Riggs Bank Guilty Of Failing To Report Suspicious Transactions

by Glen Shapiro, LawAndTax-News.com, New York

31 January 2005

Washington-based Riggs Bank on Thursday pleaded guilty to a criminal charge of failing to report suspicious transactions undertaken by several of its high profile foreign customers, including former Chilean dictator Augusto Pinochet.

The bank's guilty plea and agreement to pay a $16 million fine follow the conclusion of a Justice Department investigation into the bank's handling of the suspect transactions.

In an earlier civil case on the matter, heard last May, the bank agreed to pay a $25 million fine, but did not admit or deny wrongoing.

In a statement released on Thursday the bank announced that:

"Under the agreement, Riggs Bank N.A. will plead guilty to a single count of failing to file timely and/or accurate Suspicious Activity Reports as required by the Bank Secrecy Act and its implementing regulations. Riggs Bank N.A. will pay a $16 million fine to federal authorities, and has agreed to a five-year period of corporate probation, which will terminate immediately upon the closing of a sale of Riggs National Corporation or Riggs Bank N.A. or any other change of control transaction."

"The agreement confirms that the United States will not bring any additional criminal charges against Riggs Bank N.A., Riggs National Corporation, or any related entity in connection with any matters arising from the conduct related to the embassy banking and/or international private banking businesses of Riggs, which Riggs voluntarily discontinued last year."

The statement concluded by announcing that:

"The agreement reflects that Riggs fully cooperated with the investigation that was conducted by the DOJ and that Riggs' own internal investigation uncovered wrongdoing that is the subject of today's proceedings. In addition, Riggs has accepted responsibility for its conduct and has voluntarily discontinued operations in the business areas where the conduct at issue occurred. Since the beginning of 2003, Riggs Bank N.A. has invested more than $50 million to develop and implement a new bank-wide information system solution, hired additional compliance staff, and established new compliance procedures and policies."

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