There are rumors that ING is eager to do a new settlement agreement with the Dutch authorities for the Payvision money laundering case. ING is quite experienced in doing settlement agreements for money laundering cases letting the shareholders pay the fine. But considering ING´s checkered money laundering track record it is evident that for ING still doing business is more important than compliance and being a gatekeeper for financial crime. So a settlement agreement probably is not the right instrument to stop ING´s lax stance on money laundering.
Too big too fail!
ING Groep NV (hereinafter “ING”), Amsterdam, is a Dutch multinational financial services company headquartered in Amsterdam. The three letters (ING) stand for “Internationale Nederlanden Groep”.. With total assets of US$ 1.1 trillion, it is one of the largest banks in the world and regularly ranks among the 30 largest banks in the world. In the list of the largest European companies by turnover, ING Groep is among the top ten.
ING is a Dutch member of the Inter-Alpha Group of Banks, a cooperative consortium of 11 prominent European banks. Since its creation in 2012, ING Bank has been a member of the list of global systemically important banks.
In 2008, due to the late-2000s financial crisis, ING Group was bailed out with EUR 10 billion from the Dutch Government (citizens’ money).
ING`s empty phrases on money laundering and financial crime.
ING frequently outlines in its announcements that the group is very aware of financial crime risks:
ING’s security and compliance remain a top priority. It is part of who we are: Integrity is at the heart of our Orange Code – ING’s values and behaviors. As gatekeepers of the financial system, we protect the plan, our customers, and society from financial and economic crimes such as money laundering, tax evasion, and terrorist financing.
To “enforce the Group’s high values” across the Group, ING reports having established business principles that clearly express ING’s commitment to integrity. For example, ING has implemented a Corporate Financial Crime Policy (“FEC Policy”), which contains a clear statement on financial crime to protect against any involvement in criminal activities and to participate in international efforts to combat money laundering and the financing of terrorist and illegal activities. The FEC policy aims to ensure that the appropriate risk-based standards of due diligence apply to the “Know Your Customer” principle, so that ING consistently complies with the requirements of legislation and relevant guidelines in the countries in which it operates and that its brand and reputation are protected.
According to the ING FEC Policy, the management of all ING entities must implement appropriate local procedures that enable them to comply with local laws, regulations, and the ING FEC Policy. Where local laws are stricter, local laws should be applied. Similarly, if the standards contained in the FEC policy are more stringent than local legislation, the FEC policy takes precedence.
ING´s history proves that settlement agreements are no effective tools to stop money laundering.
So according to the announcements, ING knows about the immense importance of fighting financial crime and about its responsibilities as a gatekeeper. But considering ING´s checkered money laundering track record as follows, it is evident that for ING doing business is more important than compliance and being a gatekeeper for financial crime.
US DoJ asked ING for forfeiture of USD 619 million.
On 12 June 2012, the US Department of Justice issued a press release about a settlement agreement with the Dutch ING Bank N.V. ING Bank N.V. agreed to forfeit USD 619 million for illegal transactions with Cuban and Iranian companies.
ING Bank N.V. violated U.S. and New York State laws by illegally moving more than 20,000 transactions worth more than USD 2 billion through the U.S. financial system on behalf of Cuban and Iranian companies that were subject to U.S. economic sanctions from the early 1990s through 2007. In the settlement reached in the criminal case, ING Bank admitted that it knowingly and willfully engaged in this criminal conduct, which resulted in unaffiliated U.S. financial institutions processing transactions that otherwise should have been rejected, blocked, or halted for investigation under OFAC regulations governing transactions with sanctioned countries and parties.
U.S. Department of Justice Deputy Attorney General Monaco summarised the settlement reached as follows: “The fine announced today is the largest ever imposed on a bank in connection with an investigation of violations of U.S. sanctions and related offences, and underscores the national security implications of ING Bank’s criminal conduct. For more than a decade, ING Bank helped provide state sponsors of terror and other sanctioned entities with access to the US financial system so they could transfer billions of dollars for illicit purchases and other activities through US banks,” US Attorney Machen said. “When banks put their loyalty to sanctioned customers ahead of their commitment to comply with the law, we will hold them accountable. In more than 20,000 cases, ING intentionally manipulated financial and commercial transactions to remove references to Iran, Cuba and other sanctioned countries and entities. Today’s recovery of $619 million – the largest amount to date – will hold ING accountable for their misconduct.”
