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BNP to pay $80 million for defrauding Dept of Agriculture


A US court entered an $80 million judgment against French bank BNP Paribas for defrauding a programme designed to protect US exporters, the Justice Department said Thursday. BNP agreed in June to pay $8.9 billion for violating US sanctions.


The Agriculture Department’s Supplier Credit Guarantee Program (SCGP) was designed to help cover losses for American commodities exporters in cases where their import partners failed to make a payment.

A statement from the Justice Department said that from 1998 to 2005, BNP Paribas guaranteed this type of credit for companies known to be operating on both the export and import side of a trade but which, in some cases, never made a payment or a shipment.

Beginning in April 2005, BNP Paribas submitted claims to the Department of Agriculture (USDA) for losses resulting from a Mexican importer that was owned by the same company as the American exporter.

“Because the US exporters and Mexican importers were under common ownership and/or control, which fact [the] defendants knew, none of the commodity sales between these entities were eligible for SCGP payment guarantees,” Assistant US Attorney Michelle Zingaro said in a 2011 complaint in the case.

The SCGP does not guarantee payments on sales between a US-based exporter and a foreign importer if both are controlled by the same entity.

When the Mexico-based importers defaulted on dozens of payments for grain shipments between 1998 to 2006, BNP and BNP vice president Jovenal “Jerry” Cruz, a former trade finance manager, “presented or caused to be presented false or fraudulent claims to the USDA”, Zingaro said in the complaint.

Cruz, BNP Paribas North America and BNP Paribas Houston Agency were also named as defendants in the complaint.

Cruz pleaded guilty in 2012 to receiving bribes from the exporters.

In an unrelated case, BNP Paribas pleaded guilty in June and agreed to pay $8.9 billion in a settlement for violating US economic sanctions.

Prosecutors said the bank engaged in a “long-term, multi-jurisdictional conspiracy” to violate sanctions by facilitating transactions involving Sudan, Cuba and Iran, all nations targeted by US economic sanctions.

US authorities found that BNP Paribas had evaded sanctions against entities in Iran and Cuba in part by stripping information from wire transfers so they could pass through the US system without raising red flags.


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