Illegal loans to Iran shipping line

The U.S. Government still has restrictions on doing business with certain countries.
Cuba, Iran, and Sudan are some of them.

Somehow the folks at JP Morgan Chase didn't know this, but probably more
likely, just didn't care.

It's costing them $88.3 million, but I guess that's just pennies to them.

From the NY Times Dealbook

JPMorgan Chase has agreed to pay $88.3 million as part of a settlement with the Treasury Department over a series of transactions involving Cuba, Iran and Sudan, the agency said on Thursday.

The Treasury Department’s Office of Foreign Assets Control said in a news release that JPMorgan processed wire transfers totaling around $178.5 million for Cuban nationals in late 2005 and early 2006, violating United States embargo laws. The bank’s officers discovered the transfers in 2005, after they were tipped off by another financial institution, but failed to report them and did not take adequate steps to prevent more transfers, according to the statement. The release did not say which institution made the initial discovery.

The bank was also fined for a 2009 incident in which it made a $2.9 million loan to a bank that had ties to Iran’s government-owned shipping line, a violation of United States sanctions against the Middle Eastern nation. Again, JPMorgan Chase learned of the apparent violation early on but did not disclose it to regulators until March 2010, three days before it was repaid for the loan.

A third violation occurred in 2010 and 2011, when the bank failed to give up documents about a wire transfer that referred to Khartoum, the capital of Sudan. According to the release, the agency gave JPMorgan a list of documents believed to be possessed by JPMorgan. In response, JPMorgan, which previously said it had no such documents, produced more than 20 of the items in question.

Treasury officials called the bank’s actions “egregious” and said that JPMorgan’s “managers and supervisors acted with knowledge of the conduct constituting the apparent violations and recklessly failed to exercise a minimal degree of caution or care.”

JPMorgan said that it never dealt directly with institutions in the embargoed countries and that it had merely acted as a middleman.

The penalty, the government said, had been reduced because JPMorgan cooperated substantially with the investigation.

“The civil settlement resolves a number of OFAC allegations dating back to 2005, none of which involved any intent to violate OFAC regulations. These rare incidents were unrelated and isolated from each other,” said Jennifer Zuccarelli, a spokeswoman for JPMorgan. “We are pleased to have resolved these matters and to move forward with enhancements to our global OFAC compliance program.”