearly, the following… “It’s estimated we’ve spent about $500 PER SECOND since Nixon called out for this “war”…” I’m not only aware of its cost, I’m damn sure tired of paying for this failed attempt at a war that costs me money on all fronts of this losing”battle”.

          Let me give you something to really take exception to; I believe we should legalize all illicit drugs, all of them!

          (6) 14 Total Votes - 10 up - 4 down

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