Bank executives rarely face money laundering charges because investigators don't usually uncover the kind of decisive evidence needed to convict them, prosecutors said Monday at an international conference in Florida.
"You don't find the smoking gun email where an executive says, 'I know it's drug money, but go do it anyway,'" said Evan Weitz, a New York federal prosecutor, during a panel discussion at the annual anti-money laundering conference.
Instead, prosecutors usually target the bank or financial institution itself. Adam Kaufmann, chief of the investigative division of the Manhattan district attorney's office, said even then the preferred practice is to work out a settlement - known as a deferred prosecution agreement - rather than indicting the institution.
"An indictment can be a death sentence for a financial institution," said Kaufmann, adding that ruining large banks or other institutions can trigger unforeseen economic ripple effects.
Major banks investigated for doing business with countries facing U.S. economic sanctions have reached agreements four times since January 2009. In those settlements, the institutions pay large fines and agree to meet certain requirements, but no executives face jail time. Last year, U.S. District Judge Emmett Sullivan of Washington labeled one such settlement a "sweetheart deal." In that settlement, Barclays Bank paid $298 million in penalties but faced no charges.
Fannie Mae (FNMA), the mortgage-financier seized by U.S. regulators in 2008, will pay the Treasury Department...