According to the court documents, ING Bank committed its criminal conduct by, among other things, processing payments for ING Bank’s Cuban banking business through its branch in Curaçao on behalf of Cuban customers without indicating the origin of the payments and by providing US dollar trade finance services to sanctioned entities through misleading payment messages, shell companies and the misuse of ING Bank’s internal suspense account.
In addition, ING Bank eliminated payment data that would have revealed the involvement of sanctioned countries and entities, including Cuba and Iran; advised sanctioned customers how to conceal their involvement in US dollar transactions; forged ING Bank endorsements for two Cuban banks to fraudulently process US dollar travellers’ cheques; and threatened certain employees with penalties if they did not take certain steps to remove references to sanctioned entities in payment messages.
According to court documents, this occurred in various business units of ING Bank’s wholesale division and in locations worldwide with the knowledge, approval and encouragement of senior corporate managers and legal and compliance departments. Over the years, several ING Bank employees raised concerns with senior management about the bank’s sanctions violations. However, no action was taken.
ING Netherlands did a EUR 775 million settlement deal.
In September 2018, ING BANK N.V. agreed to a settlement payment of EUR 775 million (USD 900 million) to end criminal proceedings initiated in Amsterdam in spring of 2017.
Dutch financial crime prosecutors found that ING had “structurally and over the years” violated laws on the prevention of money laundering and terrorist financing (specifically investigating the years 2011 to 2016) by failing to verify the beneficial owners of customer accounts and failing to notice unusual transactions through those accounts – especially in the years under investigation.
Prosecutors said the Dutch central bank (DNB) warned ING BANK N.V. as early as 2008 that its procedures were inadequate and only acted in 2016. Dutch prosecutors said they began investigating in 2016 after recognizing that a pattern of violations – such as occurred at ING BANK N.V. in several criminal investigations – was a sign of deeper problems at ING.
Prosecutors cited four examples where ING accounts were used to commit crimes, most notably bribes paid by telecommunications company VEON, formerly VimpelCom, in Uzbekistan. VEON settled the charges from the US and the Netherlands in 2016 for a payment of USD 835 million.
The senior prosecutor Margreet Frohberg on the case told the press that “hundreds of millions of euros” were involved.
The Statement of Findings published together with the settlement agreement revealed that ING’s transaction monitoring system was programmed to trigger a maximum of three money laundering alerts per day in specific categories, as the bank did not have sufficient capacity to investigate more.
Another essential survey finding was that at ING, doing business is more important than compliance.
Poland: (ING Bank Śląski) as revealed in the #FinCen files
On 20 September 2020, leaked documents – also called #FinCen files – from the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) revealed that accounts of suspicious companies such as Schildershoven Finance B.V., Amsterdam, as well as Tristane Capital B.V., Amsterdam at the Polish bank ING Slaski have been used for years to launder stolen money from Russia and Ukrainian oligarchs.
According to the #FinCen files, Schildershoven Finance B.V. and Tristane Capital B.V.. sent and received wire transfers with several high-risk transaction patterns, including sending/receiving high-value wire transfers (large, round dollar amounts) in groups on the same day or consecutive days with unclear and generic payment details (sale of securities, interest receivable and payments under agreements), the use of accommodation addresses (United Kingdom, Cyprus), transactions with high-risk, low-transparency entities and the lack of a clear business rationale.
Schildershoven Finance B.V. is a financial brokerage service through which hundreds of millions of dollars were channeled to companies in Cyprus and tax havens until the tax authorities lost track of them. Russian and Ukrainian oligarchs funneled vast sums of money out of their countries through this system- also called the Moscow Mirror Network scandal.
The Moscow mirror network scandal involved about $10 billion. Igor Putin, a cousin of Russian President Vladimir Putin who is a member of the management of several Russian banks, and Arkady and Boris Rotenberg, oligarchs who are friends of the Russian President and against whom the USA has imposed sanctions, are also alleged to have been involved.
According to reports from the #FinCENfiles, Ergoinvest LLP (a shell company registered in Potters Bar in Hertfordshire, United Kingdom) was one of Schildershoven’s most important clients. In 2014, nearly $307 million was transferred from Schildershoven’s account at ING Bank Śląski to Ergoinvest’s account. All 76 transactions bore the enigmatic title “payment by agreement.”
