Puerto Rico Bank to Pay $1 Million to Resolve Investigation Related to PdVSA Transactions
12 Feb 2020

Bank of San Juan Internacional Inc. agreed to pay $1 million to resolve a federal investigation into alleged money laundering, the U.S. Department of Justice said.

Prosecutors alleged that the San Juan, Puerto Rico-based bank laundered millions of dollars related to transactions and loan agreements with Venezuela’s state-owned oil giant, Petróleos de Venezuela SA. The U.S. imposed sanctions on PdVSA in January 2019 in an attempt to cut off an important revenue stream and cripple the government of President Nicolás Maduro.

The resolution, announced Tuesday, followed a civil forfeiture of tens of millions of dollars and close to five months of civil litigation between the bank and federal prosecutors.

As part of the resolution, the Justice Department agreed to return $53 million in seized funds to the bank and end its investigation into the bank and its officials.

“From the beginning, the bank and its officials maintained that they always acted in good faith and in accordance with the law,” Bank of San Juan said in a statement. “The bank looks forward to restoring confidence and continuing to be a model for other international banking entities in Puerto Rico.”

Efforts to reach PdVSA for comment weren’t successful Tuesday.

Bank of San Juan agreed to lend PdVSA $519 million in April 2017, according to a complaint filed in September. Prosecutors alleged that the bank misrepresented to regulators which accounts the repayment from PdVSA was deposited into. Prosecutors said the bank laundered more than $73.8 million in international wire transfers from PdVSA, according to the complaint.

By Mengqi Sun, The Wall Street Journal, 11 February 2020

Read more at The Wall Street Journal

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet