Japan’s largest bank has already been penalized by the State of New York for letting countries on sanctions lists like Iran and Myanmar route payments through its systems, but a current inquiry is more serious: It’s a federal case involving North Korea.
The bank, Mitsubishi UFJ Financial Group, was subpoenaed by federal prosecutors in Manhattan late last year as it was locked in a court fight with the New York Department of Financial Services, according to two people who were briefed on the investigation but not permitted to speak publicly. That litigation involves the department’s attempts to punish the bank, known as MUFG, for breaking anti-money-laundering rules.
The subpoena was issued after the state said in a court filing that the bank had intentionally ignored an internal filter designed to keep it from doing business with companies and people on international sanctions lists. The Department of Financial Services said the bank had also failed to set up a system for checking the identities of some of its Chinese customers doing business along the North Korean border, a hot spot for money laundering.
It was not clear whether prosecutors had found any evidence that North Koreans laundered money through the bank, but the holes in the system meant to trace such transactions were a chief concern of the Department of Financial Services.