According to an internal ING document, Schildershoven’s dealings at ING Bank Slaski amounted to $1.2 billion in 2014 alone.
According to this, ING Bank Śląski may have been used to launder several hundred million dollars from Russia and Ukraine at least in 2013-2014. The current director of the Dutch company (Schildershoven Finance B.V. KVK: 33287037s), Vladislav Zaharovs, claims that it had business relations with ING until 2018.
MoneyNetInt Ltd, London – an e-money and payment institution licensed by the Financial Conduct Authority (FCA) (reference No. 900190)) – had an account with ING Bank “L’ski Spéka Akcyjna” (PL73105000861000009030701412). The account was used for deposits of the victims of the fraud website www.optionstarsglobal.com (the Wolf of Sofia) up to 2019.
As early as July 2016, the Times of Israel reported MoneyNetInt Ltd’s involvement in binary options fraud. In spring 2017, the Polish Financial Supervisory Authority (“KNF”) warned about the activities of MoneyNetInLtd.
ING Italy: no new clients for more than one year
In March 2019, the Bank of Italy ordered ING to pay EUR 30 million to settle a money laundering case in Italy, according to public media. The court fined ING EUR 1 million and deducted EUR 29 million from the bank’s profits.
The Bank of Italy’s action, taken in March 2019, followed several inspections that showed ING Italy had not done enough to prevent money laundering transactions through its accounts.
In addition, the investigation led to Dutch lender ING being banned from taking on new clients in Italy, and the central bank ordered the lender to fire its Italian CEO.
On 16 January 2020, an Italian court upheld last year’s decision by the Italian banking regulator prohibiting the Bank of Italy from taking on new clients.
The Banca d’Italia announced on 20 September 2020 that the ban on onboarding new customers at ING Italy, imposed in March 2019 has been removed. The decision follows the comprehensive steps undertaken by ING Italy to strengthen its processes and management of KYC compliance risks.
Spain: running Omnibus accounts for Bandenia
In early April 2023, it got publicly known that the Bandenia money laundering network used the Spanish branch of ING to launder stolen money for transnational criminal organizations.
According to Spanish investigators, the key was the so-called ‘omnibus accounts,’ i.e., cumulative accounts with funds from several parties. In fact, according to the prosecution, Bandenia opened current accounts in its name at renowned banking institutions, such as the Spanish CaixaBank and Ibercaja and the branch of the Dutch bank ING in Spain.
The structure of Bandenia analysed by the Spanish investigators resembles that of a ‘washing machine’: black funds enter Bandenia, move around, and take the path of legitimate investments. The magistrates identified 352 ‘criminal’ clients: drug traffickers, swindlers, and financial criminals.
Leonsky Ltd in Madrid, Spain, a money mule held an account with ING BANK N.V. SUCURSAL EN ESPAA (ES17 1465 0100 9519 0060 4045). This account has been used for several online fraud schemes (including the scams of GAL BARAK).
Australia:
On 24 November 2022, ING announced that ING Australia has entered into an Enforceable Undertaking (EU) with AUSTRAC (Australian Transaction Reports and Analysis Centre).
The EU follows an investigation by AUSTRAC which commenced in July 2021.
it got public that Dutch bank ING has vowed to fix its anti-money laundering and counterterrorism financing systems after an investigation by the Australian financial crimes regulator AUSTRAC found flaws in the lender’s compliance.
AUSTRAC said it accepted a court-enforceable undertaking from ING’s Australian business, with ING promising to beef up its reporting of suspicious transactions, its risk assessments, and its program for complying with anti-money laundering and counterterrorism financing (AML/CTF) laws.
Online broker ING Germany lax regarding significant cases
As of September 21, 2021, FT reported about a Bafin´s employee rebuking Germany’s most significant online bank ING Germany in court for being too late in flagging suspicious trading activities of a potentially criminal client.
The rare public criticism of an individual bank by Germany’s financial regulator was made at a district court hearing in Frankfurt on Tuesday, where a 45-year-old former senior funds manager of Union Investment is charged with large-scale insider trading.
The defendant admitted to “front-running” investment decisions he made on behalf of his employer on 55 occasions between April and September 2020, making €8.1m in net profit. According to the public prosecutor, he used a private brokerage account at ING Germany to buy and sell derivatives aimed at retail investors on blue chips that he traded for Union, including Infineon, Deutsche Post, and MTU, sometimes spending EUR 1 million per transaction. The total trading volume over the six months until his arrest added up to EUR 45 million, generating significant fees for the online broker. Frank Mühlhans, a BaFin expert on insider trading, told judges on Tuesday that the defendant’s broker flagged the highly suspicious trades relatively late and only after several issuers had warned the regulator about the dubious activity. “About this broker, I am not surprised about this,” Mühlhans said. He pointed to his past experiences with suspicious activity reports from the bank. “They are filing a lot [of suspicious activity reports] but are surprisingly lax regarding the significant cases.”
France:
The French Prudential Control and Supervision Authority (‘ACPR’) announced, on 2 March 2021, that it had issued a decision fining ING Bank NV EUR 3 million for anti-money laundering and combatting terrorist financing (‘AML/CFT’) failures. In particular, the ACPR noted, among other things, that ING France had failed to implement an adequate risk classification system accounting for the origin of assets, sector of activity, and risks related to its retail banking customers, as well as that they had not exercised adequate due diligence in its business relationships with respect to risk factors such as Politically Exposed Persons. In addition, the ACPR noted that in respect to the transfer of funds, payment service providers must have in place internal management procedures for detecting a possible absence of information on the principal and beneficiary, as well as to monitor compliance with AML/CFT requirements.
Further to this, the ACPR found that there were no adequate internal management procedures to detect information missing with respect to fund transfers and payment service providers of intermediaries. Moreover, the ACPR found that there were inadequate procedures for implementing on the spot checks and for reporting suspicions of AML/CFT breaches, as well as for imposing asset-freezing measures.
Luxembourg: ongoing criminal investigation!
According to the ING annual report 2021, in January 2022, a Luxembourg investigating judge informed ING Luxembourg that he intends to instruct the relevant prosecutor to prepare a criminal indictment regarding alleged shortcomings in AML process at ING Luxembourg, “I can only confirm that an investigation was opened in March 2018 and that at this stage the procedure is covered by the secrecy of the investigation,” a spokeswoman for the Luxembourg prosecution said.
ING Belgium appears 965 times in Panama Papers
In 2018, in new documents obtained in the “Panama Papers,” the name of ING Belgium appears 965 times, more precisely, that of “ING Belgium, Brussels, Geneva branch.”According to Le Soir, the Panama Papers make it possible to establish a direct link between the ING branch in Geneva and tax havens. At least 25 offshore companies (in Panama and the British Virgin Islands) are connected with ING Belgium, Geneva branch, primarily by opening a bank account.
The opening of these accounts hosted under an offshore structure sometimes dates back more than ten years. The most beneficial owners of these accounts are wealthy Russians active in the oil and gas sector.
Ralph Hamers: ING´s CEO from 2013 up to 2020!
The settlement reached with ING in the autumn of 2018 also ended the criminal proceedings against ING’s Executive Board. No criminal action was taken even though compliance deficiencies had been described for years in reports from Internal Audit, Legal/Compliance, and external supervisors, as both the Management Board and the Supervisory Board had received information from Internal Audit, the Dutch regulator DNB and the European Central Bank that AML controls were inadequate. However, neither the ING Executive nor Supervisory Board took appropriate action.
Pieter Lakeman, chairman of Stichting Onderzoek Bedrijfs Informatie (SOBI), filed an appeal and was proven right by a court. The Hague Court of Appeal said it thought that there were promising leads for the successful prosecution of this former director as the de facto supervisor of the criminal offenses committed by ING”. It added: “The facts are serious; no settlement has been reached with the director himself, nor has he taken public responsibility for his actions.” New criminal investigations for Ralph Hamers were started, but up to now, no results.
PAYVISION´s criminal proceedings!
Ralph Hamers was praised for ING´s digital evolvement during the past years. One of his digital initiatives for ING was acquiring the Payment Institution Payvision in January 2018. In November 2023, it got public knowledge that criminal proceedings against Payvision and its former management Rudolf BOOKER were initiated by the Dutch supervisory authority DNB due to its massive involvement in investment scams in the years 2015 up to 2020. For more info please, refer here.
The criminal proceedings are still pending. As mentioned, there are rumors that ING is eager to achieve another settlement agreement for the pending Payvision case, enabling Rudolf BOOKER to continue his more than questionable stance on money laundering.
